Mastering Pre-Foreclosures with 'The Short Sale Queen' | Nicole Espinosa

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As always, I have an incredible, incredible guest, a professional real estate investor, but specifically, this is the short sale queen y'all. We got Nicole Espinoza in the house.
How are you, girl? I'm good. I'm excited to be here in your studio.
Yeah, this is fun. So we need to hit this hard because I think in the real estate space, there is a niche, the short sale, the pre-foreclosure.
It is where I cut my teeth, frankly, back in 2007, 2008, when the world was coming to the financial end. But I think a lot of people don't talk enough about this because there's still a very, very lucrative niche.
There are still plenty of people that have a lot of financial pain that are dealing with this in their own personal lives. And you are the go-to girl that I would tell everyone needs to be following you, needs to go to your YouTube.
Short Sale Queen for all you watchers and listeners, go follow the Short Sale Queen on YouTube. But let's talk about it.
Let's talk about the state of the real estate economy right now, what you're seeing as an active investor in the short sale space and pre foreclosure space. Why don't we just dive into that? Yeah, absolutely.
So thanks for having me. Of course.
Yeah, so really seeing right now is, so when you got in 2007, 2008, I actually got in 2009. So we got in the worst time ever.
So while everyone was leaving, we're getting in, right? Which I think speaks to like our personalities and what we're doing. Right, right.
A little bullish on it. Yeah.
We're like, okay, you go that way. I'll go this way.
Totally. But unlike 2008 and 2007, we're in a different kind.
We have a different kind of borrower, a different kind of seller that's distressed. So we have now with the pandemic, with everything that had happened, anybody from 2020, there's two types of people in foreclosure right now, 2020 to 2022, or now 2023, those borrowers that purchased are now upside down.
And they over leveraged because if you remember, a couple years ago, it was, you know, everybody's overpaying. And it was almost like a flex, like, Oh, I got the deal 100,000 over asking like, okay, sweet, sweet.
It's like the opposite of investing, right? So you had a bunch of homeowners that made these emotional decisions because of what was going on. Right.
And now they're coming to us and saying, hey, I need to sell because I have a financial hardship and they owe more than the house is worth. And so because right now with the interest rates that increased, we have buyers that have less purchasing power.
Yeah. So if it's already hard enough for investors, for regular traditional sellers, imagine people that have to sell, that don't have that flexibility.
Yeah. Well, so you're talking specifically the vast majority of people that you're seeing in your business and your students in your community are homeowners that bought in 2020 to 2023 or in trouble? Yeah.
So we see two types, that and people that are, there's like no middle ground. It's you've either just bought or you're like 15 years behind.
Yeah. Yeah.
There's no like middle ground here. Okay.
So those are the type of sellers that we're seeing right now. They're distressed.
And so, but what would you say to the people who are thinking, yeah, but didn't they get a 2.8% interest rate? What's your point on that? Well, it's irrelevant, right? So the terms are irrelevant. Their situation is now, of course, this has opened the door for so much creative finance subject to, but what's happening and what people need to understand, because most people approach pre-foreclosure with logic.
There's nothing logical about a seller and foreclosure. No, it's all emotional.
Right. And so someone that is emotional intelligence, when someone has no logic, their emotions are high.
You have people in this situation that are not thinking about equity. They're not thinking about, oh, I need to do something.
They're thinking, I need to save my home. So if anyone doubts or is like, hey, there's no foreclosures or is there opportunity in my market, just go look at the amount of people that got foreclosed on the month before.
Where would someone go find that data? So you can look in the county records to see the active foreclosures. Now you can purchase, you know, pre-foreclosure lists, auction lists and all that.
But you can go for free on that. You just have to do the research yourself.
Um, which no one wants to do. No, it's not sustainable, but if you just want an idea, right? Like just see how many are active and these are all people that need help.
Right. And so logically you're like, okay.
And even I know a couple of people have said this years ago of like, Oh, there's so much, uh, people have so much equity. They'll just sell if they're in foreclosure.
And I was like, wow, you have never worked with someone in foreclosure before to say a comment like that. Because I work with people days before a sale date that have hundreds of thousands of dollars of equity.
And we're sitting here. What are they doing? They're trying to figure it out all the way to the day before they're trying to figure it out.
Is that what's happening with them? Oh, they put their head in their sand. And so anyone that's listening to this that's ever talked to someone in foreclosure is going to resonate with what I'm about to say.
You talk to someone in foreclosure, you see the paperwork, you're like, okay, or the numbers. And you're like, you have $250,000 of equity.
And the first thing they tell you is I've gotten this taken care of. That's the number one objection.
And they literally think I had a conversation with the bank. I talked to somebody, it's going to be fine.
The foreclosure gets in three weeks, it's going to be fine. And then all of a sudden, four days, three days before, they're still in that situation and nothing panned out and the bank is not calling them back or never postponed it or they got denied for the loan mod they were waiting on.
And now it doesn't really matter about the equity because if they can't stop can't stop the foreclosure, they lose everything. And so what, where people go wrong is that they approach these sellers with logic and saying, Hey, no, you need to sell.
What's wrong with you? Like, and they're arguing. And when you argue with someone that's delusional, you're never going to win period.
And you've automatically put yourself in a you versus me instead of meeting that homeowner where they're at so that you can help them come to terms with what's going on. You should just be a sales coach.
Yeah. I mean, because the reality is this, what you are talking about is salesmanship is the reality.
You're not really talking about numbers and math. You're saying you need to connect with your potential client, with your prospect, right? And I think your point is too often people worry about the Mayo formula.
What's my cash offer going to be? But they're not actually saying, what is the problem that I'm trying to solve? And let me listen to that. And they think like, they say, oh, they're delusional.
I'm like, yes, they are. And that means if you

