Watch that niche...

Here at MRI Overseas Property, we're not seeing any downturn in demand but some of these points apply even to us!

Developing a new market niche is one of the best ways to build your real estate business. By focusing on these opportunities, you can enhance your expertise, help clients more effectively and distinguish yourself from the competition. Here are several strategies for success in serving target markets that can help you generate more income in 2008.

Scratch that niche: You might like it

International Sales

Throughout Florida, Europeans, Canadians and Latin Americans are buying homes, both primary residences for their families and second homes for vacations. Many overseas buyers are seeking second homes, while others are looking to move capital out of their native countries or make long-term investments. A recent survey by the National Association of Realtors® (NAR) found that Florida led the nation in international buyers with 26 percent of total U.S. sales in 2006. Why? The weak U.S. dollar makes Florida homes a bargain for Europeans and gives Canadians more buying power. Latin Americans like to invest in the U.S. and recognize that now is an ideal time to buy lower-priced properties.

Advice from an international sales expert

Key benefit: International buyers are ready, willing and able to purchase Florida homes and condominiums.
Fundamentals for success: Knowledge of your local second-home market and international buyer groups (Europeans, Canadians, etc.). An effective targeted marketing program reaching (A) international second-home residents in your market and (B) potential buyers overseas using search engine placements and other web tools. Knowledge of a foreign language (by at least one team member).
Good first steps: Join an international chamber in your area. Team up with a mortgage broker or attorney who works with international clients. Start building relationships with recent international buyers in your community.
Reaching this market: Study international buying patterns in your market. Add “international-friendly” features to your web site and online market program.
Time frame to become marketable: Less than a year
Longer-term goal: Earn NAR’s Certified International Property Specialist (CIPS) designation. Learn more: http://www.realtor.org/cipshome.nsf/pages/AboutCIPS
Tip from a pro: “You need to understand the different cultures and be able to explain how U.S. real estate works. When you factor in the exchange rates, our state can offer tremendous bargains for many international buyers.” - Charles Dinsmore, CIPS, broker-associate, RE/MAX Partners, Fort Lauderdale
Short Sales

Many Florida real estate professionals today are helping sellers in financial distress. They give hope to homeowners facing foreclosure by explaining their options, such as a “short sale,” when the market price for a home is less than the amount due on the mortgage. Recent statistics compiled by RealtyTrac, which tracks foreclosures throughout the country, show Florida had one foreclosure for every 95 households, the third highest rate in the U.S. This includes homes whose owners received a “notice of default” from the lender as well as homes that have actually gone into foreclosure. In third-quarter 2007, there were 60,992 such properties in Florida, according to RealtyTrac — more than double the number reported in third quarter 2006. For real estate associates, an owner in financial difficulty usually is a highly motivated seller, hoping to resolve the situation prior to foreclosure.

What is a short sale? Many owners holding adjustable rate mortgages (ARMs) or interest-only loans are facing higher monthly payments. If market prices have declined as well, a seller may have no equity in the home — sometimes called an “upside down” sales situation. In a short sale, the owner asks the mortgage lender to accept a loan payoff that is less than the total amount due. Basically, the seller’s net proceeds from the transaction will not be enough to cover the mortgage obligations and closing costs. To request a short sale, the owner typically presents the lender with evidence of financial hardship and a current market estimate of the home’s price. Any potential short sale is contingent on the lender’s approval. Learn more about Short Sales seminars
Key benefit: In addition to generating an immediate sale, helping a motivated seller in a crisis can create a “client for life” relationship leading to future sales and referrals.
Fundamentals for success: Ability to do quick financial calculations and clearly explain the advantages and disadvantages of a seller’s various options.
Good first steps: Educate yourself on the pre-foreclosure options. Talk with your broker and understand an associate’s role in the process. Build a professional relationship with an experienced mortgage broker. Learn more.
Reaching this market: Advertise yourself as a “short sales” specialist. Make cold calls or knock on doors in your target neighborhoods. In listing presentations, try to assess the seller’s financial situation.
Time frame to become marketable: Time to understand the pre-foreclosure process, which could be a few days or weeks.
Longer-term goal: Generate repeat business with loyal sellers who may be able to buy another home in the future.
Tip from a pro: “Normally, owners don’t say, ‘I can’t make my payments,’ so the associate should ask about the type of loan, the rate and if there have been any recent changes.” - Mike Pappas, president, The Keyes Company, Miami
Foreclosures

Throughout Florida, foreclosures are rising quickly as homeowners struggle to keep up with their monthly mortgage payments. According to RealtyTrac, the incidence of foreclosures will remain high and may possibly increase thanks to the number of loans due to reset through the middle of 2008 and the continuing weakness in home sales. Florida sales associates can get a piece of the action by working with renters seeking an inexpensive first home, “handyman” types who want to repair and resell a fixer-upper and investors seeking income-producing properties. Working directly with lenders on sales of real estate-owned (REO) or bank-owned foreclosures is a highly specialized field that usually requires a corporate approach.

