Short Sales, Pre-Foreclosures, and Distressed Property Deals Explained | Rick Hamrick

Rick (00:00)
Whoa, whoa, whoa, He was, let me show you how to monetize that. Let me help you understand how you can help this homeowner. And this was a mountain. This was an FHA loan and the borrower was in

house for less than a year. It was about 11 months when she contacted me. The story is much bigger than the time that we have on this podcast, but just know that when he showed me how to flip into that solution mindset and providing something that would actually add value,

Scott Bursey (02:01)
Hi everybody and welcome to the Real Estate Pros Podcast. I’m your host Scott Bursey and today I’m joined by someone I’ve really been looking forward to chatting with, Rick Hamrick. Rick is a seasoned investor and a master of the distressed property niche. From navigating the complexities of pre-foreclosures to turning unsellable problems into profitable assets, Rick has built a career on helping homeowners find a way out and helping investors find their next big win.

Rick, welcome to the show.

Rick (02:34)
Thank you, Scott. Thanks for having me.

Scott Bursey (02:35)
I think our audience is really going to take something away from your journey through the ups and downs of the Midwest market, specifically your ability to pivot when the economy shifts and stay ahead of the curve. Let’s dive in, shall we?

Rick (02:55)
Sounds good.

Scott Bursey (02:56)
So first off, for people who may not be familiar with your world, give us the short version. What’s your main focus these days?

Rick (03:06)
Our main focus is just that pre-foreclosure distressed assets, distressed borrowers, properties that most agents and investors think they can’t do anything with. That’s exactly what we’re looking for because we know how to solve those problems. I was taught at very early age in my career.

that if you provide solutions and you provide value, you will always be needed. So right now we’re seeing about three to five properties per week get submitted to us just in the Kansas City operation alone. So it is focused on providing solutions where others can’t and in this market and economy, we’re as busy as we can ever be.

Scott Bursey (03:48)
I can imagine you mentioned the Kansas City markets. Are you in any other markets? Could you elaborate a bit on that?

Rick (03:55)
Yes, yeah, absolutely. So just by the nature of what we do and the networking we do, because we implement what’s called the six week compounding routine, where we have this six week routine where we are literally networking with professionals and helping them understand what we do and how we do it. We’re literally working deals from Florida to Washington state and everywhere in between. We’re heavily concentrated right now in the Midwest just simply by physically being here. But we’ve got a lot of opportunities and deals

that we’re working in Florida, in Georgia, in Texas, and Colorado. Those seem to be the four other states that we’re getting hit on right now. But we have deals in Arkansas, Oklahoma, Louisiana, ⁓ Utah, we’re working a deal in right now. So it really just a matter of where the help is needed we go. We just need to make sure we have a local power team, boots on the ground that can be there and interact with the appraisers.

with the agents, with the buyers and with others because what we do from a negotiation standpoint can be done from my own home office here in Kansas City.

Scott Bursey (05:52)
Love it. That’s a broad range and the boots on the ground mentality right there in KC. That’s awesome. What caught my attention about you was the way you’ve been able to focus on pre-foreclosures and distress situations.

It’s a tough niche that requires a lot of empathy and a very specific skill set to be quite frank. And you’ve managed to turn it into a powerhouse business. What’s been the key to keeping your machine running smoothly?

Rick (06:10)
this.

Well, I would say that, I mean, I’ve heard for years. I bought my first rental property in 2016. And then of course, I got put on the wholesaler’s list in 2016 and just watched a bunch of stuff between.

2016 and 2020 and I just kind of shook my head and I’m like, what is going on here? Right? Because every investor, every wholesaler, they all say, I want to do pre-foreclosures, I want to do pre-foreclosures. But when the going get tough, that’s the first thing that they cut out. The homeowners or the borrowers that truly need a solution or the first person that they typically just crumble up the lead and throw it to the side. Right? That’s where I’m raising my hand and saying, no, no, that’s what I want. Because those are the people that truly need help.