know that, then how do you connect with them? So a hundred percent it's sales. And it's crazy because when I started my education in the beginning, it was like, I want to give you all the tactical things.
And I realized none of that really mattered because the huge missing piece of what's not taught is how to connect with these people is how to meet that that person where they're at, is how to get them to arrive to the reality. Instead of trying to sell them, you're educating them.
And then your confidence is, I teach this to my students that the mindset should be when you're talking to the sellers, I'm the best thing that's ever going to happen to them. And they, they just don't know yet.
And if I'm not, if they don't know that, if they don't know, like their house is on fire and I'm the only one with the water to put it out, like I'm going to approach a completely different than, than, Oh, well, you know, I'd love to help like, and not confident. But if that's my mindset going into it, then I'm going to have a sense of urgency.
I'm going to have a sense of urgency because I know their house is on fire and I know that they just can't see that. And I know I can help.
And so it's just a completely different mindset than, hey, this is Nicole. I'm wanting to buy her house.
I see it's an auction. And they're like, click.
Right. So let's even talk not going through the whole script and you have an incredible community teaching people how to handle all this and go through all that again.
Make sure you check her out on YouTube, Short Sale Queen on youtube and follow her all over social medias nicole espineza short sale queen so what is the beginning part of that script if i'm the homeowner and you do reach out to me or whatever however i get into your world yeah are you coming in with the confidence to say hey i know you're in some trouble here i know i can help you we just be patient together. I've done this a long time.
There are solutions to your pain. I'm happy to provide them to you if you're okay with me.
How does that go? What is the talk track of that? Yeah. So most people get stuck and there's like three different phases of cold calling, which everyone tries to avoid, right? They all try to avoid cold calling.
And I'm like, you have to. You cold call in the beginning, because why would you spend so much money on direct mail and then practice on these paid leads? Right? No, get your reps in.
Know how to talk to them. You can't market to someone you don't understand.
Right? And then if you for some reason, if someone does call you back, they hang up and your cost per lead just went up tremendously because you're practicing on these leads, right? So when you're approaching these sellers, you know, the biggest struggle for most people is getting past those first 10 seconds. I can't even say 30 seconds, the first 10 seconds, right? Because of the way that they introduce themselves.
So as an investor, when you're approaching it and you're saying, Hey, Justin, so, Hey, listen, one, two, three main, you know, I wanted to write a cash offer. I wanted to see, you know, I see you're in foreclosure.
And immediately when people think about real estate investors, what do they think? They think I don't want to sell, first of all. And second of all, you're trying to screw me over and you're trying to low bomb me.
And that's not what I want. Right.
But it definitely doesn't say you're on my team. It doesn't definitely doesn't say you want to help.
It just says. And that's just the intro.
Yeah. Right.
So in the beginning, what we know, what I teach is, first of all, remember, this is just a conversation. Yep.
Human being to human being. So how would you call your family member? How would you call your friend? You'd say, hey, Justin, it's a poll.
Or Justin. Right.
Right. Super casual.
Yeah. And I'm not saying that you're not going to tell someone you're an investor or a realtor or whatever.
I'm saying don't lead with that because you automatically are having this person write you off. Right.
Instead of giving you the opportunity to tell them about the solutions and get past those barriers. And so I always tell people, I'm like, okay, first of all, keep it casual.
Okay. Once you get past that and they're like, okay, you know, that's where a lot of people struggle.
Okay, great. So now you're in the middle and you're like, okay, you're trying to build rapport or keep them on the phone long enough.
Like why should they care? Right. The longer you can keep the person on the phone, the more their walls are going to come down and the more they're going to tell you.
And the more they talk, the more you're going to hear what the truth is. What is their pain points? Why are they in this situation? And so, you know, once you go past, you know, Justin, like, okay, who are you? I keep going.
They could literally tell me to go to hell. And I'm like, I know it's just frustrating.
You know, like it doesn't matter. No, I get it.
I agree with everything they're saying. They could tell me the sky is black and I'm like, you know what? I see that, but I also see some blue.
So yeah, I can kind of see where you're coming from because I'm not arguing with them. Right.
I know they're delusional. I know that they're in denial, but now if I can start poking holes in that certainty, that denial, that delusion, then I get them to come back into reality because they'll tell me, Oh, the bank already got this taken care of.
And I use that example because that's like the number one objection. Like, I got to stay here.
I'm good. Leave me alone.
They don't really. So you almost, you beat the objection by saying, hey, I'm sure the banks have told you this is going to be easy.
There's an easy resolution. We hear that all the time.
So you basically overcome that immediately so that I can't even use it. Yeah.
I mean, and even they're going to tell you that regardless. So I'm just going to, I'm just going to agree with them.
And this is the key. I agree with everything that they say.
Okay. Right.
Always. I don't ever disagree because I want to be on your team.
Right. I want this conversation for you to feel, for you to go from random cold caller to I'm working with Nicole.
Nicole's got me.

