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The Foreclosures Are Coming: Here’s How To Prepare

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on Wednesday, 08 February 2023
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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.


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Distressed Real Estate And Losses Mount As Investors Wait For Good Deals

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on Thursday, 05 January 2023
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Distressed properties and discounts finally seem to be appearing for investors who have been waiting for better value opportunities.


Investors are still hungry for deals. In fact, the volatility in the stock market will probably bring a lot more capital in search of real estate for safety and income soon.


While not every seller is motivated or in enough of a crunch yet, many are willing to sell at discounts for cash. Real estate wholesalers who get out ahead of the pack will begin to find more deals to fill their pipelines with.


Bill Gates Takes A Loss In NYC

Bill Gates recently listed his daughter’s Fifth Ave. condo in NYC at a quarter of a million dollars less than he paid for it. With many properties now selling for under list price he might take an even deeper loss than that.


If titans like these are that motivated to sell, there are going to be many others too.


Twitter Defaults On HQ Rent

$40B tech company Twitter is being sued for failing to make its rent on its headquarters in San Francisco. That’s after shutting down offices in Seattle.


Amazon has also had to lay off 18,000 workers already this year, and try to sublease warehouse space it recently built after a lack of demand.


Not only will this yield more commercial real estate deals, but plenty of residential properties as tens of thousands of tech workers face unemployment and need to structure their housing expenses.


IRA Balances Nose Dive

According to Fidelity, IRA balances dropped by 25% year over year to November. Similar losses were seen in 401ks. Given the bearish outlook on the economy, expect those losses to compound and snowball in the first half of 2023.


Many individuals may cash out these accounts to put their money somewhere safer like real estate.


Make Offers: There Are Discounts To Be Had

This is a great time to be out there making offers on residential and commercial real estate. Even if owners are not motivated enough to give you the discounts you want now, keep the lines of communication open for later, when they absolutely must sell. You will build up a big pipeline for the rest of the year.


Price Your Deals Right

On the flip side, make sure you are pricing your resales with room on the table for buyers. Everyone wants a deal right now.

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New Epidemic Of Zombie Foreclosures Spreads Across America

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on Thursday, 03 September 2020
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The number of zombie foreclosures is surging in every state in the US according to the latest data. What does it mean for real estate investors?


Almost 8,000 zombie foreclosures are in process in the third quarter of 2020 according to ATTOM Data. Almost a quarter million properties were in the foreclosure process as of August.


These numbers may still seem small compared to 2008. Yet, there may be a lot more happening below the surface.


New Zombie Foreclosures

Zombie foreclosures are homes which have been abandoned by owners and borrowers. They’ve walked away, but the bank hasn’t foreclosed and relisted them yet. They are kind of in limbo. The owner gave up and left it vacant, but the bank isn’t selling it yet. This can lead to a lot of cosmetic issues from overgrown landscaping to vandalism. They can have a negative impact on the community and neighborhood, and cost cities and counties money to maintain.


What’s Coming Next

Unless the national economy pulls off a great turnaround in the next few months it is likely this metric will increase.


It is estimated that around 30% of US households aren’t able to make their monthly housing payments. While many are acting like it is business and shopping as usual, rumors are that there are a large number of auto loan repos happening, and credit card issuers like Capital One are reportedly slashing credit lines.


If things do play out like 2008, expect a huge number of foreclosures, even if governments and lenders carefully throttle how fast they hit the market.


There is a good chance that new businesses which are booming in the new normal and the next election will put the economy on a great trajectory. Though that may be a little too late for owners trying to make ends meet in the meantime, between loss of income in 2020 and new help coming in.


What It Means For Investors

The market may now seem hot and competitive in some places and for certain residential property types. Home sales and even prices just seem to keep marching up. This is the perfect market for real estate wholesalers to acquire distressed properties and sell fast for great margins.


