Jodi D. Tousignant, president of Beforeclosures, Inc., has always "loved real estate" so it was natural that she saw an investment opportunity in her first home purchase. After a cosmetic lift that she says included painting, refinishing hardwood floors, and adding a slider to a new deck and Jacuzzi, the twenty-five year old made a fifty thousand dollar profit on her home in less than two years. The profit reinforced her interest in real estate and inspired her to do some more investing.
Since real estate investing starts with finding suitable properties to consider for renovation and resale, that pursuit then lead her to the next step -- creating a business to match people who were at risk of losing their homes to foreclosure to a pool of investors (who typically go to auctions) -- just three years after she bought her first property.
Beforeclosures, Inc. has a mission to empower individuals to gain control over their financial situation by providing risk-free options -- fast, solid options prior to foreclosure of auction. The former Professional Services Director for a software company says that her new Massachusetts-based company gives homeowners the possibility to walk away with cash and protect their credit history or decrease the amount of their loss. She plans to start a distributorship in the near future and hopes to expand her offerings nation wide.
The reality of an impending foreclosure is that it is not going to go away on its own. Any equity the homeowner has built up could be lost so homeowners should take advantage of the strategic alliances she has with investors, some of whom are willing to let them rent while they make the transition to new housing in return for the opportunity to purchase the property at a discounted price. The ultimate goal of the company is to work with the homeowner upfront rather than buy the home at an auction.
Jodi finds that as she talks with people at risk of foreclosure, 8 out of 10 of them want to learn more about her program and their options of working something out. She knows that layoffs, divorce, credit card debt, and medical expenses can create desperate situations for people and she believes that "your house should never be more important than your self-worth." She tries to talk people out of Chapter 13 bankruptcy and urges them to save their credit.
Listing their homes with Realtors is a viable option for them and Jodi does refer them when time permits but a typical scenario is that they need close in less than twenty days so cash buyers and quicker closing times are necessary. Investors who may have not had luck going directly to homeowners or dealing with multiple bidders at auctions may find the Beforeclosures, Inc. approach preferable.
Beforeclosures, Inc. gets paid a consulting fee for their research and delivers to investors the pertinent data on the property and financial status prior to public auction decreasing their effort and cost and increasing profit and exposure. Although the business model is based on billing investors for the work, the home sellers frequently end up as benefactors.
Take, for example, a recent voice mail message that Jodi received. The seller was calling to thank her for alerting him of the pending auction. Jodi had talked to him a few weeks earlier and he assured her the problems were due to a bank error and that his house wouldn't go to auction. But on the day of the scheduled auction, Jodi was told differently by the law firm. By the time he returned her call, twenty people had gathered on his lawn for the auction. His attorney got the auction called off but it was a close call for a seller grateful for her attention and interest in his situation.
Another home seller in financial trouble that she recently assisted sent a letter to thank her for a "chance at a new start" and expressed that it was "good to let go of a lot of the bad past at that house.... our new home is good for us." Jodi says it is that kind of correspondence that makes her work enjoyable and helping people during a bad situation makes her new business have relevance while she works in real estate, something she loves.
Pat Rioux