Right. And a lot of the folks that we’re helping right now are senior citizens and then also broken families where, know, they’re the husband and wife split apart and their kids and their multiple houses, multiple utilities, multiple everything. Everything basically gets doubled for them. So to basically know how to solve those. And the biggest thing I think is is action being action oriented. The only way you’re to be able to do this business is by doing right. People talk a lot in hypotheticals. They ask a lot of hype.

hypothetical questions and we just kind of look at them and say why are you asking that? Is that a situation you’re dealing with right now? No, it’s not a situation. Then stop asking that question. Go out and shake a few more hands. Talk to some homeowners. Knock a door. Do what you need to do because honing your craft is literally the best way to be busy and active in any market or economy.

Scott Bursey (08:00)
Sure, that all ties into that boots on the ground mentality. And that’s impressive. And Rick, to be honest, what’s also impressive is that you’ve been able to reach the level of autonomy that you have. Was there a specific moment or a particular deal where you realized, okay, hey, this is actually working?

Rick (08:23)
Yeah, well it was the my very first short sale back in 2020. ⁓ I was working with my current partner in the mastermind. He was actually a mentor to me in a different legacy generational wealth mastermind.

And I thought I was going to go do my first creative, you know, sub two deal. I was going to take over a low equity or no equity home. I was going to get rid of the property mortgage insurance and I was going to turn around and sell it on a wrap. I stepped my foot indoor.

of house. I didn’t even get past the front door and I looked at the homeowner. said, Lisa, said, this is more than $5,000 worth of work. I said, this is upside down. This is short. So I came back to the mastermind and I told William, I said, I guess I’m done. I thought I was going to do something fun and cool. And that’s when he goes,

Whoa, whoa, whoa, He was, let me show you how to monetize that. Let me help you understand how you can help this homeowner. And this was a mountain. This was an FHA loan and the borrower was in

house for less than a year. It was about 11 months when she contacted me. The story is much bigger than the time that we have on this podcast, but just know that when he showed me how to flip into that solution mindset and providing something that would actually add value,

⁓ a $32,000 check later for negotiating the shorts, I was like, okay, this is, this is what I want to do, right? I want to be able to turn deals that most others can’t turn deals into money, right? Do it and,

then also, I mean, at the end of that, that deal, I mean, she, Lisa literally looked at me and was crying and thankful, thanking me profusely. I didn’t know where to go. I didn’t know what to do. I didn’t know how to do this. Most people told me they couldn’t help. So on top of making good money, it was a very good, gratifying feeling to actually be helping somebody in the process.

Scott Bursey (10:14)
What a wonderful light bulb moment. Thank you for sharing that. Now, Rick, every operator I know has a moment where things got real. Maybe a deal went sideways or a time that you had to pivot fast. You mind sharing one of those moments with us?

Rick (11:09)
Yeah, I mean, I can probably think of, you know, a half a dozen. mean, our track record is really pretty good. I mean, 90 % of the legitimate opportunities. I mean, we get thrown a lot of stuff that we have to kind of use a rubric and score and find out if the deal is real or it’s not real. If it’s real opportunity, if the homeowner, I would say that each house and each loan and everything about this person makes a unique situation. Every single deal is a unique DNA. Literally, there’s no two.

that are like for a lot of different reasons. There have been a couple of times where there were some early lessons back in 2022 and 2023 as we were getting more heavy into this where we would potentially lose something to foreclosure and not having the knowledge or the skill sets at every single turn to prevent that from happening or understanding that this is a Freddie Mac or this is a Fannie Mae or FHA or VA and they all operate

slightly different. there have been plenty of times where we’ve gotten close to the end and being able to pull them back. But there have been probably about a half a dozen in the last six years that I look at myself and kind of reflect on the fact that if I’d only known this one nuance or if I only knew how to do this or do that, we would have prevented foreclosure because at the end of the day, foreclosure should never be an option. There are literally eight options for somebody in pre foreclosure. And if they truly want a solution and they’re willing

work with you and cooperate with you, foreclosure should literally not be an option. And bankruptcy, the seventh, that should also not be an option, right? At the very least, get to that sixth option, which is a short sale, which believe it or not, as long as you know how to do it and you systematize and you have team members that know how to do it, they’re not as bad as everybody makes them out to be. And we’re recognized as national short sale experts. That’s one of the biggest

deals set that we get from others is this has no equity or low equity, huge arrears or large amounts of partial claims. So we need help on this. So a lot of moments to pivot and learn really throughout the six years that we’ve been doing this hard.

