Falling Credit Scores And A Squatting Epidemic

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on Friday, 22 March 2024
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For the first time in years US credit scores are falling. Along with that there appears to be a tsunami of new squatting incidents across the country. Both are situations where real estate wholesalers can offer valuable help, and find more deals.


Declining Credit Scores

FICO’s latest report shows American credit scores have begun declining for the first time in a decade. Since right before the last financial crisis.


Consumers have tapped out savings, and have increasingly tapped out credit cards, which they’ve now been defaulting on at record dollar amounts. Along with auto loans. We are also seeing foreclosures surge as a result according to ATTOM Data.


When consumers max out their credit balances, their credit lines get cut, and their costs go up, like car insurance and interest rates on other debt. That’s an expensive snowball that just takes them down, and just keeps fueling their financial distress.


Squatting On The Rise

Every day it seems the news headlines feature a new squatting incident. Again, another issue that doesn’t appear to have been this wide spread for a decade.


Squatters are getting smarter, and they can be expensive to get out. It can take months. One homeowner even just went to jail for protesting in front of his own home that a squatter took over.


This is only likely to escalate as credit scores fall and foreclosures rise. More people will be left with no choice but to try and squat somewhere. Especially as homelessness is increasingly being criminalized across the US. As more homes go vacant through foreclosures and are abandoned, there will be more places for squatters to pick from.

 

Creating Solutions

Real estate wholesalers can help both homeowners and rental property owners as their credit begins to slide. Find signals of these credit and cash crunch issues, and make offers early in the default process, when there is more equity.


If they have squatters, you can hire a great lawyer, or find other creative and legal ways to convince them to leave. In the process you can create a lot of value between the time you go to contract to purchase, and then wholesale the property to another buyer. Those who begin specializing in buying squatter properties may find they strike gold in a growing niche.

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Foreclosures Are Surging Again

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on Sunday, 17 March 2024
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The latest data shows foreclosures are surging again this year. So, where are the deals?


Real estate investors have been waiting for this dip for a long time. After hitting the worst housing affordability since the 1980s, better priced deals now appear to be becoming more plentiful as defaults pick up.


Foreclosure Activity Rises

According to the latest figures from ATTOM Data, foreclosures rose 8% year of year as of February 2024.


Last month over 32,000 housing units received foreclosure filings, auction notices, or were repossessed by banks.


Foreclosure activity rose the most in these states:


SC up 51%

MO up 50%

PA up 46%

TX up 7%

It’s A Trend, Not A Blip

Until the dynamics driving this activity are reversed substantially, it seems likely we’ll continue to see this trend grow.


Consider that the salary needed to afford a home has soared by 61% in just the past four years.


Inflation in food prices has spiked again in 2024. Along with insurance costs, property taxes, and other expenses. That is being fueled by high interest rates. With no expectations of the Fed cutting key rates this year. Mortgage rates recently topped 8%.


While there are still many cash rich home buyers and investors eagerly looking for deals, there are clearly millions of US households on the brink of foreclosure again.


Making Sense Of The Market

It is true that all real estate is local. At least to a certain extent. Some are leaders and others laggards in the overall cycle. Some are more noticeably and dramatically affected than others.


It is also true that many will let their own motivations and interests cause them to mislead consumers about the state of their local markets.


We are by no means in the heart of a new foreclosure crisis yet. Though it makes sense to do your own research. Track local listing and sales activity for yourself. Is there really too little inventory? Or perhaps too much? How many days are properties really on the market? How many listings are cutting prices? What is the difference between distressed sales prices and others?

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Does Your Real Estate Business Have Enough ‘Elevators’?

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on Friday, 08 March 2024
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Have you ever stayed at a hotel that doesn’t have a good elevator experience?


If you have a 400 room hotel, resort, and conference center, and just two working elevators that fit 5 customers, it’s not going to be a good experience.


Your customers will be upset and frustrated. Even if everything else is 5 star worthy. In turn, they will upset your staff. Who will then disappoint you, or leave you scrambling for replacements.


If you’ve ever suffered through an experience like this, there are many literal and metaphorical takeaways for many parts of your real estate investment business and portfolio.


Short Term Thinking = Short Success

Do you only want short term success?


The above is the perfect example of short term thinking that not only makes for a frustrating business that isn’t fun to operate, but which fails soon too. At best it means limping along with thin profit margins until a smarter competitor takes you out of the game.


The elevator example applies to all of your real estate marketing and deal making processes.


You can blast out a million marketing pieces or pile up 1,000 units in your inventory, but if you don’t have the capacity to efficiently handle those leads and deals, most of them will be wasted, along with your company’s reputation.


Are The Stairs Where They Should Be?

If the technology (elevators and automation) aren’t working, then customers will run to the stairs right? Especially in an emergency situation. Well, imagine the stairs aren’t there right next to the elevator, at the end of the hall, with a sign, just as you expect.


In a fire, or business emergency, that would be a literal death trap.