Even if foreclosures do kick into high gear, it is good to remember that those who made it through the last crisis, and actually saw their incomes and wealth soar, were those who invested through it, wholesaling properties.


Don’t miss out on this once in a decade opportunity to rocket your finances for the better!

 

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Use Transactional Funding To Do More Real Estate Deals

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on Thursday, 27 October 2016
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Want to do more real estate deals?

Who doesn’t right? For many investors transactional funding may be the key to doing more deals. We’re not just talking about boosting your deal volume over the next 12 months, but turning all those leads in your database and on your desk into deals this month.

There is a lot of noise out there in the mortgage lending space right now. Unfortunately, a lot of it just leads to dead ends, dead deals, wasted time, and frustration for real estate investors. So how can Best Transaction Funding Help?

Get Bigger Deals Done

Transactional funding can be ideal for getting those bigger deals done. Perhaps you are wary of taking on a big mortgage or rehab project, but the numbers on the deal work. Transactional funding can be used as ‘dough for a day’ to lock that property down and flip it fast. There are still lots of cheap properties out there, but would you rather make 50% profit on a $40k home or a $4M home?

Get Distressed Properties Financed

There are tens of thousands of distressed properties out there ripe for the flipping. Of course, many of them simply can’t be financed by traditional channels. This can be due to simple issues with missing appliances, worn roofs, old termite damage, or it could be critical fire or hurricane damage, foundation issues, or complete teardowns. Don’t leave these deals for the next guy. You’ll be kicking yourself when another investor makes a mint on them. You don’t have to do the repair work, or put up the cash to fix them. Transactional funding will let you flip them fast to rehabbers or cash buyers, and make a nice profit in the process.

Overcome Liquidity Challenges

It always seems like the best deals come along right when all of your cash is tied up in another deal, right? Don’t let that stop you. Best Transaction Funding offers up to 100% financing, including closing costs. This means you can keep marketing, churning out those deals, and bring in the profits.

No Limit Lending

Too many other lenders still have antiquated limits on the number of loans or dollars you can have out there on credit. At Best Transaction Funding it doesn’t matter. The more deals you’ve got the better.

 

Authored by Best Transaction Funding - the leading source of transactional funding for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

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Unlock Value & Big Real Estate Wholesaling Profits With This Niche

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on Thursday, 16 July 2015
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Looking for better spreads on real estate deals in great property markets?

This niche offers one of the biggest opportunities for real estate investors, the chance to find fatter spreads, and often with less competition, even in hot CA, FL, and NY markets…

Construction REOs

Construction REOs have continued to be one of the biggest pools of distressed properties in the USA. In fact; the opportunity has dwarfed most of the other types of REOs, put together.

These properties had construction and rehab loans taken out on them, which then defaulted. These properties range from half-finished single family homes to massive luxury branded condo conversion projects, to older homes on lots small home builders planned to redevelop, to small multifamily properties with permit issues. And often these properties are now in the optimal zone for big profits from wholesaling houses.

Why Flip These Properties?

The size of the opportunity is huge. Literally Trump sized. Billions of dollars’ worth of properties are in these pools. That’s great for real estate wholesalers looking to scale their business and incomes over the next few years.

The discounts are just as big. This can be a gold mine and life saver for those investors that are in hot markets and have been finding sourcing profitable deals tough. This is because most newbie real estate investors are afraid of taking them on, or simply are not aware of them as an option. It can seem daunting to finish a job that requires working with permits, or doing some structural improvements. But it doesn’t have to be. Those that do their due diligence upfront, and get quotes from contracts might find it easier to turn many of these eye sores into brand new homes that can achieve premium prices. And the best news is that as a wholesaler you really don’t have to get into any of that hard work. Just match them to the investors that are eager for them.

This is also one of the best ways for real estate investors to bring true value to their markets. When these lagging properties are recycled it helps bring up the whole neighborhood. It increases appeal, values, and safety.