Scott Bursey (13:20)
Sure, looking back at the 2022, 2023 as you mentioned, what tripwire or system have you built specifically so that misfortune can never happen again?

Rick (13:34)
Yeah, yeah, that’s great question. Obviously, as we continue to grow, right, we saw things pick up in 2023, but still not as big as we thought we would.

The difference between 2008 and 2020 to 2026 is the system collapsed and the market failed and the government stepped in in 2008. We had this global pandemic in 2020 and before any market issues happened, the government stepped in. And so we’ve had five and a half years of government programs and kicking the can down the road and putting money into the housing market. And those things are starting to dry up. Now, we had a huge

between 2020 and June of 2022. I remember it June of 2022 is when the the feds increased the interest rate for the first time. It was that June and then we had a little mini recession June of 2022 to December of 2022. And so now the government is running out of those options and they’re finally starting to pull back and rip the band-aid off. So in 2022-2023 what we started doing was refining the systems and adding

team members. Where we couldn’t scale ourselves because we were working too close and too deep in the business, we added team members. We have five additional team members plus my partner in the Kansas City area. Now those team members have very regimented system of follow-up calls to the banks and to the institutions and they never get off the phone without asking.

is this in loss mitigation or is this in foreclosure? Two different departments at a mortgage servicer. And number two, is there a sale date? Right? As long as you’re in loss mitigation and you’re protected with no sale date, now you feel pretty good. And that happens on an almost seven to 10 day cycle. So that’s happening regularly by our team members to prevent the, ⁓ crap, know, last minute they have a sale date next week. And you’re like, how did we get there?

our team ask that question basically every week. So that is one of the biggest ways that we are preventing that from happening. We’re not getting surprised by sale dates like we did in 2020 to 2022.

Scott Bursey (16:26)
That’s awesome that you have those measures in place. And honestly, Rick, it’s what separates the folks who dabble from the ones who stay in the game long-term. Let me ask you this. What are you most focused on solving or scaling next?

Rick (16:44)
Well, it’s probably what a lot of folks are looking at. You know, I think that it’s been pretty amazing because we’re very close to the data. You know, you and I were talking a little bit about the partial claim data, right? That is where HUD steps in and bails a homeowner out on an FHA-backed loan. But it’s really surprising to most people here that 75 % of licensed agents did zero deals in 2024. 75 % of licensed agents did zero deals in 2025.

And you’re wondering how that can happen. mean, you’re losing almost a million licensed agents year after year. And what it really comes down to is they don’t have the skill set to pivot in a market in an economy like this. In a normal economy, there are a million and a half pre-foreclosures a year. That’s in a normal housing market and everything else. There are not enough people to even help the million and a half. So if you know how to do that, you’re just kind of riding through those good periods. But then when

what’s

going on is happening now, then it just goes like this. You simply ramp up and you can basically, it’s, I don’t want to use the analogy, it’s like shooting a fish in a barrel, but it is. The thing behind it is that you actually have to truly be empathetic. You have to want to provide solutions. You want to have to help people. And the reason that most people respond to our focused marketing is because it’s, hey, we want to come, we want to walk alongside you. We want to help you find all of the different options that you have.

Eventually, if it gets to a transaction, we’re here no matter what that transaction is, but the marketing that most people that are on the notice of default list or the notice of sale list are getting, or I can help you sell, I wanna buy, I wanna buy, I wanna buy. That’s the last thing a homeowner wants to hear. So we come from an empathetical, we’ll help you provide solutions and negotiate with those big bad banks and institutions because we do it every day. And so that’s the sheer difference in what we’re seeing. So there’s a lot that you can do.