Believe it or not, there is at least one hotel that has made this mistake. Many more real estate businesses are making it by not thinking through acquisitions, or by failing to have phone or human support as a back up when their new technology fails. Which is happening more often than ever as companies try to jump on the automation and AI bandwagon.


In the automotive business this has become so bad, that new regulations are coming to require old school, manual controls, rather than just touchscreens for everything.


Whether you are wholesaling houses, office buildings, or hotels, make sure your business has enough elevators, and it's obvious where the stairs are.

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Fed Not Cutting Interest Rates In 2024 Afterall

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on Friday, 01 March 2024
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After a brief glimmer of hope in the headlines, it turns out the Fed is deciding not to cut interest rates this year. What does it mean for real estate investors?


Hopes Of A 2024 Fed Interest Rate Cut Flop

While the hype around potential rate cuts certainly likely helped boost stock prices and spending for a few weeks, it seems that relief isn’t coming after all.


According to Bloomberg, the Fed now does not foresee cutting rates at all this year.


How is this likely to impact the market?


More Inflation

Higher costs of borrowing result in higher consumer prices. Even though it is claimed that high rates are used to battle inflation, we continue to see the opposite at checkouts online and at the store.


On the upside for real estate investors, this could also help to continue to support a rise in retail home prices and rents in some areas.


More Distress

Recent rate hikes have also coincided with increasing financial distress.


We’ve now got record volumes of nonperforming consumer debt in several categories, as well as ongoing defaults on mortgages, to the tune of billions of dollars.


With the news the NYCB is replacing its CEO and allocating more cash to cover loan defaults, this finally appears to be hitting the banks as well.


Motivated sellers of all sizes and types out there. From regular homeowners to big corporations, to financial institutions.


It’s a great time to be wholesaling real estate. While there are now countless ads and websites offering fast cash offers for homes, you can stand out by taking the time to understand the seller’s unique situation and triggers. Find out what’s most important to them, and not. That may or may not be price, closing date, and term. Then formulate the most attractive offers.


Funding Your Deals

A new report shows that it has not been this hard to get a car loan since the midst of covid. With banks holding money to cover loan losses, expect mortgages to also become harder to get.


Fortunately, whether you are just looking for the funds to get started in real estate, want to lower your risk, or expand faster with more capital, transactional funding is still available, and at great rates.

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Real Estate News: 4 Headlines To Watch Now

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on Friday, 23 February 2024
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Find out what’s happening in real estate and the economy that could impact your investment strategy, plans, and performance this year…


No Fed Interest Rate Cut Till June

Experts are now pushing back their forecast of a Fed rate cut until at least June this year. That’s not welcome news to millions who were hoping for a break from rampant inflation and high borrowing costs.


Though we could get a well timed rate cut or two before the presidential election.


For now investors need to make their plans based on where rates are at, with a cushion for even higher mortgage and loan rates as banks seek to offset risk and defaults.


The $400M Trump Fine, And The End Of NY

Former president Trump has just been hit with an almost $400M fine in NY, for boasting his properties were worth more than what the judge thinks they are worth.


This ruling has faced harsh criticism from the likes of Shark Tank investors and fund managers. This may be the final straw that has the last remaining investors pull out of NY for good.


It’s a reminder that values are always influx, they are just an opinion, and that opinion can be changed at any time.


It’s a fresh warning of what happened to many investors in the last great recession when banks began slashing credit lines and trying to force homeowners to accelerate the pay back of loans due to revised valuations.


Calls For $50 An Hour Minimum Wage

Forget $15 or $35 an hour. New calls are being made for a $50 an hour minimum wage. That’s about $100k a year. Which may really just be getting by for many households with kids these days.


In turn, it would either mean doubling or tripling inflation on goods and services to keep up with the wage increase, or companies having to lay off another 30% to 60% of their staff.


For real estate companies, it likely means consolidating with fewer team members, but of higher quality, and at higher wages.


The AT&T Outage

AT&T’s massive nationwide service outage is a fresh reminder to investors, entrepreneurs, and businesses that they cannot rely on just one connection.


For both phone service and internet, you need at least one additional back up, and remote alternatives on different providers so that you never get disconnected. You can imagine the havoc this can wreak with closings and deal flow.


These occurrences may become even more common has cyber attacks and online crime grow.

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Inflation Is The Biggest Factor Influencing Real Estate This Year

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Inflation only seems to be warming up this year. Expect it to be the main factor driving all trends in the real estate space throughout 2024.


Real Inflation Could Be About To Soar


In contrast to official numbers in the headlines, real inflation is what consumers experience on a daily basis.


This inflation certainly doesn’t appear to have reversed course yet. In fact, the last couple of years may have just been setting the launchpad for what’s to come this year.


There are many things that have happened and are influx, which could be used as reasons to raise consumer prices this year. Everything from new regulations and taxes, to foreign wars, and supply chain issues.


Grocery and household goods prices are still extremely high compared to a couple of years ago. Consider the controversial new $18 Big Mac meal deal at McDonalds. With some of their meals now over $21. That’s for ‘cheap’ unhealthy fast food. That’s almost $100 to feed a family of four, just one meal a day.