How to Take them Down

Perhaps the real reason more property investors don’t take on these units is financing. Most regular bank mortgage loans aren’t a fit. But there are rehab loans end investors can use if they don’t have the cash. For real estate wholesalers there is private money, hard money loans, and transactional funding to leverage and flip with ease, for big digits.

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

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Over 10 Million Distressed US Homes Ripe For Real Estate Investors

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on Thursday, 18 June 2015
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New data reveals more than 10 million distressed homes that could be ripe for US real estate investors…

Even though some real estate investors say they have been feeling the pinch from fast rising property prices and a lack of inventory, there are many more distressed properties out there than many can fathom.

While US home equity has been racking up hundreds of billions of dollars in positive gains many US homes are still deep in distress. According to National Mortgage News there were around 5 million underwater homes in America in mid-June 2015. But that’s only a small part of the story. CoreLogic data shows 85% of homes under $200,000 are still underwater!

Think that’s a bigger number? Then add another 20% of mortgaged US homes, or just shy of 10 million homes that have less than 20% equity. These represent homeowners that are also in a tight spot. Between Realtor commissions, taxes, closing costs, pre-payment penalties, back interest and fees, HOA and condo dues, code enforcement violations, property taxes, and marketing expenses most of this group may not be able to sell conventionally either.

Want MORE deals? Check out the 50% to 74% rise in bank owned REOs revealed in this real estate blog post. Then ice that with fresh new residential and commercial mortgage delinquencies. And then there are all the properties that are not mortgaged, but are in distress due to property condition, divorce, past due taxes, and more. 10 million is just a small piece of the pie.

US banks just got slammed with new regulations in June 2015 too. Some of the biggest have finally found that skirting their obligations to help homeowners, grant short sales, and approve real loan modifications has caught up with them. In some cases this means they are banned from increasing their mortgage loan portfolio size. That means they have to shift bad loans and old loans off their books in order to make new ones and make more money. That’s a whole new world of motivation for banks to help investors buy these properties.

There may be some negotiating, and creative deal structuring and financing to be done, but it’s unlikely we’ve seen opportunity this big for US real estate investing since the days of the pioneers heading west.

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

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Bank REOs Surge 50% in 2015

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on Wednesday, 03 June 2015
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Distressed property opportunities are surging in 2015. So where are they, and who’s buying?

While some newbie real estate investors that have gotten into the industry since 2008 have been griping about a lack of deals, the data shows there are even more distressed properties coming up for sale. In fact; according to the stats there are twice as many.

Rocketing REOs

While some appear to have forgotten there was a foreclosure crisis RealtyTrac reports that bank owned properties leapt up 50% year over year to April 2015. There are a lot more distressed properties in the works too. RealtyTrac reports an almost equivalent number of pre-foreclosures and auction properties too. The Mortgage Bankers Association reporting commercial and multifamily delinquency rates reveals that the number of Fannie Mae loans that were 60+ days delinquent almost doubled in Q1 2015 as well. Many of these are properties which aren’t even included in foreclosure figures yet.

California Foreclosures and Fast Growing Markets

It’s no secret that California has been one of the fastest rebounding housing markets in America. In fact, it dominates Realtor.com’s recent list of the hottest US real estate markets; claiming 10 of 20 places. Yet, even in CA where property prices are up, and days on market are shrinking RealtyTrac says bank owned REOs have climbed even higher; by 74%.

Demand is up too. Online listing portal Realtor.com says visitor numbers have doubled in 2015. So more distressed properties are coming down the pipe. But there are plenty of buyers eagerly looking to snap them up. These are perfect conditions for real estate wholesalers that can virtually flip an unlimited number of house deals using transactional funding.

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

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How To Land More Wholesale House Deals [Overcoming Sales Aversion]

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on Thursday, 11 December 2014
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How can real estate wholesalers help homeowners overcome sales aversion to land more deals?


