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.

This is a fantastic time to be wholesaling real estate. Of course, that means that many others are hunting for deals too. If you believe that there is a shortage of publicly listed properties for sale, that may make it even more challenging if you’ve relied on that for deals in the past.

Here are five more ways to out maneuver and beat your competitors to the punch.

Failing Competitors

Even though the real estate investment remains strong and attractive many started folding their businesses out of fear at the beginning of COVID, then as rates hiked.

Even though they may have stopped actively investing, many have portfolios of properties they are holding. Or at least sizable databases of seller leads.

You may acquire their company, their real estate assets at a discount, or their lead lists.

Insurance Agent Referrals

Insurance agents are among the first to find out when people find themselves in a crisis. That may be a health issue, a car accident, or damage to their properties.

In a few cases their clients may get payouts that make them strong cash buyers for your properties.

In most cases insurance companies do not pay claims. If they did, they wouldn’t be in business or so big. In these scenarios policy holders may have to sell their homes fast for cash.

Lumber Company Leads

This is another untapped referral source. When trees fall on garages or homes, lumber and tree service companies get the first calls.

In other cases these referral sources can tell you when prospects are desperate for cash and are trying to sell their trees cheap. Or where there may be a property which also has a lot of value in timber rights. Money that may be used for helping to acquire or extract extra value your competitors don’t see.

The Unemployed

The AI revolution is creating levels of unemployment and interruption to income at a scale we’ve never seen before.

The vast majority of property owners cannot afford to carry their mortgages for even a month or two without a paycheck.

Depending on your contacts and access to data, you may find these sellers by tracking employers that are making layoffs, through recruiters, new credit defaults, and job wanted ads.

Be The Fastest And  Most Attractive Buyer

Have your proof of funds in hand, along with a contract, and be willing and able to close faster than your competition. Those things can mean a lot more to sellers than the top line price today.

Be sure to check out our Fall Deal with interest rates as low as 1% on loan amounts over $600k.

Hurricane Idalia is yet another fresh reminder of how every area has some disaster risk.

As a real estate investor it is all about understanding how to mitigate, balance, and profit from that risk, in the right way.

Every disaster threat, from seasonal hurricanes, to wildfires, and snow storms bring their threats and opportunities. Both before and after they hit.

Pre And Post Disaster Real Estate Offers

Many sellers will be willing to offer big discounts, just to get out and put some cash in their pockets before a coming disaster, or disaster season.

If you have the stomach for it, and good strategy and tactics that mitigate the risk, you can acquire properties at deep discounts that end up not being impacted at all.

Post disaster, many owners will just be too scared to go back, or tired of living through these annual storms, even if their properties were not affected at all.

Of course, you should always have properties inspected after a disaster like this, or price your offers to include the worst case scenario. It is not uncommon for unscrupulous investors to try and cover up flood damage and mold.

Get your Proof Of Funds from Best Transaction Funding now, so that you can get out there and make offers with confidence.

Making Offers With Care

Just because sellers are highly motivated or desperate does not give you a pass to abuse them. Make offers with care and etiquette that help them. While allowing yourself to be fairly compensated for your part.

Just as it would be in pretty bad taste to be calling your tenants demanding rent right in the middle of a hurricane. Or making your team be out on the job in unsafe conditions, without giving them time to protect their homes and families first.

After the storm, you need to consider how you will kindly deal with desperate renters applying or buyers who need a roof over their heads.

Often during the post disaster period property prices can actually skyrocket due to reduced inventory, and thanks to many buyers being rich with cash from insurance payouts.

Submit your Funding Request and get your next deal financed today.

Insurance

Even if not necessary, insurance can be wise in these circumstances. Just understand all of the loopholes insurers use not to payout, and how long the lag time between damage and claims being paid can be. It is not uncommon for that to take years, and lots of negotiations.

Investment Strategy

Some areas will just keep on getting hit year after year. Some will keep rebuilding. Others will grow tired and give up. Or authorities will acquire land and temporarily block development.

Consider whether this is a good area for a buy and hold, construction heavy fix and flip, or just a fast in and out wholesale deal.

Check out our MEGA interest rate sale, with rates from just 1% this fall!

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.

 

The perfect home buyer app that lets you record notes and pictures as you tour a property. Review and share your reports with others from your Android, iOS device or computer.

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America is warming up to a new foreclosure boom. So where is the unlimited funding for wholesaling higher volumes of distressed property deals? How can new cash buyers be found for your list, on autopilot?

Out of the Shadows… New Wave of Zombie Foreclosures On the Loose

Real estate entrepreneur Brecht Palombo recently packed his family up in a metal RV and hit the road, heading from New England, to the West Coast, in hopes of making it to British Columbia.

He’s not a survivalist escaping the walking dead, but a member of a new tribe of location independent real estate CEOs. Armed with a 20GB mobile data service, Bank Prospector software for tapping into non-performing mortgage loan statistics, and having put his real estate business on autopilot Brecht is on a yearlong exploration of US real estate markets.

So far he has uncovered libraries with blazing fast Wi-Fi hotspots, obsolete commercial real estate obstacles, mountain biking trails built by the Army Corp of Engineers, and is surveying large swathes of the $250B in defaulting mortgage notes and REOs held by US banks.

While the media is just beginning to catch a glimpse of the tip of the iceberg of this new wave of foreclosures, there is far more distressed property inventory behind the scenes for aggressive real estate wholesalers to bank on, if they are willing to reach out and make the effort.