Other basic living costs are going up too. Especially for property owners. Several Florida insurance companies just applied to be able to raise their rates by 50% this year. That’s going to make the last few years of 30% inflation look cheap.


It’s so bad, one major new story in the New York Post focused on how you can recycle and use your own poop to heat your home, cook, and grow your own food.


Distressed Real Estate Deals


Inflation is to the point where many households are now having to stop paying their bills in order to feed their families.


Food insecurity is at new highs. Just as are defaults on car loans and credit card bills. These nonperforming debt sectors have ballooned over the past couple of years. Hitting new records in 2023, even before those end of year holiday shopping bills showed up in inboxes.


We’ve even begun to see major home builders sell off entire projects to cash out, and mitigate the risk of a changing new home sales market.


Billions more in mortgage debt became delinquent in the final quarter of 2023. Meaning more motivated sellers who need to sell their homes and go rent before they have to go through foreclosure.

 

This is a great time to pick up discounted real estate deals, and flip them to landlords who are going to see a big rise in the demand for rentals, and the wealthy that have enjoyed windfall profits from AI investments. Just as the crypto crowd did before them.

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Housing Inventory Is Exploding In This One Market Segment

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on Thursday, 08 February 2024
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Still searching for more house deals to wholesale?


Opportunity and housing inventory seems to be growing fast among this one segment of the market. It’s only likely to grow even more this year.


If you are looking to do more deals, and to find motivated sellers willing to accept low offers, check this out…


Landlords Are Going Broke

More and more landlords, big and small, appear to be going broke. All the way from mom and pop landlords with one to a handful of properties, up to big banks with lots of pending REOs and their own underperforming real estate assets. As well as builders who are looking to exit before the market really changes on them.


Why Are They Going Broke?

There are many reasons that landlords are falling into financial distress right now. Ranging from poor acquisitions of properties with big and expensive issues, to the last couple years of the economy.


On the property level this can include deferred maintenance, tenant performance, inflation in holding and operating costs, poor property management and contractors, new regulations and malicious lawsuit trends, and more.


On a personal level this can include diminished retirement account balances and financial power, unemployment, inflation in personal living costs, and credit lines getting cut off.


Finding The House Deals

Some of these properties are being listed through agents. Though many owners are still on the fence, or haven’t listed yet. Especially as they don’t want the expense of Realtor commission.


So, how do you find them? Indicators to look for include; delinquent taxes, google searches related to financial distress, leads from property management companies, mortgage lates, mechanics liens, out of area owners, evictions records, building permits being pulled, code violations, local housing authority contacts and who has failed their inspections.


Make Lots Of Offers

Time to close and stopping the financial bleed are probably most important when it comes to selecting purchase offers. They might not get their whole investment out, but that’s better than losing more, or lawsuits from failing to keep up their properties.

 

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One Dollar Home Deals Prove The Market Is Changing

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on Wednesday, 31 January 2024
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New Jersey has announced it will start selling off homes for as little as $1. Along with states like Ohio and New York, which are again working to get ahead of blight in the form of abandoned homes, it seems more distressed real estate is coming down the pipe for investors.


While many of these house deals require substantial repairs and may be reserved for retail home buyers, investors can expect more inventory to become available this year.


Distressed Debt And Real Estate Deals Are Building Up

It’s no secret that credit card, auto loan, and other debt has been deteriorating in performance, with a mountain of nonperforming debt that has been growing for several years.


As consumers run out of money, savings, credit lines, and find it harder to get new jobs, this will almost inevitably turn into more nonperforming debt sales, and REOs.


In fact, one economist has predicted there will soon be $1T in defaulting real estate debt to contend with.


Buyers have become more cautious, and as the Fed still hasn’t begun cutting rates, they are unlikely to swarm the market or be eager to pay recent market rates.


Get Smart

Many real estate investors in the current market do not have experience with the types of transactions that were popular in the last great recession. It’s a smart time to educate yourself about these types of deals, so that you can embrace them.


This includes REOs, short sales, and various forms of alternative and creative financing. Including using transactional funding to wholesale real estate.


You should know who the parties involved are, what their processes and timelines are, and start building the right relationships now.


Making Successful Real Estate Purchase Offers

What does it take to get offers accepted in this environment?


Fast closings are critical to sellers. Many are under a lot of pressure, and will lose their properties if they don’t sell on a tight timeframe.


Simplicity is key. Buyers can’t afford to be tied up in lots of contingencies. They don’t want long inspection periods, appraisal contingencies, and the like.


Finally, they will prioritize offers from qualified buyers with proof of funds, and who they can be confident in to close.

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How To Flip Houses In A Declining Market, Without Risk

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on Tuesday, 23 January 2024
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While most media outlets proclaim that house prices just keep on rising and will this year, many real estate investors, sellers, and agents are finding the market much more challenging in reality.