That's what our clients say. Like,

Oh,

Nicole's got me.

She's,

I don't want to work.

No,

I'm good.

Yeah.

That,

that rapport,

that confidence.

So when they say that,

and I'm agreeing with them,

like say for this objection specifically,

I keep going because they're thinking,

okay,

great.

You're going to get off the phone.

And I'm like,

no,

I keep going.

Okay.

Awesome.

Justin.

So what did you end up doing?

And it always throws them off guard.

Cause they're like,

I thought you were to leave me alone now.

Thank you. So again, the more that they say, the more I get to say things.
So if you keep going with that, it's like, okay, well I talked to my, to my lender and I filled out an application so they're going to help me with the loan modification awesome but the only thing that i'm worried about justin is it still shows that it's up for auction so did you did you tell wells fargo or you know whatever that you know did you get a postpone did you request a postponement and they're like um well and then this is where i get to show my expertise. This is where I get to keep going and show value.
And then even I even teach like how to talk to the bank with them to really create that validity of like, okay, I'm not asking you for anything. I'm not selling you anything.
Let's figure out where you're at. And then I'm going to be the person that's going to help you with the best.
So you're definitely not trying to do a one call close. This is not that type of strategy.
Or are you? My goal is you can write it. You're good enough to you.
But is that your intention? Because as someone, so I've bought a lot of short sales, but I do it typically because either it's quite literally about to go to the auction. I actually have the cash.
So people come to me and they know I can close. I'm not targeting them.
So I'm actually asking questions because it's actually a niche I don't target for my own marketing. Yeah.
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That's propertyleads.com forward slash flip F-L-I-P. When I think about giving the value, I would think you're going to also say, hey, here's the thing that you'll probably want to ask the lender.
The next time you have a call, here's the three or four or five things that I think you should ask. Here's why, here's what you should be looking for.
What's going to happen is, and I'm guessing, I'm paraphrasing for you, but they're going to realize I haven't asked these questions. I got to call the bank back, but now you've offered them so much damn value because you're in support of them.
Just saying, these are the things you should be asking for. This is what you should be looking for.
That would essentially think that they're either going to call you right back when they realize the bank can't do what they need to get done. Yeah.
Or you just have an easy way to follow up. Is that kind of a hundred percent? And that's absolutely the mindset.
And so you said the one call close. I always I'm always driving the bus.
I am always in control. And if you say, if you lose control or if you say things like, let me know, you're sending them back out in the wild.
That's right. And these people, they want, they want someone to tell them what the next steps are.
And so everything you do, you make it easily digestible. Step one, this is what we're going to do.
Because right now, the reason why they haven't taken action, the reason why they haven't done anything is because they're so overwhelmed, they're shut down. Right.
Right. They cannot see out of their situation.
So if I, do you know how powerful clarity is? Like, you know that in your business, you know that in in your decision-making, well, if you can provide clarity for that person, they're like, okay, tell me what to do next. And I'm almost like talking to their subconscious because it's like, I'm giving them this level of comfort because I'm like, okay, we got this.
Let's go. Let's step one.
Oh, but what about this? No, don't worry about that. We're going to take this in steps.
So step one, let's talk to your bank together. Let's figure out if they did approve the loan modification, because if they did, fantastic.
Then let's look over the terms, make sure it makes sense. So you even offer that, right? Because again, back to, I'm just offering value.
Let me make sure I help you. I want everyone to kind of stop for a second because what she's really saying really truly boils down to just expert salesmanship, but also customer service.
And the Ritz is the Ritz. Because when you walk in the Ritz, you literally feel like anything is like they've got every little thing you possibly ever need.
I think everyone needs to realize what you're really saying. Right.
The second is it's not as much about the tactical. It's not as much about the numbers.
It's not what you're going to offer, what the rehab cost is. That's all irrelevant until you get the homeowner to get to a place of like, oh shit, I need to do something.
And Cole has been so great. I'm going to do something with Cole essentially is what you're saying.
A hundred percent. And then I'm also walking them through where they're not going to ghost me.
They're not going, they're going to have so much clarity that the next investor that's going to call them, that's going to pitch something. They're like, oh no, that's not going to work because of this.
Right. Because they're so educated of like, oh no, it doesn't work because of this.
So it removes doubt and that overwhelming of like all the decisions I need to make. No, no, no.
We've arrived to the same point together. I didn't convince you.
I gave you a safe place to say no. And then you walked through everything and realizing, okay, this is what my reality is.
Right? And I genuinely want to help. Yeah.
Right? I know the money is going to come. You can both help people and make really good money.
Yeah. My whole business is a testament to that.
The more you make more money by the more value you serve, right? 100%. So the intro to that, in our world of real estate investing, like the general script that we would try to teach is something like, hey, Nicole, you know, if you're outbound calling or a lead comes in, just want to introduce myself.
My name's Justin. I'm here at, you know, HGRI Holdings LLC.
We're a buyer across the nation for single family assets. We either fix and flip them or buy and hold them.
My job is to figure out, you know, where you stand in terms of selling. If we can be a right fit, great.
If we can't, that's also okay. I can point you in the right direction.
But right out of the gate, you know, we're looking to buy a home. Do you avoid that right out of the gate? What is that first quite literally like 10 seconds 15 seconds of intro yeah so that works really great when someone is not distressed but if you'd make that approach you're going to get like the five to ten percent i want to teach you how to get the 80 okay right what because the reality is the 80 percent do not want to sell yeah period so if you approach that and you use that script, they're going to say, thanks, Justin.