Scott Bursey (18:42)
And

there is, and you hit home on a lot. And the key point there that I took away from it was being versatile in a down world ⁓ economy, perhaps, a downward market. Being versatile is huge. Rick, what’s the next real goal for you?

Rick (19:03)
The next real goal, and we also talked a little bit about that, is to get myself out of the business more.

And when I say that, there are so many things that we have with the team members, with the software technologies that we’re putting into place. Of course, the AI that we’re putting into place that really helps scale and replicate us and allow us to get, because in pre-foreclosure, especially when we’re working a short sale, there are so many complex decision points that are involved in so many complex documents from the actual as is, know, BPO or valuation.

or the appraisal, the title commitments, the approval letters and everything that come with it, that it takes a very high level skill set to understand how to unwrap and how to unwind and actually apply a solution that works. Well, we’re training the team to not just be ⁓ task oriented. I just check a box and follow an SOP. Our team is literally becoming knowledge workers. And then we can supplement that with the decision points and the art.

intelligence to really kind of remove ourselves from the business and that’s only because we want to be able to take our time and help more people and focus in other areas and focus on the complex deals and let the team run like a machine on 80 % of the other deals.

Scott Bursey (20:28)
Great roadmap there. A lot of people in the industry treat the door count or revenue like the final scoreboard. For you, is hitting those numbers the win itself or is it just the capital you need to stay in a much bigger game?

Rick (20:37)
Yeah.

No.

Yeah, this is this was probably the most entertaining thing that I’ve heard over the last 10 years. mean, literally since I bought my first rental property in 2016 to now is, we do 100 doors, we do 1000 doors. I have five doors. I have 10 doors. have this. And to me, I am I am much more about the life by design. Another reason that I want to get down to 20 percent of the time we choose to focus on the front end of the process, the notice of default. We do not focus on the notice of sale because the

Notice of default is the first legal action and that gives us more time for solutions. But also if it is a no equity or low equity situation, we’ve got more than 37 days, right? So it is literally, I am working with banks and institutions and when they’re closed on nights and weekends, we’re closed. When they’re off on holidays, we don’t have to work. We choose to work a lot of those holidays, but we don’t have to work those holidays. So it’s more for me about the life by design. And when I say that, it is literally the quality over the

If I did a thousand, let’s just take that short sale I was talking about. If I did a thousand of those deals at a $32,000 profit, that is a much better number than, hey, I did a thousand wholesale transactions this year. My question always when somebody tells me I did 150 houses this year, what was your profit margin? $1,000?

That is terrible, right? So there is, there’s two levers that we work in on our business, especially coming into 2026, right? Was getting the actual deal, average deal size and volume up, right? We’re working on increasing that by 25%. I don’t have to do any more deals to actually make more money if I’m making each of those deals valuable. So it is quality over quantity.

truly providing a solution and also not running around like a chicken with your head cut off. Why do I want to do a thousand deals at a thousand dollars per deal profit when I can do 10 at the $32,000?

Scott Bursey (22:51)
message well taken and I’m with you on that. That’s big. You know, now your next move can either compound things or perhaps even create chaos depending on how you play it. Now I know a lot of our audience, Rick, is either earlier in their journey or looking to level up in some fashion and I think they’d benefit from hearing this.

When it comes to building relationships and drawing your network, what’s made the biggest difference for you?

Rick (23:24)
Right? think literally providing value.

If you stop and you think about the fact, I mean, there are so many people that reach out to me. I’ve seen it in the industry and a lot. Hey, I, know, hey, can I pick your brain? Can I meet with you? Can I go to lunch with you? And you’re like, why? Right? I’m busy enough as it is right now. Why am I going to go spend two hours? Like, so whenever you’re reaching out to an operator that is doing the business and doing it on a regular basis, make sure that you’re providing value back. Because if I took the time to meet with anybody that asked to meet with me and all the time, ⁓

I

would literally be, you know, doing that networking 40, 50, 60, 80 hours a week and not have time to help the homeowner that I’m trying to help. I very rarely answer my phone direct when our partners in our network, the agents, the investors and others that are working with us, they’re coming in through our CRM and the team can respond and the team can answer and the team can bubble it up to me. So when you are asking for that time, make sure you are providing value in return.