Of course, all real estate is local. Ongoing population shifts and new secondary rounds of migration between states and cities may certainly be pushing up prices in some areas, while others struggle.


Still, there is no denying that there are mountains of distress in the shadows. With as much a $1T in real estate loans set to default according to at least one economist.


Of course, doing nothing is only going to hasten your demise. You can’t stop doing deals, or let your money sit idle. So, aside from changing the geographies of where you are flipping houses, what else can investors do to keep doing business and make money, without taking on too much risk?


Of course, nothing is without risk. Not even keeping money in the bank or under your mattress. Yet, there are certainly ways to squash risk to the absolute minimum.


Wholesaling Real Estate

Wholesaling is a far lower risk real estate strategy than fixing and flipping houses, buy and hold, or new construction. It’s all about buying low, and selling low, which is what the current market is all about.


Find The End Buyer First

Make sure you have an exit before you get in. This is how you actually invest with confidence versus just gambling on what could happen. If you have an end buyer, especially one under contract, and with money on the line, you know you are already going to exit and get paid before you make an acquisition.


100% Funding

One of the best ways to minimize risk in real estate investing is to use financial leverage. This allows you to share risk with others.


Best Transaction Funding till offers 100% financing, including closing costs. That means you really have no skin in the game to lose should things really go off the rails.


Summary

This year is likely to bring a very interesting economy and real estate market. There are lots of opportunities. It is all about finding the right structure, strategy, and model to lower risk, and increase profit margins, so you can get busy making profits, with confidence.

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Real Estate Business: What’s Changing This Year

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on Thursday, 18 January 2024
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A wide variety of highly impactful changes could be coming to the real estate industry this year. Here are at least seven significant changes real estate business owners, entrepreneurs, and investors should be watching…


Realtor Commissions

Recent lawsuits have found that NAR has illegally colluded to artificially keep Realtor commissions high.


This will not only cause consumers to lose faith in Realtors, but also to put more downward pressure on their commissions.


TikTok to Tinder

This may be the year when advertisers finally realize that no one is really buying things on Tiktok. Marketing is everything, but ROI on marketing and labor is more important than ever. Some may find that they get better results on in person marketing offline or Tinder than wasting time on TikTok.


Employees Vs. Contractors

Strict new criteria is being rolled out for classifying employees versus independent contractors. Many real estate businesses may have to restructure how they hire and what they have team members do.


This comes right on the brink of the world’s largest freelancer platform Upwork looking like it will implode after a string of terrible decisions that have burned their best customers.


New rules around employees and contractors mean that few will want to or can afford to risk even hiring remote workers in places like California or New York.


The Real Jump In Inflation May Be Coming

Consumer prices are still astronomically high, and growing. Though, recent and current events from new regulations to conflicts in the Middle East, and interruptions of shipping paths could create a new round of hyper inflation that is even more significant than post-COVID. If shipping and import costs are quadrupling right now, what will that mean for consumer prices in the next couple months?


The Next Phase Of Migration

We recently experienced huge shifts in companies and residents from places like NY to NJ and FL. That is now triggering a new round of migration from these states to new destinations like AL, SC, and OH. Some media outlets have also posed that the new American Dream is now to leave America for better lifestyles elsewhere abroad.


We’ve also recently seen more than one proposal to open up the use and sale of public lands to foreign entities and migrants.


Property Prices

While some see inflation continuing to lift property prices, other investment industry veterans expect $1T in debt defaults, and prices to fall by 50% or more over the next year or two.


Small price cuts are no longer cutting it. It has to be a complete no brainer with an existing exit at a steal of a deal price to attract solid offers and buyers.


The Middle Class Is Gone

Inflation and a weakening job market leave only room for the highly paid tech elite or the welfare class on food stamps to survive. Consider how you can serve these groups in order to keep business flowing this year.


The bottom line is that real estate investors, entrepreneurs, and business owners will have to do things differently, find new groups to serve with new proposals, and price deals differently this year. Yet, this all means immense opportunity for those who are flexible and get ahead of the curve.

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Don’t Kill Your Real Estate Business With Deadly This Mistake…

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on Thursday, 11 January 2024
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Want to save and grow your real estate business this year?


One critical step is to avoid the business killing mistakes that are sabotaging other companies from the inside out.


We are already on the precipice of seeing many companies small and giant implode due to poor choices in implementing automation technology and artificial ‘intelligence’.


At the root of this is often a very broken belief that more automation and AI will make everything better. Internal efficiency is important. It is becoming more important as many businesses find themselves refocusing on cost cutting.


Being prudent with your finances is vital. Yet, as Seth Godin says, “you can’t cost cut your way to greatness.”


This is especially if you end up cannibalizing your own business, and alienating your best customers. Without those customers you simply don’t have a business.


We’ve seen this at giant incumbent companies in a variety of industries, and multibillion dollar startups that turned to trying to squeeze and bleed their best customers dry, only to their own demise.


The Steak ‘n Shake Issue

A road trip across, or up and down the country this season can easily reveal all of the flaws of current tech trends. As well as how to do customer experience right.