I appreciate it, but I'm good. Yeah.
I don't want to sell. I'm not selling my home.
Like, why are you, why do you think I'm selling? Right. And you're like, oh, well I see you're in foreclosure.
And now it's almost like they feel exposed. Of course.
Now you're like opening the wound. Like they don't want to be in foreclosure.
They don't want to lose their home.'re like oh i see you're about to lose your home so how can it help right they're like fuck you right and so this is why i say most people approach it with logic because even the people with the best intentions which i get it where they're like okay but i'm offering them a solution i'm not doing anything but that's not the way they see it right the way they see it is i fell behind on my mortgage because i had a financial hardship, divorce, you know, got sick, like whatever that is. And now you're coming to me because you see that I'm in distress and you're trying to take advantage.
And so as long as you are putting yourself in a position where it becomes a you versus me, it doesn't matter how great you are and what you have to do to offer, they're never going to hear it. Do you bring up the house at all in that first 10, 15 seconds? No, not at all.
I'm literally just making it about them. I will literally have a conversation for 30 minutes.
I have their social, their loan number, their property address, their life story, and they're ready to sign a contract. And they're like, Oh, by the way, what, who did you say you're with? Yeah.
And that's how, you know, it's a good conversation because the reality is they don't care about you. They don't.
We feel as human beings, like we have to qualify ourselves. We approach, and especially, I see this with realtors a lot, where they're like wanting to be super professional and they feel like I need to tell you or anybody that's been in the business for a while, but hasn't really done a lot.
And they love to start conversations off with, I've been doing this for 20 years and dah, dah, dah, dah. And it's like, cool.
Right. I don't care.
What does that have to do with me? Right. Because we feel almost like I have to, I have to show you my worth and my value.
And I'm telling you, look at it the opposite, show your value, show your worth through your knowledge and make it about the prospect. And the reality is you and I both know people love talking about themselves.
So if you give them a safe space to go on about their life story and all this stuff, you're going to get the information you need to be able to give them the solution. I would assume somewhere in your world, people can get a script from you.
Where would they go to do that? You can go, if you go to YouTube, I have all of the links. I have them on my website.
We give free scripts. I love it.
Make sure you go there. Because if you guys want to know exactly what to say and how to say it, she's giving away gold, cold calling and door knocking.
All of it. All of it free.
So do you say you're with a company looking in real estate at all? What is like literally the scripted 10 seconds? I mean, it's the first 10 seconds. Like how do you introduce yourself? Because for us, again, we're targeting the wide.
So short sales and pre-for-life niche. I go wide because I want all of the opportunity.
So I just go directly to say, we're looking to buy assets in the community. We love the market.
We want a bigger footprint. Not all properties work for us.
That's totally okay. We fix and flip or we buy and hold just depending upon the asset.
We'd love to have a conversation about your interest in selling interest in selling if you have any if not that's totally fine too right so we kind of give them the ways out I love that you just did the whole script that's how you know it's like in you oh you just do the whole thing yeah I do keep going but yeah and so do you do any of that like is any in that first 15 seconds nothing it's so simple. Now there's two different scripts.
Like, well, the script has a lot of different ways that you could do it. Right.
But it's all pretty much the same. And the reason why it's different is because I would approach someone that that's in pre foreclosure, which means that they could have months totally different than someone that has an auction date.
Yep. Because if someone has a foreclosure date, we don't have time to play around with this.
I'm going to be very direct. And they know.
That's right. So someone in pre-foreclosure might be more in denial.
So I don't want to be so direct. So the script on someone that it is direct, like you have a foreclosure date in two weeks, I would say something like, hey, Justin, or I would say, Justin? Yeah.
Oh, hello. Hey, so listen, a really quick one, two, three main.
It still shows up. It's for auction.
Were you able to get that stops? I think we got it all handled. Oh, perfect.
So it's, so what did you end up doing? And this is where, I don't know the answer, what they would say. What would they usually say? So usually they'll say, Oh, I, you're just, that's right.
That's it. That's literally that simple.
I see there's a forward closure date for May 1st, April 16th as we're recording this. Right.
So it's like, yeah, I see that super simple. And just to get the conversation going for them to say something, right.
So they're going to say, um, in that situation, they'll say something like, oh no, no, no, I know I'm working with my bank. I'm like, oh great.
So are you doing loan modification? Like, what are you working on? And I keep going. Right.
And of course, tonality is huge. I, I teach tonality and NLP and all that.
Um, but that's again, it's not cause you're not attacking, you're not questioning you're, you're again, trying to keep it to like, you're my friend, like I care. Right.
And so, you know, they're going to keep talking. And again, if someone has a foreclosure date, like this is where I'm like, OK, well, Justin, even if you're like really hard headed, like those are the best ones.
Right. The ones that are like, screw you.
F you. And like every man ever.
Yeah. Especially the whole woman man thing, too.
It's like, I got to tell you, I know everything. And I'm like, OK, great.
No problem. Yeah, you do.
So can you show me why this still says you know remember i'm the expert you don't know me yet but i'm the expert you don't know what you're doing right so instead of like i feel like this is husband and wife conversations too guys should just be listening to you right now on this and be like just say yes honey i'm i don't know what i'm doing well it's funny you said that because on my youtube i'll see comments because i still see like the comments i try not to but like i still see a comment so i'll try to respond and um i'll have people be like thanks for the marriage advice totally i'm literally sitting here like are you just talking to every husband in the planet right now just listen to your damn wife she's always right it's always a wife that's like the driver where it's funny anyways so um you have ad and you're get your sorry go go, go. Keep back.
Okay, so... But back to...