Several New York towns have turned to tearing down thousands of zombie foreclosures to makeover neighborhoods. The Palm Beach post just reported new foreclosures rising by 74% in August 2014, even though FL is pegged as one of the strongest investment markets in the country.

In order to land more wholesale deals Brecht advises “The best way to succeed in this game is to get yourself informed about the challenges and opportunities with the lender by reviewing their reports. Next you call in at as high a level as you can muster and you have a real conversation about what you see. After that you let them know how you can help and you do it persistently. I go in depth in the academy (DistressedPro.com) with what a good prospecting plan looks like, what's important to banks, how to identify the right ones etc. When you're informed you'll spend less time prospecting and more time working with real decision makers doing deals. Blind prospecting and uninformed cold calling is about the worst business plan there is in today's environment.”

Creating Your Own Mobile ATM: Access Unlimited Cash and Cash Buyers

There is no shortage of cash or cash buyers in the current US real estate market. CoreLogic recently reported South Florida transactions were now almost 60% all cash. More individual and institutional investors are experiencing increased liquidity as they turn to fixing and flipping houses versus buy and hold, to benefit from recent rises in equity and avoid property management drain. New reports have also shown that nonprofits are hungry for deals after having been blocked from buying at foreclosure auctions by big for profit equity funds.

BestTransactionFunding.com provides unlimited funding for wholesalers need Proof of Funds letters and acquisition cash for back to back wet closings. Wholesalers may also benefit from hooking up their buyers that need financing with new lenders like B2RFinance or RentalHomeFianncing.com which provide long term end financing and credit facilities for buying and holding rentals.

While there may be no lack of cash or wholesale deals to be done those investors that want to still be able to enjoy the freedom and rewards will find using the web and tech tools essential. Mr. Palombo recommends ensuring you are using a professional email address, and harnessing the power of email marketing, while The Agent Institute just launched a new PPC coaching program and series of free videos on using Google Adwords for marketing for buyers on autopilot.

In summary; there are no more excuses for not enjoying more mobility, freedom, finding distressed property deals, cash buyers to flip them to, or the money you need to hit your goals…

Case Study of HUD same-day, back-to-back transaction with BestTransactionFunding.com

Using BestTransactionFunding.com Transactional Funding for HUD Transactions

Investor explains how transactional funding can be used by flippers

BestTransactionFunding.com featured on CNBC

Once you have your transactional funding lender lined up and you have potential buyers lined up to flip houses to it’s time to focus on marketing to distressed and motivated homeowners.

What are some of the most effective marketing tactics for reaching these potential sellers that being used by the top real estate investors today?

Many of the most targeted lists you will get your hands on unfortunately may not come with phone numbers. One of the best ways to reach them is with a direct mail campaign. Forget postcards just because they are cheap and glossy. If you are working on a tight budget then you will find that handwritten and addressed style letters work incredibly well. If you can find someone else to do the writing though in order to maximize your time. Your teenager who wants shopping money, a neighbor who needs to make a little extra on a part time basis or a stay at home mom or dad. Give your letter a personal tone, though consider using toll free numbers to test different versions of copy, for capturing caller IDs and assigning leads to your sales staff if you have them.

One issue you may come across in your hunt for new seller leads is that while some attorneys, title companies, agents and insurance reps may want to share their client’s info with you, they may feel they are restricted in the personal information that they can share. The easy way to get around this is to run email campaigns as joint ventures. Have your partner send out your message to their database as a personal recommendation and you can even include a copy of your Proof of Funds letter from your transactional lender so they know you are serious. This is far more powerful than cold marketing, not to mention it can be free. Offer your joint venture partner a referral fee or send out an email message from them on their services to your database in return.

Another version of this marketing strategy is to put together a newsletter either as a mailer or in email form and have several of your strategic partners sponsor it so that it costs you nothing. Build subscriptions and readers for it online by enticing home owners with valuable content that is applicable for their current situation.

Despite the availability of 100% financing for purchasing and flipping investment properties with transactional funding some in search of true no money down deals still struggle to come up with earnest money deposits to lock down the most attractive bargains whether they are foreclosures, HUD homes, short sales or from other distressed sellers.

Transactional funding does offer 100% financing to cover both the acquisition price plus closing costs, but if you have to come up with a deposit to get a signed contract and you are running short on cash what are your options?

Obviously reaching out to friends and family isn’t ideal. You can try other investors and offer them a piece of the pie but that can really dig into your profits and mean giving up some control. Though don’t give up yet.

If you still have a regular job too then you can always try getting a payday advance loan. Normally they do not require any credit checks and can be funded in hours. You can also get a cash advance from one of your credit cards and pay it off within the grace period to avoid finance charges. If you don’t have a credit card or good credit and you do have savings but just don’t want to use them, then consider a secured credit card or secured line of credit from your bank. This will also help rebuild your credit rating.

If your credit isn’t bad then what about a signature personal loan from a local bank? Of course it is much better to keep your personal and investment credit separate and you will want to register a business to work under if you haven’t already. This opens the door to obtaining a business line-of-credit or even getting an AMEX card.

If none of the above are options, don’t panic yet. Transactional funding is often referred to as ‘flash funding’ for a reason - you can close in just days. There is a good chance that if you can close fast enough you won’t even need to make a deposit. If you absolutely must then ask your transactional lender about a Proof-Of-Funds (POF) or Verification of Deposit (VOD) letter which may be sufficient to help you get the deal accepted.