Steak ‘n Shake is an 89 year old restaurant chain. Once having over 600 locations, and pulling off a turn around that added $100,000 a day in sales.


Go into one of these long beloved diners today, and while you might find the same vintage decor, they are likely dead and empty. Gone are the waiting staff. Instead there are big do it yourself ordering screens. No cashiers either.


You might just run across a couple of other customers. Though it is likely they will be frustrated at the experience.


There is no customer service. The experience they went for no longer exists. They could have been better served using Doordash or going through a rival drive thru.


The food may still be good, but no one may ever know, because they just aren’t customer friendly anymore, at all.


In stark contrast, your next stop on your trip could be a Buc-ee's gas station.


Of course they have technology. They have cameras, modern registers, and more.


Though, first you’ll notice they are super packed with customers. Often to the tune of over 100 gas pumps in action. Inside is packed too.


So, what’s the difference maker?


At Buc-ees, you’ll see lots of human staff. You’ll see lots of additional products. They’ve been focused on adding more value and services, and humans to help. It appears to be paying off big time.


The staff also seem happy, and go out of their way to help customers. Even with seemingly small issues and requests.


The company also advertises they are paying over $250,000 a year for some job roles. So, a household with two workers, who save half their income could be millionaires in just four years, just working at a gas station.


Something To Think About…


If you’ve been thinking about how you can keep your real estate business alive, and keep growing it during this period, a road trip might be just what you need.


Go look at some new markets you can do real estate deals in. On the way you’ll quite likely find some nuggets you can use.


That may even include seeing opportunities to acquire business at deep discounts that have gotten this wrong. As well as discover new groups of buyers and investors that are thriving and are enjoying their best financial lives thanks to choosing to give more value and human service in spite of recent fads.


Remember that technology efficiency that enhances your internal operations and real net profitability can be important. Yet, it only works to save and grow your business if you are also adding value and better service to your customers, in the form of an experience they like.

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Real Estate Investors Can’t Afford To Have A Scarcity Mindset

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on Thursday, 04 January 2024
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Real estate investors simply cannot afford to allow themselves to fall into a scarcity or fearful mindset.


If you’ve found yourself holding back from doing more deals, or bunkering down instead of pushing to grow your investment business, this is for you…


Self-Fulfilling Mindsets

We almost always get what we think about and focus on. So, when we are focused on growth, positivity, and getting out there to do more deals, it happens.


Similarly, when businesses and investors contract, begin holding back out of fear, and fear they don’t have enough money, guess what happens? Deals don’t get done, and they run out of money.


Remember that there have been other individual investors and CEOs that have made incredible fortunes in real estate in more challenging times than these.


If you want others to keep being active in the market, then you need to lead by example.


If you are not marketing every day, making offers every week, and are not closing on deals every month, then it is only a matter of time before you do run out of money and end up bankrupt.


The only alternative is to get busy making things happen.


The Demand Is Always There

In addition to the fact that real estate wholesalers can do business just as easily in up and down markets, one of the beautiful things about being in real estate is that the demand is always there.


There will always be a need for housing. To the tune of millions of households per year. For one reason or another people will always need to move each year. Investors and companies will need to sell and buy properties each year.


Even in a depression there will be movers, those who need to downsize, divorcees splitting households, those needing to find tax breaks and new income sources.


Connecting the dots between the supply and demand may require some adjustments in your business model, and a little creativity. Yet, there are plenty of deals to do, if you’ll just step up and take advantage of them.


Do Deals Daily

As a real estate wholesaler you really don’t have to worry about what direction the market will be headed in next quarter or next year. It is irrelevant to you making money right now.


Push ahead by making a minimum of five purchase offers each day. Set goals to add at least five new end buyers to your list each day. Based upon your income goals, set figures for how many deals you will close on and exit each month and week. Then just get to it.

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The Challenges And Opportunities Of The 2024 Real Estate Market

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on Wednesday, 27 December 2023
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The 2024 real estate market is shaping up to be an exciting landscape. An environment with its fair share of both challenges and opportunities.


What should investors be watching? How can they ace the market and win this year?


The Challenges

Uncertainty: Investors and real estate professionals should have learned to become quite comfortable with uncertainty by now. There will be plenty of it this year. Forecasts are still split between growing or nose diving property prices. Use this to your advantage instead of being hampered by it.


Buy from the bearish, and sell to the bullish.


Staffing: While AI and recent mass layoffs may be creating more unemployment, high consumer living prices mean that workers need to make more per hour in order to make working make sense for them. Be prepared to work with a leaner remote team, or pay a lot more this year.


Changing Demographics: Mass financial distress and migration are significantly changing the demographics of property buyers and tenants. Real estate businesses need to stay alert to this, and be able to adjust to these shifts in supply and demand. Average credit scores will change, as will who is investing.