So yeah, so that person was like,

oh, what are you doing or whatever?

And if they're like super hardheaded,

I'm like, oh, oh, absolutely.

Well, it sounds like you know

what you're talking about, Justin.

Like, that's great.

So the only thing I'm worried about...

Which plays in an aisle ego.

Right, so exactly.

And so, okay, but Justin,

can you tell me why it still shows up? Because I see this I see this on the list. You want me to send it to you? Right.
You see what I'm doing there? I'm like validating him, but also poking doubts, poking holes and doubt into his certainty. Yeah.
Right. Because objections are just a smokescreen of uncertainty.
Right. They're telling you this because they're not even sure what you're saying is something that that's going to work for them and all of that.
And I have a whole training on that. And, um, so anyway, so at that point, this is where it gets real, right? Because I know that, you know, that I know that this, that you're BSing me right now.
It's really trying to filter right now. No, you don't have to filter.
Let them fly. But, but no, like, like so you know you're trying to bullshit me and i'm i know that it's a sale date and so now i'm giving you a safe place to be like oh well i gotta check like okay justin i would check right now because the foreclosure gets in two weeks and if it's not a hundred percent i've seen so many people that wait till last minute and the longer you wait less options you have.
And so see how I just changed the whole narrative of the conversation. So it can go any direction.
Well, now you're giving them, well, what, what else can, you know, cause the word options now, and now I'm thinking like, well, fucking, what are my options? Exactly. And anytime we say that we'll even have on the script, um, you know, um, we, you have so many options, please don't let your house house foreclose like on the texting script and that in itself gets so much for so many responses because people are like they'll literally just say what you said yeah well what are they of course what are my options what are you talking about and then you want to get them on the phone if you're texting right so you can have this conversation exactly um this is incredible so what happens if this person is 90 days you know you know, it's more pre foreclosure, not auction date.
Um, how does it change? So it's, I don't mention the foreclosure date or I don't say like May 2nd or anything like, I'm not as aggressive. Um, but if it's, you know, 90 days out, I'll see something like, have you gotten it taken care of? Yeah.
And so it's more generic and it's like less, they probably always say yes. I'd say yes i'd say a vast majority yes i got to inhabit exactly so that's where i go into the next like um great you know what did you end up doing or oh that's a good i'm so glad because you showed up on my list and do you see it so it it depends either way kind of like feel out the conversation but on the script there's like two or three different responses to that um and you never mention an entity you don't say hi i'm nicole from so-and-so llc no that's that's amazing if you can just keep vomiting all over and give me all these answers and you're like all they know about me is my name is nicole literally i don't even say my last name that's phenomenal like most of the people i'm not kidding 30 to 45 minutes in and they're they don't know my last name They have no idea who I'm with, but I have made them feel so comfortable.
And most importantly, I've made the conversation about them that they want to tell me. Well, you've obviously studied sales a long time, right? But what everyone needs to understand is that's the only conversation that matters is what's in it for me.
Every conversation ever is like we are a part of a mastermind together in that entire room of 300 people. When you're talking to someone else, the other person is thinking, what's in it for me during this conversation every time.
And I can feel it when they're talking to me. I'm like, they're trying to figure out how like I can serve them.
Right. And, but that's every human connection is what is going to be affecting me in this conversation so always keep that in mind regardless of the scenario let's let's dive a little bit more into options that sellers actually have um that you know the state of the market the real estate market how many people are out there right now that are really in this type of pain? What type of options are you able to come up with? How many, you know, what are the ways to target these people? I was talking to a little bit of the granular, like, this isn't, I can't imagine this is nearly as big as like when you and I first got started in 2007, 2008.
But maybe it is. Again, I don't target this niche.
I target wide. so i'll go like the whole united states versus just this is it still a pretty big niche absolutely i mean first of all remember we're hyper focused right so we don't need to cast a large net because the leads that we have like we get a higher return because we're solely focused on these people um It doesn't matter what's going on in the economy.
There's always going to be people that need help. Yeah.
Right. And so, you know, short sales, one exit strategy, people are over leveraged.
They own more than the house is worth, but they have so many more options, especially. Where is that? If I can ask, where is that? Where do people like, I feel like the market is appreciated for over a decade.
Where in the hell is where someone owes more, I guess, if they refight out and, you know, wanted to go buy a boat, so they over leverage themselves?

