The Foreclosures Are Coming: Here’s How To Prepare
There are likely to be many more distressed properties ready to buy very soon. How do you make sure that you are ready to fully capitalize on this opportunity as a real estate investor?
Distress And Defaults Are Mounting
The latest bank and mortgage debt data released by DistressedPro shows that mortgage loan performance reversed trend in the last three months of last year.
Defaults and nonperforming loans are on the rise again. This appears widespread, across almost all sectors. Including commercial mortgage loans, residential home loans, and even multifamily mortgages. The only exception which seems to remain healthy is in farmland and agricultural loans.
Many of the improvements of the past two years have been erased. With many newly defaulting loans, as well as those now being deemed non accrual stage loans by banks.
Although REOs haven’t piled up yet, it is an important metric to watch in terms of overall bank and market health.
Defaults on auto loans and consumer credit card debts have also hit a new high, signaling many mortgage borrowers are barely hanging on. With more likely to fall late on their home loans and who will need to sell their homes.
So, how do you prepare to capitalize on this moment as an investor?
Have Your Funds Ready
There are going to be a lot more distressed properties and motivated sellers to buy from soon. Don’t get caught short, and beat out to the best deals because you aren’t ready to move fast with your offers and closings.
Pool your capital together now. Get your POF (Proof Of Funds) from your lender, and be ready to make fast cash offers.
Have A Strong Team
Those with the strongest teams will win. Find the best talent, and when you’ve got them, don’t let them go.
Get familiar with working in a remote environment if you haven’t already. Ask around for referrals if you can. Unfortunately, platforms like Upwork which used to be good have now stripped away all of their customer support and have been burning their best talent. While scammers like Amurra Spices, and their fake Airbnb have taken over and aren’t paying freelancers for their work. As a result you may now find the best outsourced help freelancing for themselves.
Have Your Marketing Prepped In Advance
You should have your marketing mapped out and materials created weeks in advance to avoid rushing out junk. If you need to have a new marketing strategy plan created for this new phase of the market.
Focus On Providing Solutions
Focus less on price, and more on finding opportunities, and solving the problem and needs. This applies to both your sellers and end buyers. Focus on what’s most important to them.