The Opportunities

Motivated Sellers: While many seem very optimistic about the economy, the data seems to suggest that millions of households are facing extreme financial distress. Many appear to finally be at the end of their ability to hold on to vehicles, credit cards, and homes.


In turn this will yield many opportunities to pick up properties at deep discounts, and on better terms.


Failing Competitors: For all of the above reasons many of your competitors may fail or quit this year. These are great opportunities for acquiring their business. Either in the form of buying their companies, their real estate, or absorbing their staff and customers.


Interest Rates: The Fed is expected to begin cutting interest rates in 2024. That could translate into lower borrowing costs for businesses and real estate.


Well qualified buyers could find this makes for better financial projections when taking out mortgages. While also providing more working capital to companies, and providing room for house prices to grow. It may also encourage more owners to sell and move, creating more inventory.


Of course, you don’t have to wait on the Fed for attractive real estate financing deals. Best Transaction Funding is still offering low interest rate loan deals for real estate investors right now.

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Will 2024 House Prices Crash By 50 Percent?

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Will the bubble burst in 2024, and send house prices crashing by 50 percent or more?


According to one economist, the ‘everything bubble’ is about to pop. Leading to the deepest depression we’ve ever lived through.


If that happens, what will continue to make real estate stand out as an attractive investment? What’s the best way to take advantage of the dip, without having to wait and hope that the Fed cuts interest rates?


The Everything Bubble

Economist Harry Dent predicts the worst depression of our lifetimes coming in 2024. This time it will be deeper and longer. With asset prices falling across the board.


He forecasts that stock prices will fall by around 90%, and crypto by close to 100%.


Additionally, in contrast to 2008, when he says property prices fell by around 30%, this time he says they will fall by 50%. For those that experienced 50-70% property price declines in the last financial crisis, this one would see them far even lower.


The primary reason for this is being blamed on 100% artificial inflation since the wake of 2008.


Real Estate Is Still The Most Attractive Investment

While trading prices may temporarily stumble, at least real estate offers a tangible asset. One that can bounce back. As well as being able to produce strong cash flow streams, regardless of paper valuations.


We could see a lot more demand for real estate in a period like this. As savvy investors are going to need a flow to preserve their capital, more income sources, and want to buy when prices are low.


The Best Investment Strategy

If you also anticipate a hard correction, or just aren’t sure about the direction of the economy in 2024 and beyond, then wholesaling real estate seems to be the best strategy.


It enables you to be in, out, and paid before prices change.


With Best Transaction Funding you can also take advantage of rock bottom interest rate deals right now. No need to wait in hope of the Fed cutting rates in the run up to the November election.


What’s your forecast for house prices in 2024? How will you navigate the market successfully?

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2024 Fed Rate Cuts Are Coming

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on Saturday, 16 December 2023
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In December the Fed finally halted its economy crippling interest rate hike spree. As well as indicating three interest rate cuts could come in 2024.


What impact can real estate investors expect this reversal to have on the market and their businesses?


Lowering Interest Rates


The Fed’s recent series of rate hikes has crushed most of the economy, driven up inflation, and changed the dynamics of many household’s finances for the next decade or two.


Talking about three rate cuts in 2024, and more in 2025, and 2026 suggests that they now realize that they’ve already done immense damage that needs to be reversed quickly.


Depending on a variety of other factors, that may or may not directly lead to prompt reductions in interest rates on credit cards, auto loans, business loans, mortgages, and the interest paid on deposit accounts.


The Impact

The most obvious expectation of lower interest rates for businesses and consumers is encouraging more transaction activity. Especially in terms of real estate transactions.


It could also fuel the ongoing appreciation of property prices. Reversing any temporary dip caused by a lack of affordability.


More money floating around the economy and real estate industry again would be welcomed by many, and could help avert another depression and financial crisis.


But…

The Fed clearly knows that there is more bad news coming down the pipeline that has been published in the data for the masses yet.


While rate cuts seem quite likely in an election year, this reversal will only work if they come in time to have effect before people run out of money. The impact will also be muted by other employment challenges, like AI.


The promise of rate cuts may give many hope, though the real math is a law of physics that everyone still must grapple with in the meantime.


Thankfully, as a real estate wholesaler you can take advantage of rates as low as 1% with Best Transaction Funding right now!

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5 Must-Do Items Before The New Year

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on Wednesday, 06 December 2023
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These are the five most important to-do items that should be on every real estate professional and investor’s list before the new year arrives…


No matter how busy you think you are, or the ‘urgent’ things that try to distract you and steal your time, the below will make or break how you end this year, and how the entire next year will go for you.


Review The Past Year

Take a day to review the past year. What worked well and didn’t? Why?


Evaluate any gap in your goals versus achievements. Did you surpass your goals, or fall short? What caused that?


Ask what has changed in the real estate market and economy, and your business, and life over the past year, as well as your personal development?


Then take the next day to celebrate all the progress. Even if you didn’t hit all your goals.


Set New Goals For The New Year

Make them specific, BIG, and achievable.


Anchor these to your underlying why. Make them visible on a daily basis. Not just for yourself, but for your entire team.