I get that all the time because especially in what you're doing, you're so removed from like this side. But what you don't see it will, first of all, let's remove the idea that the market has any indication of whether someone's going to be upside down.
Fair. Just take away, because even though it absolutely influences where there'll be more, it has nothing to do with someone's personal financial situation.
True. So I'll give you an example.
The people that we're working with, they not only overpaid, right? So they bought in 2022, they overpaid. Well, yes, of course, the market, you know, balancing out, you know, and yes, house is appreciated.
But right now, especially in certain areas, people are not able to sell what they could and all of that. But that aside, because it's not that much of a dip, right? You have people and the reason why I say focus on someone's personal financial situation is because when someone's behind on one thing, they're generally behind on everything else.
Totally. So this is why it doesn't really matter about the market.
Cause you can be in the best market ever. In fact, when arguably after 20, 2008 and we were in like 2011, we were like going up drastically crazy amount of appreciation

for sure and yet we had a crap ton of short sales because people if you think about it city liens

hoa liens um second mortgages taxes i mean all of that plus if they're not maintaining the home

so it's as is i mean it's not hard for someone to be upside down when you start with all the debt and the liens and all of that. Because, again, it's their personal situation.
And so when people look at it, especially the people that drive me crazy are like the analysts. They're like, oh, well, the economy is so great.
There's somebody in family that actually did that. We kind of went head to head on this panel and it was really funny but he was just like well you know the numbers say that we're going to appreciate so much that we're not going to have anybody that's really going to need help and i was like wow like you're so disconnected from reality like because that's because if that's the case then how can we help over 100 people a month right and we have an of people that are doing it.
Totally. And you're just you and your market and your sector.
Yeah. And that's not, to your point, the community and then just everyone else is going through it.
We're across the country. We're nationwide.
Right. So we get a pulse on all the states.
Not every single one, but the majority. So we get to see between us at the Short Sale queen, plus all of the members in our community, the investors and realtors in all different markets, what's going on and the influx.
And so that's where the short sales are, is like the people that personally they, you know, and then think about this too, the people that we didn't even talk about the forbearance. And so after 2020, we had 10.1 million people that stopped paying their mortgage.
Of course. Yeah.
10.1 million people. And the way it was packaged was, Hey, don't worry about it.
The bank's going to help you. Like I went on a rant on Facebook that went viral.
And I was like, guys, stop telling people to stop paying their mortgage for the love of God, please. Like we're the professionals, like we're supposed to be, um, especially as realtors, like, cause I'm a realtor too, right? I'm, I'm both.
And so people are looking to us for advice and looking up to us and you're telling them, Oh, don't worry, just call your bank. Well, what happened was, you know, the president kicked the can down the road cause he just got an office and he's like, I don't want foreclosures attached to my presidency.
So what did he do? Postpone, postpone, postpone. So forbearance is supposed to be a temporary pause on your mortgage payment.
So for the people listening that don't know what that is, historically, lenders have only offered forbearances for two to three months. Because if someone is behind on one payment, they're definitely not going to or are struggling to make one payment.
They definitely can't make three or four at once. Right.
Right. So the forbearance option was strictly for people that were behind, but like in between jobs and like they're going to, they just need time to catch up.
Sure. Well, what we decided to do was extend it for over a year.
Sweet. So all of these people stopped paying for over a year.
Well, once you stop paying, you adjust your lifestyle accordingly. Of course.
Even if you didn't legitimately have a hardship. Yeah.
And then you factor in the people that did have a hardship, lost their jobs, and could never catch up. So you have a wave of people.
Now, it wasn't 10.1 million, right? It went down 5 million, 3 million, but you still have millions of people that are now we're seeing like, oh, well, so what happened? Oh, well, you know, I did a forbearance and then I got a $50,000 bill from the lender and I couldn't pay it. And so that I was forced to go into a loan modification and now they restructured my loan.
I was at a 2% interest rate and now they want to put me at an eight because whenever they restructure, they put you at the current interest rate. All those people that you're talking about, the worst thing they could do is fall behind because now they're at today's interest rate.
So that's interesting. I would have thought, again, not being in the niche, I would have thought they would have just restructured.
So let's just say the 50 grand, they would just tacked it onto the back of their loan. So instead of owing $100,000, they owe $150,000.
So the thing that you need to understand is that the loan modifications are the best thing for the lender. The lender is a financial institution.
So there's never a situation where they're like, I want to help. The bank.
Yes. In fact, if you want to learn how to market, look at the way the government markets programs.
They are the best marketers. They say things like, we're going to put a forbearance plan and a COVID relief for you.