There are still over 200 billion dollars in defaulted loans and REOs at banks in America. This doesn’t even take into account all of the other foreclosures pending due to delinquent property taxes and HOA dues, nor all the motivated home sellers that need to sell their houses fast for other reasons.


The bottom line is that there are plenty of distressed properties, and potential for scoring deep discounts on homes that are ripe for wholesaling. There are many sources of these properties. Going direct to homeowners is still one of the favorites for the ability to cut out other costs and difficult to work with parties. However, despite the urgent need for many of these property owners to sell, and do it fast, and the valuable service that real estate wholesalers can deliver, there can still be a disconnect that prevents owners from taking advantage of the help.


Often this comes down to Sales Aversion. There are times when consumers want to be sold, for example when they really want to justify an expenditure to buy a luxury item. However, in general most of the population has come to avoid being put into positions where they are to be in high pressure sales pitches. They’ve learnt the hard way after falling for timeshare offers, being strong armed into overpaying for gym initiation fees, friends hosting parties with MLM motives, and even just being lured into giving up email addresses, only to be hounded with never-ending spam.


Consumers don’t want to be cornered into uncomfortable and abrasive sales pitches. They definitely don’t see why they should spend in order to be put in these positions either. Why should they take time off work, and drive miles to a used car dealer that refuses to give any upfront information? Why take the day off of income producing work, and endure a day of family stress to accommodate a property showing to a wholesaler who is vague, won’t provide detailed information upfront, and is expected to try and hard-sell them on committing to selling their home for pennies on the dollar?


This pain can be worse than just sticking with the status quo, even if they are in a tough spot. Sales 101 says that in order to make a deal prospects need to be shown a path out of their current pain toward pleasure.


Many of today’s wholesalers don’t realize that they aren’t accomplishing this.


Yes, property owners might be in distress. Yes, the best move for them may be to sell. It may even make sense for them to sell at serious discounts and just get out of the debt and walkaway. Wholesalers armed with transactional funding which can free homeowners, and even put cash in their hands may be their best option. But, in order to truly effectively convey that and make the process palatable and appealing can take a little more effort than some appear to be making.


So how can real estate wholesalers overcome sales aversion and close more house deals?


There are many ways to connect with motivated sellers. However, it really all boils down to two marketing strategies:


Notification Marketing

Word of Mouth Referrals


There is absolutely a need for Notification Marketing for new wholesalers. They need to get the word out about their services and product. This can include direct mail, social media advertising, Google Adwords, press releases, and email marketing. It can also include inbound marketing via articles and real estate blogs designed to help prospects in discovering solutions and meeting needs on demand.


Word of mouth marketing has evolved significantly too. The original form still applies, but this has also morphed into using affiliate marketers, social media, sponsorship, and strategic referral partnerships.


Whichever real estate marketing strategies are being used, one principle applies to making them effective for landing more real contracts today.


Doing business with wholesalers, and even just contacting them, and agreeing to meet them requires making it easy and attractive to do so. It has to offer the promise of more pleasure, while diminishing their current pains.


There are two critical parts to this. The first is overcoming objections in advance. This involves education, defining expectations, transparency, and clarity. This can be done upfront online, on real estate wholesaling websites, and in initial interactions.


The second part, which builds on the first is making it appealing to pick up the phone and call you, give up an email address, fill out a form, or arrange a showing. The anticipated experience should be appealing, not simply the homeowner opening themselves up to a high-pressure, hard sales pitch.


Define the process upfront, and offer a win-win for them for taking the action you desire, even if the two of you don’t wind up making a deal on this transaction. Cut the mystery, increase the clarity. This will boost your reputation, and the eagerness to share you by others.

 

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Only 6% Of Wholesalers Impacted By Storms May Survive 2014 [How To Be One Of Them]

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on Thursday, 13 February 2014
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Severe snow and ice storms slamming the U.S. threaten to knock many real estate businesses out of the game this year. While this might seem like a welcome reprieve for real estate wholesalers that have seen competition spiking in their areas, not being added to the casualty list is going to require some quick reshuffling for many.