Key benefit: A foreclosure buyer may decide to list the property again in the near future for a “move-up” or a profitable resale.
Fundamentals for success: Ability to assess a property’s condition and the costs necessary for repair or renovation.
Good first steps: Go to a Web site that lists foreclosed properties to get a better understanding of what’s available in your market. Some sites include, www.foreclosure.com, www.realtytrac.com/ and www.foreclosurefreesearch.com.
Reaching this market: Advertise yourself to buyers as a foreclosure specialist. Include links to foreclosure sites on your Web site.
Time frame to become marketable: You can start working with buyers almost immediately.
Longer-term goal: Generate repeat business with new owners who may list their home in the near future or seek to purchase other investment properties.
Tip from a pro: “This is a great opportunity to bring first-time buyers into the market. Prices are not giveaways, but they are often below the normal selling prices because the banks want to move the property.” – Eduardo J. San Roman, president and CEO, First Service Realty-GMAC Real Estate, Miami
New Home Sales

With excess inventory and a wait-and-see attitude on the part of buyers, Florida builders and developers need all the help they can get to find qualified buyers. The National Association of Home Builders estimates that 1.08 million new U.S. homes will be started in 2008. About 125,000 of those homes and condos will be in Florida, estimates Orlando economist Hank Fishkind, president, Fishkind & Associates. That’s in addition to a statewide inventory of several hundred thousand newly built residences that remain unsold. At the same time, many savvy buyers appreciate working with real estate professionals who can help them take advantage of builder incentives and special financing opportunities in Florida’s new subdivisions and multifamily communities.

Key benefit: Rather than work with an individual seller, you can represent a builder or developer offering multiple homes or condominiums who can construct more residences in the future.
Fundamentals for success: General knowledge of new construction. Familiarity with a builder’s models, subdivisions or condominium developments.
Good first steps: Start touring new home communities and condo developments. Introduce yourself to the sales team and register as a participating sales associate or broker. Post the new-home offerings on your Web site.
Reaching this market: Look for well-established builders and developers who stand behind their product. Visit their communities and sales centers. Build a personal relationship with the in-house sales team (large community), or directly with the developer or builder (smaller projects and individual spec homes).
Time frame to become marketable: One to two months to familiarize yourself with the sales team and community.
Longer-term goal: Eventually, you could work for the builder or developer full-time as a broker or sales manager.
Tip from a pro: “Most new community developers have generous co-op broker programs today. You should know these communities like the back of your hand, and include information about these opportunities on your Web site.” – Real estate analyst Lewis Goodkin, president, Goodkin Consulting, Miami
Property Management

Investing in Florida real estate is one thing. Managing it is another. Many who invest in apartment buildings, individual condo units, shopping centers, office buildings and other types of income-producing properties need someone else to manage their holdings. Many large public companies and real estate investment trusts (REITs) are also getting into the Florida market. Owners usually commission property management firms staffed by people with a solid background in real estate. For those who enjoy the sales process, becoming a leasing specialist can become a full-time career in the property management field. This is a field that pays a premium for communication skills and ability to produce results: owners expect to see a positive return on their investment, regardless of market conditions. And tenants can call with problems at any time of the day or night. On the plus side, property management, either in full-time salaried position or as a supplement to a sales career, can provide a steady flow of income. And being able to manage a property for an investor can extend the relationship beyond the immediate sale, opening the door to future transactions.

Key benefit: Steady income from providing an ongoing real estate service.
Fundamentals for success: Communication skills for dealing with owners and tenants. Financial skills and familiarity with spreadsheet applications. Relationships with service providers, such as janitors, landscapers, plumbers, painters and electricians. Ability to formulate and execute a yearlong management plan.
Good first steps: Talk with current property managers and educate yourself. Consider working for a larger firm for a year or so to learn the ropes. Study the local market to identify a good niche: residential apartments or commercial sectors. Learn more.
Reaching this market: Pinpoint buildings and facilities that may need hands-on professional management. Approach those owners with a presentation that highlights your experience, knowledge, expertise and abilities.
Time frame to become marketable: A few days, a month or a year or more depending on the size and scope of the property and the owner’s management needs.
Longer-term goal: Take property management courses through groups like the National Association of Residential Property Managers (www.narpm.org), earning designations like Residential Property Management Professional (RMP), Master Property Manager (MPM), Certified Support Specialist (CSS) and Certified Residential Management Company (CRMC).
Tip from a pro: “To be successful, you have to select one or more specific areas of the market (apartments, strip centers, industrial space, etc.) and immerse yourself in it.” – Susie Rice, vice chairman, RMC Property Group, Tampa
Luxury Homes