So what we're going to do is we're going to restructure your loan. Don't worry.
We're going to add, we're going to extend your loan from 30 to 40 years. Don't worry.
So I may not be the smartest person in the world, but if I'm in a mortgage for 20 something years and now I have a 40 year mortgage, I don't really feel like you're helping me here. No, it's a lot more interest I'm paying.
I mean, literally the lenders now have these notes that are performing because now you're current and they get to add all of this extra money on their books. Like this is amazing for the lenders.
portfolios now. They're like, well, you had a $200,000 loan.
Now it's going to be a four. I mean, that's crazy.
Right. And so, and they do it a couple different ways.
Like, you know, FHA, not to get into too much, but like FHA, they'll create a second mortgage. So it's like a non-performing loan.
I mean, there's just so many ways that they can structure it. But most of these people that do loan modifications end up in a short sale because none of that debt is forgiven.
They restructure it and add the interest payment, the late fees and all of that. And now when you go to sell, you're essentially paying into something that you can never get out of.
And these are the same people that a lot of them, I'm assuming some level have some financial pain with jobs, income, that because the economy has shifted in the last 12 months. And so now that wasn't a big deal while they had the job.
They're like, all right, not great, but I'll keep paying for the extra 10 years. Now the economy shifts.
Things are getting a little tighter. Now they have to do a short sale because they owe too much.
Or what happened 100%. And then what we also see happen with a lot of people that actually get approved for a loan mod because a lot don't.
Right. Because a loan modification, you have to prove that you can afford it.
You have to show financials, all that. You know, they're going to determine the debt to income ratio.
But what we end up seeing too, is that they have a trial payment. So if the lender approves you, and it doesn't matter the terms, right, let's just say say they approved you and they'll give you three trial payments.
And the majority of the people end up missing the trial payments because they haven't been used to paying. And once you miss it, back and foreclosure.
Yikes. So what are some solutions that you guys offer and investors should be offering? I mean, I think this is a podcast that all investors are watching and listening to.
What are the solutions? And you've already hit the head. Don't come in with mail formula and cash offer.
What are you guys doing in your own company to be a value add to the homeowner? So the biggest value add is to determine where their current situation is. So if, of course, the majority, and just understand the majority are going to tell you, I want to keep the house like, okay, great.
So here are the options to keep it. You can apply for the loan modification.
If they are only two or three months behind, like anything less than six months, they could apply for a forbearance. But, but you know what, before we go into that, tell me what's going on.
Why did you fall behind? And that question is huge because the reason why they're there is going to determine the solution okay because if it's a long-term hardship it's not short-term meaning like it's not going to be resolved anytime soon there's no other options but selling they have to sell they have to sell if they are just in a situation where like the money's coming and blah blah blah and i say that like that because someone always says that uncle's gonna pay yeah you know i'm like great let's put a deadline on it yeah he hasn't paid up to this point and just to that point you guys are nurturing that homeowner for like they say okay my uncle's gonna cut me in check in 45 days i would think internally you have a sequence of following up nurturing calling yeah because that's where the value seven touches is 67 touches six to seven oh six to seven is normally when the contract signed yeah okay so if you are even the people that you know they're like already doing a loan mod or whatever we know realistically that they'll probably fall behind again and so we want to make sure that they're in a sequence and we have campaigns for over a year that are built out so we use a keep infusion soft um stephanie is my operations banner she's phenomenal you met her apparently and she i'll have a vision and she's like great so this is how we're gonna execute it i'm like i love why I bring her to family. She's awesome.
Um, but we, she's built out an entire sequence for an entire year where it just has these touch points of checking in text messages, emails. Um, we have a, um, manual for the sellers.
Like it's a, it's a book of, um, it's an ebook or whatever. And it just gives them like all their options, the most common questions, like just as much information as possible so that when they finally do come to terms, we're the people that they're going to work with.
Okay. And so if they owe genuinely more than the house is worth, what do you do? So that's a short sale.
And so the easiest way to identify a short sale as an investor is let's just give like real numbers. So say you're talking to a seller and, and this goes for not even people that you're targeting.
Like this could be anybody that you guys are targeting. Of course we come across a lot of them.
I mean, regardless of whether you genuinely or specifically go after the niche or you're like me, I just go so freaking wide with my database that I get them no matter what. Right.
I just don't on them so unfortunately you would probably tell me Justin get your guys to know my script which is why you're going to be teaching at my mastermind um and so I can't wait to have you kind of get involved in my community and teach my community what you know and have them get in your community that will be incredible um but again we come across this all the time where they owe 220 on a $200,000 home.

