Are property management companies the next hot spot for leads for real estate investors searching for deals on wholesale properties?

While many retail property owners are still misinformed and are trying to list at top of the market prices, many others are waking up to the reality of where the market really is right now. For a variety of owners in different locales, that means distressed properties and motivated sellers and agents.

Why Are Property Management Companies Ripe For Lead Generation?

Everything comes together at this intersection. Renters who are being financially crippled by inflation stop paying their rent, and end up vacating units, or in evictions. Owners who are feeling the pinch in their personal finances are coming up short when it comes to renovating vacant units at today’s sky high material and labor costs.

In turn, these properties become dead weight, a source of financial bleed, and a huge liability for property management companies which are supposed to be servicing them, but aren’t making any money on them.

These companies have large databases of owners. Many of whom want and need to sell.

At the same time, these can be great properties, which can become fantastic income streams with a little sprucing up, and new tenants.

How To Pitch Them For Leads

Cold emailing, and spamming main inboxes is unlikely to be very fruitful. Yet, there are many individuals in these organizations with this information, and who are motivated to help.

Team members in maintenance departments know which properties are sitting idle with deferred maintenance. Leasing agents know which are vacant. Account managers know their clients’ financial situations, and who is actively looking or needing to sell.

You can knock on office doors, call individual extensions, email various departments, and even use ringless voicemail.

While your value proposition should be obvious to this lead source, you can also sweeten the appeal by referring your end buyers back to them for property management service once they are ready for a new tenant.

A well crafted email series, phone script, and text message template can help you tap into these sources of deals at volume.

Remember, if they don’t have owners selling, then they probably have owners who are acquiring, and can be great end buyers for your other wholesale deals.

 

40 million renter households in the US could be headed for eviction in the next 40 days. While epically tragic, it also brings great opportunity.

According to the latest data from the Aspen Institute this many tenants could be in the street by the end of September 2020. According to the Census Bureau, 34% of American renters didn’t have any confidence they could make rent in August.

Tip of the Iceberg

The truth is that there is probably a lot more distress coming. We are currently at a stage when most of the help seems to be over or at least frozen. Yet, especially renters have now burned through all of their savings and credit card balances waiting the virus out. Even those still employed are mostly probably seeing lower incomes, while expenses are up between hand sanitizer, masks, toilet paper and stocking up on groceries at inflated prices.

Unless there is a major historic change in these dynamics quickly, then it seems a tsunami of evictions is inevitable. It could end up being a whole lot more than 40M. Just think about the impact of 1 out of every 2 or 3 American households facing eviction.

Where’s The Help?

There have been promises of help and a new executive order from the president. In reality that help isn’t being spread out equally and many aren’t getting it. Many landlords and lenders aren’t willing to help, or they are no longer financially able to.

There have been new promises of eviction and foreclosure moratoriums. Not all are obligated to them. There is a lot of confusion between federal, state and municipal levels.

To compound the problem with evictions is where they will go. Affordable housing was already at crisis point before this. Many landlords won’t see the sense in re-leasing to someone else right now. For most it may just make the most sense to cash out.

Much the same is true for homeowners and foreclosures. There will likely be a sizable wave of distress sales in play.

The Flip Side

The flip side is that demand for purchasing properties is massive and urgent. End home prices are up, interest rates are low. Millions are moving for a variety of reasons.

Then there are also rehabbers and institutional landlords to sell to.

While it is tragic for many households. It is a huge opportunity to help many others. It is the perfect opportunity to help and boost your income too. That’s true whether replacing other income from a lost job, or scaling an existing real estate business. No one is ready to buy that many deals, and there are plenty to go around if investors move quickly.

Check out our VOD service to make more offers and land more deals fast.

 

Suddenly all of those who have been denying a new dip was coming are realizing they were way wrong. Many are still lying to themselves about how deep this is going to go. What do you need to know about surviving and thriving as a real estate investor now?

It’s Going To Make 2008 Look Like A Vacation

This economic crisis is going to make 2008 look like a test trial. Expect the fall out from COVID-19 to be at least 2x as bad.

Fortunately, we can also take comfort in the fact that there are predictable patterns and cycles. The massive shift in daily life will really shake up some people.

They didn’t know life could change this much, so fast. Yet, we know that over the long term most real estate will keep growing. Today, the luxury NYC condos that were selling for $2M yesterday are probably worth less than a roll of toilet paper. Other parts of the market, where those quarantined have lots of yard to move around and maybe room to grow their own food are going to explode in value.

Schools and work may never be the same. In many cases that is a good thing. It is just speeding up the most to being more efficient.

A 70% drop in the stock market and some housing markets shouldn’t shock you.

Foreclosures

There will be some similarities from 2008. As in the best moves to make to get through. Yet, some things will be substantially different.

Don’t count on a flood of foreclosures. Governments are already banning foreclosures and evictions. If we don’t eradicate the virus fast, the foreclosure process will probably be years in the making.

So, be wary of spending all of your time and marketing money on foreclosures. Sellers aren’t going to buy the fact that they will lose their homes.

If you hold mortgage notes, the best thing you can do is to be proactive. Communicate with your borrowers. Give them a break on payments. Those will be the ones who stay and work things out with you.

However, there will be other types of distressed property sales. Especially among new developments and all of the owners of Airbnb properties who far overpaid and can’t rent their units. As well as speculators and flippers who need cash. Don’t forget condo owners in big cities who don’t want to be quarantined in small apartments in the middle of the chaos.

Landlords & Renters

Renters are going to stop performing. They are already being told Trump is going to send them bailout money, just like Obama in 2008.

Be proactive, talk to them, give them a break now. Or they are going to drag it out a lot longer than you think. When they do get out, you may have to lease at dramatically lower rates.

You can make it, if you work with them now, and keep tenants who will deliver cash flow again in a couple of months.

Wholesale Real Estate

Real estate wholesaling is the perfect investment strategy for this market. Get in, out and paid fast. Before the market can change on you. Use transactional funding to finance your deals, and hold onto your cash for now. They are already making runs on the banks and banks are limiting access to cash. You’ll have plenty of opportunities to invest it as asset prices get lower in the months and years ahead.

Just don’t stop marketing. This is your chance to expand market share.