Begin setting up the framework to be able to achieve these goals over the next 12 months. If you don’t have a template for this yet, even just start a spreadsheet with the categories of items that you need to accomplish them. Including the team and roles you need to till, the connections you need to make, the infrastructure that needs to be put in place, and the budget and funds required.


Evaluate The Outlook For The New Year

Consider what is likely to change or stay the same over the next year?


Such as new regulations, demand and supply, the cost of doing business, and more.


Ask what are the unknowns or wild cards that could be played? How can you be prepared to weather it and capitalize on these changes, so that your business is unshakeable when things happen?


Take Time Out To Reset

Recognize that this is some of the most important and profitable time you will invest in yourself and your business all year.


Whether it is a weekend or a week, the ROI on this time outside of your business will return many times that of the hours you are busy in your business the rest of the year. It will boost every other minute you spend doing things over the next 12 months.


Getaway somewhere new. Ideally you can unplug from everything for at least 48 hours.


Decompress, get inspired, gain new insights, recharge, reenergize, and regain your focus, and perspective on the big picture.


This is the most important thing we all MUST do before the new year.


Set The Table

Then take the remainder of the year to have conversations about everything you’ve contemplated, learned, and set to do for the next year.


This season is ideal for sharing many meals with important people in your life, and new people. This sets the table for the entire next year.


Spend quality time with those you love and care about, time bonding with your team, and connecting with new prospects, and potential partners. Eat together, get feedback, solicit ideas to streamline your achievements, and set up plans to take next steps with them in the new year.

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US Home Prices Hit New Record High

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on Thursday, 30 November 2023
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The S&P Case Shiller Index reports US home prices have hit a new record high, after posting 8 straight months of consecutive gains.


Just how high are home prices in the US now? Why are they going up so much? What does it mean for property investors?


Record High Home Prices

While all real estate is local, and there seem to be many ways to calculate ‘average’, Forbes recently put the average home price in America at over $495k.


Including interest for retail buyers that use financing that means the average home can now cost homebuyers well over $1M.


The average rent households can expect to pay in their lifetimes may well be over $500k as well.


The Ideal Conditions For Real Estate Wholesalers

The mainstream media say that house prices keep going up due to a lack of homes for sale. Of course, high inflation on everything is certainly adding fuel to the fire as well.


Many industry experts, Realtors, veteran investors, and home sellers may disagree with these findings too. Some are certainly seeing transaction volume down, longer marketing times, and buyers wanting to pay less.


Recent bank data shows that there is a mountain of distressed debt growing. Including defaulting credit card payments, auto loan repos, business loan delinquencies, and construction and commercial mortgage defaults.


This signals great distress behind the scenes, with many ripe to be motivated sellers. Together with fast rising prices, and a shortage of publicly marketed units to meet demand, these are the ideal conditions for wholesaling real estate.


Connecting The Dots

There is great need out there. With millions of individuals, households, and businesses needing help. Real estate investors that can help bridge this divide stand to be very well compensated in this market.


While many motivated sellers have not listed their homes, they are out there. Many more would love to, and need to sell, if they can get a reasonable offer. Consider how to identify their distress, and reach and and connect with your purchase offers.


There is plenty of investment capital that needs to be put to work as well. In the form of transactional funding, this money can be very cheap. With current deals on jumbo sized loans coming with as low as 1% interest.


Then it is about presenting this inventory to end buyers. These may be other professional investors, movers seeking to downsize and find more affordable housing, or affluent families looking to protect their wealth in real estate. Find out where they are, and market to them.

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9 Things To Be Grateful For This Month

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on Monday, 20 November 2023
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Gratitude is powerful. Here are nine things we can all use to leverage the power of gratitude this month.


It’s not always easy to keep up the habit of practicing gratitude as a part of morning routines. Yet, it is incredibly rewarding when we do take the time for it.


Even if things feel tougher right now, here are some of the things we can take a moment to be grateful for before we get into the season when most are focused on receiving and getting new things.


Low Interest Rates

While many might be experiencing the highest interest rates they’ve seen in their adult lifetimes, they are still historically very low. Wait until they hit 14% or 20% again.


If 5% or 7% still seems too high, then check out our current deal, with interest rates as low as 1%.


Opportunity And Ability To Invest In Real Estate

Just having the opportunity and ability to invest in real estate is a huge privilege and benefit. Many people will never realize that they have this chance to control their own financial circumstances.


The Tax Breaks Real Estate Has To Offer

Taxes are not fun. They only seem to be multiplying and going up. Fortunately, along with many other benefits, real estate offers a lot of tax breaks, if you take the time to take advantage of them.


The Freedom Being A Business Owner Offers

Owning your own real estate investment business gives you complete freedom over your own schedule. Many fail to exercise that freedom, and to take advantage of the flexibility or time off it provides. Though you do have control of that.


Convenience

It’s never been easier to invest in real estate. You can find and wholesale homes online without ever getting out of bed. You can get just about anything you want delivered to your job sites to complete house flips in two days.