Fueled by a plethora of distressed properties, rapidly rebounding house prices and easy access to cash via transactional funding many wholesalers have found deal flow surging recently. However, just weeks into 2014 and with major storms already battering the south and east even before hurricane sets in and it’s clear wholesalers need to keep an eye on the weather and have the business models that can stand up.

Few do.

According to a new infographic from SingleHop:

  • 93% of businesses that have data centers go down for more than 10 days will go bankrupt in less than 1 year
  • 43% that close in a disaster in a disaster will never open again
  • Just 6% of those without a plan for these circumstances will survive long term
  • Weather is responsible for 30% of business downtime
  • Given the array of weather and natural and ma-made disaster threats today it’s not a question of if your wholesaling business will be impacted, but when

Magazine for entrepreneurs G-Code offers 7 tips for navigating and defending against issues like the severe weather and ice storms hitting the U.S:

1. 1. Develop an emergency plan in advance
2. Outsource so all staff are not in one location
3. Diversify business in different real estate markets
4. Have alternate lines of communication
5. Automate business as much as possible so that it can keep running if you aren’t
6. Have cash on hand incase banking is disrupted
7. Have back up staff ready to pick up slack

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5 Factors Affecting Your Success in 2013 & How to Dominate Them

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on Friday, 21 December 2012
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Are you on top of the 5 factors which are going to determine your level of success in real estate investing in 2013?

These 5 elements are what will control the game in the next 12 months, and if you are on top of your game you can crush it and dominate…

1. The Rebound

The U.S. housing market has come a long way in 2012 and is expected to post even better improvements in 2013. We might not be rolling from recovery to boom just yet. It is still an uneven recovery with even the best performing markets having another 30% to go up before hitting the baseline to launch another boom era.

Still, it is time to be aggressive and confident. Don’t speculate but do make big moves based on facts and cycles so that you control the largest percentage of market share you can.

2. Marketing Trends

We’ve all heard and are pretty well aware that mobile marketing is the hot ticket for real estate from here on out.

However, new tests launched by Facebook this week which aim to charge marketers $1 per message sent to anyone outside of an investor’s direct network put another nail in the social networks’ coffin and perhaps Silicon Valley’s startup nation, even if they don’t realize it yet.

So stay on your tech game but don’t count on social platforms for free marketing in 2013.

3. Foreclosures Move into Overdrive

Foreclosure sales are already speeding up in many hot areas on higher profits and prices being achieved by lenders. Expect this to continue during the next 12 months.

Don’t worry there are plenty of distressed properties to be had for the flipping too. It was just revealed that Bank of America alone is holding $64 billion in mortgages which are more than 6 months delinquent and haven’t even received a foreclosure notice yet. That puts far more distressed property out there than any private equity fund or even billionaire Carlos Slim can take down.

However, investors who want to be first in line to get the sweetest discounts on these deals need to be more innovative. Think pooling funds to buy in bulk, taking down properties as non-performing mortgage notes and checking out credit unions and asset managers as sources instead of banks.

4. Foreign Buyer Surge

While foreign buyers and investors have been a sizable force in the real estate market for the last few years we have just had a glimpse of the tip of the iceberg of what is to come in 2013.

The death of old havens like western European capitals, central London, Hong Kong and Canada has placed the U.S. as the top destination for global real estate investment in 2013.

These buyers want protection for wealth but most of all they crave high yields and regular income.

5. Mortgages

Mortgages will sadly remain the missing part of the real estate recovery puzzle for most during 2013. Lenders want to loan and hope to lend more but they are also afraid and hampered by regulations.

So get your transactional funding here for fuel all of your acquisitions and flips and get your deals in front of qualified cash buyers and REITs to smoke the competition and reel in huge revenues in the New Year!
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