Luxury home sales have held up surprisingly well during Florida’s residential downturn. That’s because affluent buyers buy a luxury single-family home or condominium without worrying about daily changes in mortgage rates. Today, the pricing range of luxury homes varies around the state — anywhere from $500,000 or so up to $10 million or more. In most cases, these are waterfront, country club or golf-course single family homes, or high-rise condominiums with ocean, gulf, bay, or riverfront locations and views. In today’s Florida market, there appears to be relatively strong demand for luxury homes, according to several leading brokers. “It’s unusual to have more activity in the luxury market, which has a smaller overall pool of buyers,” says Ron Shuffield, president, Esslinger Wooten Maxwell (EWM) in Coral Gables. “However, the current tighter lending practices don’t usually impact buyers of luxury homes and condos.”

Key benefit: Residences with a higher sales price result in a larger commission check.
Fundamentals for success: Strong presentation skills. Marketing skills to connect with affluent sellers and buyers. Persistence, as luxury homes may take a year or more to sell.
Good first steps: Familiarize yourself with the local luxury market and identify a niche to serve. Consider joining a team of associates that is already focusing on high-end buyers and sellers.
Reaching this market: Join civic and charitable organizations that bring you face-to-face with affluent homeowners. Develop a presentation that highlights your ability to market luxury homes and condos effectively.
Time frame to become marketable: If you are already a successful sales professional, you could generate a luxury listing in just a few days. Otherwise it could take weeks, months or a yearlong campaign to break into your local high-end market.
Longer-term goal: Shift your sales career into the luxury market.
Tip from a pro: “A good sense of design and the ability to showcase a seller’s home are crucial elements for success in the luxury market.” - JoAnn Roberts, sales associate, Coldwell Banker, Pinecrest
Commercial Brokerage

Economists expect Florida’s commercial real estate market to outperform the residential sector in 2008, with active sales and leasing activity in the retail, office, industrial and hospitality markets. The hottest properties, analysts say, are likely to be warehouses and suburban shopping centers, which continue to be needed in local markets with strong population growth. That’s an important point for real estate associates seeking opportunities in the commercial sector. After all, it’s easier to break into the market by representing individual owners of smaller properties, such as neighborhood retail centers or industrial/office properties.
Key benefit: Increased long-term revenue and diversification, because of a strategic change in your business.
Fundamentals for success: Math and computer spreadsheet skills. Ability to analyze the financials (leases and company balance sheet) to build the investment business model, including commercial loan structures and tax issues. Thorough knowledge of a market area or product type.
Good first steps: Educate yourself by taking an introductory course from the CCIM (Certified Commercial Investment Member) Institute. Join a local commercial board or society or Commercial Information Exchange (CIE). Join a commercial brokerage team or become an “apprentice” to a senior commercial broker. Learn more: http://chapters.ccim.com/florida.
Reaching this market: Build a new personal network and stay in touch regularly by using email, direct mail, phone calls and personal visits.
Time frame to become marketable: A minimum of six months to a year. You may be able to close on a lease or small commercial property within six months, but some types of transactions take one to two years to close.
Longer-term goal: Become a commercial sales or leasing specialist.
Tip from a pro: “When you start out, you should spend 100 percent of your time learning everything you can about a certain product type, such as retail shopping centers, or a geographic market.” - Cynthia C. Shelton, CCIM, CRE, director of investment sales, Colliers Arnold, Orlando
Young First-Time Buyers

A new wave of young homebuyers is entering the Florida market. A recent study by International Demographics found that there were 6.2 million adults age 18 to 35 with household incomes over $100,000 in 87 major metropolitan areas. In Florida, those potential buyers include recent college graduates just starting their careers.

Today’s lower sales prices, seller incentives and affordable mortgage rates make 2008 an ideal time to starter-home purchases. In many cases, monthly mortgage costs are comparable to rent payments.

While renting a home or apartment may make sense for a young professional who expects to move in the next year or two, home ownership continues to be an attractive long-term financial investment, In fact, a desire to own a home of their own and to establish a household is the most often cited reason for purchasing a home, according to NAR’s recent 2007 Profile of Homebuyers and Sellers, Florida Report. A job-related move, desire for a larger home, a change in family situation, desire for a home in a better area and a desire to be closer to family and friends are also high on the list of reasons for purchasing a home.

