Bank Of America Expects To Lose $50B
While many parts of the country are seeing very strong and growing real estate markets and home prices, new data seems to reflect a sizable amount of stress still bubbling under the surface.
What does it mean for real estate investors?
Bank Of America Expects To Lose More Than $50B
While the Fed has proclaimed that banks have been passing stress tests with flying colors, Bank of America seems to be among those that are much more pessimistic.
The Feds have predicted the bank will bring in a lot more revenue, with fewer losses than the bank is forecasting. Which across anticipated losses on loans and credit, and goodwill, they expect to exceed $50B, in just a nine month period.
Interestingly, while the Fed is expected to continue hiking interest rates, they are also calling for banks to have higher capital reserve requirements.
We can expect these trends will make banks even more cautious about making loans, and their capability in doing so. Especially on the consumer and homebuyer front.
Airbnb Revenues Crashing
While Airbnb hotly contests the numbers and say they are growing, one short term rental data analytics firm has proclaimed that hosts are suffering a 50% drop in revenues.
Altogether the above suggests that many short and long term rental property landlords may be about to run into more issues. Both in being able to get financing and making ends meet.
Real Estate Wholesaling
While there will continue to be buyers of income properties, that pool may shrink. There are also likely to be a lot more distressed asset sales coming down the pipe.
Real estate investors that are on the front lines of this may find it high time they switch to a real estate wholesaling model.
This enables you to get in, out, and paid, without worrying about long term financing, or renter dynamics. Nor being pinched between inflation and rent controls.
Best Transaction Funding is also continuing to actively lend on wholesale deals.
If you need to keep your income up, profit margins up, and utilize smart leverage, it could be time to embrace this model.
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