Scott Bursey (24:27)
Otherwise you’d be running around with your chicken with their head cut off like you alluded to and that’s one thing that you’re avoiding. Very good point. Everyone says provide value but when you were starting out and you didn’t have a huge bank account or a massive portfolio, what was your currency? How did you actually get the attention of the heavy hitters?

Rick (24:55)
Right.

Yeah, I think the biggest thing and this is probably kind of really goes back to my partner in the mastermind, right? In 2020, the way he looks at and say, I’m a huge fan of masterminds because I believe they you get out of them what you put into them. There are some it is the 80-20 rule where 80 percent of people show up and do nothing. They chase the shiny object. I’m a short sell investor this week. I’m a short term rental investor this week. I’m a pad split investor this week. I’m a sub two investor this week.

You have to actually hone your craft and be good at one thing before you’ve earned the right to move on to the next. And what William literally recognized and the reason he’s my business partner today is because I asked actionable questions, not hypothetical. We’re not fans of hypothetical questions as we say, if you haven’t come across a situation, don’t even ask that person that question, right? I want real questions based on what you’re doing. And then I actually took action and did exactly

exactly

what I was being told to do feedback wise and you start to see the actual success happen and that was one of the biggest things was back in 2020 literally, you know, he looked at me and said you’re literally like my best student. You did exactly what I told you to do. There were no questions. There were no I’m not gonna do this and then you actually take time. So there’s the reason I don’t like to just hop on the phone for an hour goes but spend two hours that lunch with somebody is because

80 % of the people that you talk to shake your hand and say thank you and never do anything with that information again.

Scott Bursey (26:34)
A true student of the game. Awesome. And that’s something you can’t fake. Relationships are everything in this space. And I think a lot of people underestimate the compound interest of a good relationship, You know, one solid connection today might not pay off for three years, but when it does, it usually is the biggest win of your career. All right, before we wrap.

Rick (27:00)
That’s right.

Scott Bursey (27:03)
If someone wanted to reach out, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way for them to contact you?

Rick (27:12)
Right. Yeah. I mean, you could, can hit me up at Rick at K C E R E C.

Right. That last part is expert real estate consultants. So KC that actually stands for the Keystone Collective, but we’re also based out of Kansas City. So there’s kind of a double meaning to all that. So KC, E R E C, you can come to IPA for REI.com. You can find me on LinkedIn. You can find me. very active on, on LinkedIn and Facebook and everything else. So it’s pretty easy to get in contact with me, especially ⁓ if you’re, you’re an action taker and you’re shaking and you’re moving and you’re doing

I

mean I work a ton with licensed agents and brokers, but also with a bunch of investors around the country. So don’t hesitate to reach out. I love to share. I love to teach. And again, to those that are willing to take action and not ask hypothetical questions, they’re gonna do because there needs to be more of us. Again, a million and a half pre-foreclosures in a normal year and there’s not enough people to help. Right now we’re way over 4 million and that number has grown.

There’s just not enough people to help. I am an abundance mentality. I don’t hold anything back. I share. So I’m happy to interact with anybody as they reach out.

Scott Bursey (28:29)
That’s clearly evident. Perfect. Well, listen, I appreciate your time, your story, and your perspective. We need more people in this space who are doing it the right way, Rick. Thanks again for being here.

Rick (28:38)
Thank you.

Right, right.

Thanks, Scott. Appreciate you having me.

Scott Bursey (28:46)
And for those who are tuning in, if you got value from this, make sure you’re subscribed. We’ve got more conversations coming up with operators just like Rick, who are out there building real businesses. We’ll see you in the next episode, everybody.