And you're just like, well, I don't know what to do with that.

Well, and here's the thing.

So that's how I got into the business.

So when I got into the business, I was 21 years old.

And then when I went out on my own, because I worked for an REO brokerage and was doing

REOs, foreclosures, I was broke.

When I started my business on my own, I was broke. I was 23, 24 years old and just extremely tenacious.
And I'm like, okay, I don't have $10,000 to $20,000 to spend on marketing to compete with these home investors. And at the time, they were like it, right.
Yeah. And so I'm like, okay, well, I keep talking to these investors and they keep telling me, I'm like, what do you do with the leads that the numbers don't make sense? And they're like, we move on.
It doesn't fit our pie box. And that was like this light bulb moment for me in like 2010, 2011, where I'm like, why am I trying to compete when I can be the best thing that's ever going to happen to you and your business? And I'm another tool in your toolbox because you're already throwing away these leads to you.
They're dead leads because there's no equity there. But now these leads, when you come across a seller that you're like, okay, you owe 200, but my offer is a hundred.
So, so even though you've already done the hardest part, you've paid for the lead, you've had the conversation with the seller and the seller wants to sell to you, you walk away because you're like, I'm sorry, I can't do it. So the only thing now is instead of walking away, you're going to say, you know what, I actually have a part, we partner up with this company.
This is all they do. I'm going to send you their information and you shoot it over to us.
Um, and so if you ever refer a lead, it's the SSQueen.com and you shoot it over to us and then we pre-qualify them. And now you get the first right of refusal to purchase the house through the bank instead of the seller.
So you go through the negotiating with the bank of what they're worthy, willing to take. Yeah.
In a true short sale scenario. In a true short sale.
So the seller, of course, is still the seller, right? So they're the ones signing off, but they want to work with you because you're the person that referred it over to us. So we get the offer signed.
We don't have to list it. There's no other competition.
And the bank, of course, is going to make the final call, but we're negotiating your offer with the bank. So now you have the opportunity to purchase at a discount when this was a dead lead.
And that's because you're licensed. Not everyone, Like I can't go negotiate with the bank.
Right. Because you're licensed.
I need to represent the seller. That's right.
And so, and it doesn't matter in state because where is your license? So I'm licensed in four states, but we have agents through the brokerage and the other states that are on our team. Got it.
And so we're able to do it that way. And so you figure out whatever kind of split you do and say, Hey, let's negotiate the short sale and whatever.
That's how my, that's how the short sale queen was born. And so I was cold calling and prospecting.
Cause I always tell people when you're building your business, the low hanging fruit, but then the longterm, right. So where people are coming to you and you know, I'm, I'm so grateful.
Cause we, in 2018, we became a hundred percent referral. So 2018, 2018 um that's where i stopped cold calling and didn't have to do that anymore and we deal we get i mean literally we we have like 110 short sales right now like we do over 100 a month consistently and so for people to it and i have an amazing team who love it just as much as i do and so I'm not in production anymore I just oversee it so but that's how the whole short sale queen was born where it's like great and I built my whole brand on my reputation so and people don't even have to like think about it and if Nicole says she's gonna do it she's gonna do it yeah period guys I know you're watching this and listening to this you have to start following her because even me like oh my god how does my team get in her world because whether you're doing ppc leads cold calling texting direct mail you're coming across short sales i mean we all are yeah i am just not training my team to navigate it in the way you would so just like you said said, when they owe 220 and our offers or the house is 200, our offer is 170, we're like, next.
Right. And that's the thing is like, you don't have to target these deals.
You just have to understand like, you need this tool in your toolbox. Because at the end of the day, your cost per lead is going to go down.
And you now have a whole other pipeline of opportunities that you don't have to do anything. You literally just

refer it over. So I can refer all those leads over to you and your team and I'm out of it and we

someday find a check. And anyone listening or watching this can do the same thing.

Oh yeah. We have wholesalers all the time.
That's like mailbox money for them because they

actually don't want to buy it. And then we have a whole other set of investors that are like,

I'm getting the best deals. Like these are my deals that purchase.
But the way our operations is set up is that you get weekly updates because my biggest pet peeve in this industry is that everyone tries to chase referrals, but they don't do anything to keep them. And I knew, I'm like, okay, if I'm going to be 100% referral, like I want to make sure that people know we're on it.
And so every Monday, we train the sellers and we train everybody that refers it. Mondays, you're going to get an update.
And of course, in between if you have questions. But that way, we can focus on the negotiations.
But you still know every step of the way what's going on. So where do people send you referrals? So you'd go to the shortsellqueen.com.
Okay. And at the top, you'll see referral lead.
And then then you put your information and then you put the seller's information. And the only thing we ask is that you give them a heads up that we're going to be calling because we want to be an extension of the existing rapport that you've already built.
You already did the hard part. And so we don't want to get filtered out with all the other people blowing up their phone.
So just make a warm introduction so we could just take it from there. You don't have to explain the short sell process.
You don't have to explain anything. In fact, the less you say, the better if you don't know.
Yeah, of course. Because we have to do the deliverables for whatever you promise.
When I first started out, you know, I was like super young and ambitious. I miss my age.
But when I first started out, I was, you know, a salesperson, right? I'm like, oh, we'll do it. We'll handle it.
And so these investors, they would be like, oh man, you know, Nicole will you like 50 grand and I'm like, all right, let's chill. Because, you know, salesperson, right? I'm like, Oh, we'll do it.
We'll handle it. And so these investors, they would be like, Oh man, you know, now Cole will get you like 50 grand and so on.
I'm like, all right, let's chill. Because you know, I had to be the one to do it.
So chill. Like we're not getting the 50 grand they're upside down.
And so yeah, the less the better if you don't know. But we will pre-qualify them and we have a 98% close rate.
And the reason why is because one, we don't stop until it gets done, but we make sure, is this a deal we can actually close? Like we're not going, there's no reason for something to pop up and we know how to, what to look for and how to be able to deal with those things, the deal killers, you know, before even wasting time or money. Guys and girls, make sure you are following Nicole, uh, the short sale queen on YouTubeshoresealequeen.com.
Nicole Espinoza, it has been a pleasure. You are a godsend to our entire community.
Can't wait for you to teach my world. I'm excited.
How to do it as well. Thanks so much.
Thank you. All right, y'all.
That's it for this episode. We'll see you next time.
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