Key Benefit: First-time buyers appreciate a sales associate who walks them through the purchase process — and will remember that person when it’s time to sell in the future.
Fundamentals for success: Ability to connect with buyers in their 20s and 30s – in person, and via voice, text messages and online conversations
Good first steps: Familiarize yourself with the local starter-home market. Feature these lower-priced listings prominently on your Web site.
Reaching this market: Visit nearby apartment communities and market yourself as a specialist serving first-time buyers. Start compiling an online mailing list of potential buyers. Look for opportunities to participate in college alumni association events.
Time frame to become marketable: A few days or weeks.
Longer-term goal: Develop “clients for life” who continue working with you as they purchase larger homes and investment properties later in their careers.
Tip from a pro: “Many college graduates have substantial debts, so you have to be able to help them improve their credit history before applying for a mortgage. Sometimes it takes several months to guide them through the process until they are ready to buy.” - Nancy Pardo, sales associate, The Keyes Company, Boca Raton
Seniors

More than 78 million members of the Baby Boom generation (both (1946-1964) are beginning to reach their 60s. And just like their parents, a significant percentage want to retire to attractive communities in Florida where they can enjoy their favorite outdoor activities (boating, tennis, jogging, golf) and indoor pursuits (shopping, dining, cultural activities). And in many cases they want to “test the water” by buying a second home in Florida for family vacations or seasonal rentals. Realtors who cater to the diverse interests and financial requirements of the Boomers could build a loyal clientele that will continue to grow for the next decade. Florida also continues to attract older retirees — the members of the “G.I. generation” born prior to 1930. They may be looking to downsize from a larger home or move into a community that offers both independent senior living and assisted care. With both groups, an effective sales professional can build a business with strong revenue potential.

Key benefit: Specializing in one of Florida’s traditional demographic segments – and one that will be growing significantly in the next decade.
Fundamentals for success: Personality traits, including friendliness, patience and compassion. Ability to use traditional communication channels (hand-written notes, direct mail and the phone) as well as email and Web technology.
Good first steps: Learn all you can about local communities that cater to retirees and seniors, including golf-course and waterfront residences. Market yourself as a specialist in serving retirees, and be ready to show them an appealing Florida lifestyle -- not just a home.
Reaching this market: Cultivate out-of-state buyers through an advertising program that focuses on key U.S. states and regions. Participate in local community activities that attract retirees and seniors within your own market. Offer assistance to younger family members who may be helping a parent change residences.
Time frame to become marketable: A few days or weeks.
Longer-term goal: Building a loyal clientele that generates an ongoing flow of word-of-mouth personal referrals.
Tip from a pro: “Don't make the mistake of stereotyping ‘seniors’ into one category just because they're over 50. The needs and desires of one generation can be completely different from another.” - Karen Ashley, sales associate, Watson Realty, Jacksonville
Singles

From recent college graduates and young professionals to divorced parents and elderly widowers, singles at all age levels constitute a growing segment of the Florida market. Nationally, 51 percent of all U.S. adult women live without a spouse, and by 2010 Fannie Mae estimates that as many as 31 million single women will be homeowners — 28 percent of all U.S. households. A recent NAR study prepared for Florida found that single women purchased 1.5 million homes in 2006 — about one out of five residential sales. Among the factors that have contributed to this trend are increased wages and greater availability of financing for women. And while much of the demographic research has focused on single women, it’s important to note that single men purchased about 750,000 U.S. homes in 2006 — another growth segment. Because those lifestyle trends apply to Florida as well, real estate professionals who successfully focus on this market can expect grow their business for many years to come.

Key benefit: Specializing in a fast-growing demographic segment with high growth potential.
Fundamentals for success: Understanding the specific lifestyle needs and desires of single men and women, such as security and convenient access to social gathering points.
Good first steps: Talk to single friends, neighbors and business associates about their dream homes. Identify communities and neighborhoods that attract singles and get to know their amenities (outdoor cafes, fitness centers, parks, etc.)
Reaching this market: Go to places where singles like to meet and strike up conversations. Advertise your real estate services on websites that attract singles in your community.
Time frame to become marketable: A few weeks or months.
Longer-term goal: Create “clients for life” who refer their friends and family members — and remember your services when it comes time for them to buy a new home.
Tip from a pro: “Most singles, especially women, are looking for a secure, maintenance-free lifestyle. They want to spend their free time on recreational activities — not a fixer-upper.” – LaShawn Norden, sales associate, Watson Realty, Longwood