Humans

As technology continues to take over, and the major flaws in AI, automation, and cybersecurity become even more glaringly obvious, it’s a great time to be grateful for humans. Even if they aren’t perfect either. Those in your family, that serve you, and that work for you, and who are your customers. You can’t make it without them.


Room For Growth

There is plenty of room to do more, and expand and scale what you are working on. Even if you aren’t satisfied with your current situation, be grateful there is so much available for you to do.


The Progress You’ve Made So Far

Even if you feel like you are going to fall far short of your goals this year and there is so much more you aspire to, take a moment to remember the progress you’ve made. No matter how significant you feel it is, celebrate those wins.


How Many People There Are To Help

There are millions of people out there that could use your help. They may need to sell or buy properties, or invest. Each one is an opportunity to grow your business, and to feel great that you are making a difference.

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Realtor Commissions Deemed Illegally High By New Court Ruling

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on Tuesday, 14 November 2023
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A new court ruling has found that the National Association of Realtors has illegally kept real estate commissions inflated.


This verdict could dramatically alter the US real estate industry, in far more ways than many imagine.


Are Realtor commissions too high? How will this change the model of how properties are bought and sold in America? What does it mean for property investors?


Are Realtor Commissions Worth It?

This particular case in Missouri resulted in $1.8B in damages being awarded. This follows on from other lawsuits and settlements against individual brokerages, and several years of Justice Department investigations.


The main issue publicly centers around NAR having illegally colluded to keep commissions up at 5-6%.


An issue made extra ironic as it is supposed to be the organization that upholds ethics in the industry, and add credibility to agent members. Not detract from them.


Of course, when you really do the math on what Realtors net in a transaction, and how hard they work, many may be barely scraping in a minimum wage income.


Between privacy, efficiency, and negotiation benefits, the best real estate agents do offer great value. They certainly aren’t overpaid. Yet, gross commissions can be expensive, and eat away at your net as an investor.


Changing The Way The Industry Works

This is much bigger than just making NAR irrelevant or slashing Realtor commissions.


Coverage by Bloomberg cites a push towards the UK and Australian models, where commissions are much lower. Of course, this may come with many unintended consequences.


Often overseas there are no agent licensing requirements. Agents get their own listings, and do not cooperate or share commissions with buyer agents.


In turn, consumers have no one protecting their interests. Living and housing costs are dramatically higher. Homeownership is prohibitive in terms of access and expense. Investors abroad prize the current US model, as their local options are normally wealth preservation with very low yields or negative cash flow rentals. This model would erode our national advantage, and would hurt individuals far more than most imagine.


For Real Estate Investors

First, if you’ve been debating becoming a real estate agent before investing, don’t. Skip the costs, time, and going into a contracting industry.


You may still find great value in using real estate agents. You may also find the ability to negotiate better deals on commissions going forward.


This, in addition to end investors having to get used to lower yields, and negative cash flow, can mean a lot more profit for real estate wholesalers.


Now is the time to make your push, as those who control the inventory, will control the market.


Our Fall loan deals with rates as low as 1% can help! Check them out here.

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How To Find More Motivated Sellers In This Market

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on Thursday, 09 November 2023
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How can real estate wholesalers find more motivated sellers and buyers in this market?


Securing the most valuable and profitable property deals, and getting the best ROI on your time and marketing efforts all comes down to finding and connecting with motivated sellers, as well as buyers.


This requires understanding who is motivated and what trigger points will lead them to convert.


Who Are The Motivated Sellers In This Market?

There are both institutional and individual motivated property sellers in this market.


The overriding theme here is high inflation and high living costs, which could last for many years according to some experts. A factor which may also be compounded by soaring unemployment due to high costs and the rise of AI.


According to Axios, small US banks actually hold 70% of all commercial real estate loans. They also hold almost 40% of all residential real estate loans. These institutions are coming under increased financial pressure as consumers run out of money and demand their deposits back, and default on loans.  They need to convert more assets to liquid cash. Which could make them a prime source of wholesale property deals in the near future.


For those that don’t think they are in trouble, it is worth noting that a coalition of these small banks have been pleading with the government to insure all of their deposits for the next two years.


Then there are all of the individual homeowners who are grappling with financial and emotional struggles.


What Is Convincing Property Owners To Sell?

Owners generally don’t take the action to actually sell and go through with the process unless they are really feeling stress in their current situation, and perceive more relief and pleasure from it.


According to a US News & World Report, the top things keeping people awake at night this year include high living costs, pandemics, gun crime, climate change, and the presidential election.


How To Put This Into Play In Your Business

Utilize the above information to hone in on who your highest converting prospects are likely to be.


Use it to craft your marketing campaigns and in how you pitch your purchase offers.


Then use this same data to understand how to best pitch your properties for sale to meet the needs and desires that your prospects are looking for. Highlight how your properties check their boxes.


Now check out our Fall Loan Deals for financing as low as 1% on your wholesale properties.

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