According to the narrative the mainstream media is selling, house prices are shooting up thanks to a lack of property for sale.

At the same time, common sense, and the data suggests that there is a tremendous amount of financial distress out there.

So, how can you find the houses and do more wholesale real estate deals?

Sure, there are many tools being advertised online for identifying properties and leads virtually. Of course, this may not work as well as it is marketed, and may now be saturated with competition.

Try these ideas instead…

Realtor Yard Signs

It may sound counterintuitive. However, many properties do not sell simply because agents fail to answer their phones or respond to leads.

Try calling on the for sale signs you see. If they answer, you may be able to strike a deal that way. If they don’t, then you can bet the owner is stressed and frustrated, and is looking for another way to get their property sold. Just be mindful of the rules regarding commissions being due.

Old Listings

Brand new listings get all the attention. You’ve probably got alerts to new listings yourself. That’s often not where the real deals are.

When was the last time you scraped older listings on Craigslist for example? Ads that may not be getting any competition. By now the owners may be even far more motivated to strike a deal and offer a discount.

Private Lenders

Private lenders have been incredibly busy putting out money over the past few years. Now many of their borrowers are not paying. Even though there may be equity in properties, and lenders have more than made their money already.

Lenders may foreclose and flip you these deals. Or simply introduce you to their borrowers to work something out.

Blog About It

Social media may be super saturated with cheesy junk, and so many ads that users have become immune to them. Yet, when it comes to homeowners searching for help, they’ll still most likely end up on Google. Which is going to feed them articles, blogs, and websites around their search terms.

Try starting a blog, or reviving and scaling one you’ve already got. Publish some content focused on how to sell your home in a variety of situations, and become the trusted advisor they turn to.

Inherited Property

A grim, but true statistic is that almost 3.5M people die in the US, every year. Based on homeownership rates, more than half of them may own a home at the time they pass away. This alone is a huge pool of properties.

Heirs and loved ones left behind need help. They are often left with a big debt that they cannot carry, and a lot of work. Often they just want to turn those properties into cash as quickly as possible.

However you plan to find your house deals, check out our Fall interest rate deals from 1% for funding your next acquisitions.

The latest economic forecast from mortgage giant Fannie Mae predicts house prices will fall by over 6% over the next two years. That doesn’t sound like much, but investors, and consumers also need to understand what they are heralding as loudly.

Home Prices Are Already Down 4x More Than They Predicted

Fannie Mae previously predicted that house prices would only fall 1.5% this year, and 1.4% next year. So, we are already talking about 2-4x deeper price drops, and many might argue it hasn’t even really started yet.

Or course this is in direct contrast to Goldman Sachs’ forecast, which says we’ve already seen those levels of drops and should bottom out this summer.

Many property owners, and recent sellers may also tell you that prices are already down even double, triple, or more than this forecast.

They Can Revise Back Data

Just as the Realtor’s Association back revised four years of data to show much lower numbers after 2008, any of these report publishers could go back later and say the cuts have already been 50% or greater more than they announced.

It’s All Local

This 6% number from Fannie Mae is a national ‘average’. Which really means that in some areas prices may still be going up by 30%, and they could be going down by 36% in others.

Make sure you have your own intelligence and pulse on the local market.

Low Interest Rates Are Irrelevant In many Cases

Fannie Mae is using the fact that interest rates have been low to claim there won’t be rate shock like in 2006 to 2008, and in turn no major crisis.

However, in the past year mortgage rates seem to have more than doubled. A much bigger increase than in 2008. Buyers were also paying 125% or more of actual values among the fierce competition. Many will still walk away. Many won’t be able to refinance. Many will fall behind and into default for other reasons.

Defaults Are Already Up

The latest bank data published by DistressedPro shows that defaults on both residential and commercial mortgage loans reverse course and started increasing again in the last three months of 2022.

While there haven’t been a tsunami of REOs yet, expect more defaults and foreclosures coming.

It’s a great time to be wholesaling houses on the way down this ladder, and making substantial profits. With both discounts available, and those buying into these forecasts expecting the market to rebound soon.

Bloomberg’s headlines recently announced that house prices just fell the most since 2009. Is that possible? If so, what do you do as a real estate investor?

Have House Prices Really Fallen That Much Already?

In contrast to Bloomberg’s report, Zillow data shows that while even hot markets have seen average home values falling a few thousand dollars month over month, they are still up by double digits from last year. Though there are many individual motivated sellers, companies, and banks accepting deep discounts from cash buyers.

If you lived or invested through real estate in the 2008 Great Recession, then you know that house prices can and did go down much, much more. They are likely to again.

How Far Can Prices Go Down?

If you owned property between 2006 and 2010, or know anyone who did, there is a good chance that property fell by as much as 50% to 70% in value during that time.

There are some exceptions. Slow growing, Midwest markets, and where home equity loans were limited to 80% LTV, like in Texas, may have suffered less severe drops.

Still, given that many buyers have recently been overpaying for properties by as much as 50% over top retail asking prices, this next dip could be even deeper than the last.

Real Estate Is Still The Best Way To Make Your Money

Those that are just now experiencing a rotation in the economy and real estate cycle for the first time may find this very scary.

It doesn’t last forever. Prices will rebound and surpass recent highs. At least according to what we’ve seen throughout history up until now.

However, if you didn’t plan for it, and don’t know how to navigate this part of the market, it can be shocking.

Fortunately, this is actually one of the best times to invest and make money in real estate!

There is a lot less competition, you can demand much better value deals, and terms.

How To Make, Not Lose Money In A Declining Market

There are several keys to winning in this market. One is making sure that your offers are low enough to be in and out, and make a profit, before the market catches up to you.

The next is to stick to wholesaling real estate. This means either flipping the contract without even buying the property yourself. Or buying and immediately reselling to an end buyer within 1-3 days.

You can lower your risk, and dramatically boost your cash on cash returns even further by leveraging and using transactional funding to finance 100% of your purchase price.

 

Got goals? You might need to shred your real estate goals for 2022 and start again.

Chances are high that they simply aren’t big enough.

Here are three strong reasons that you should strongly consider revising your plans for this year upwards, and starting putting everything you need into play to make them happen.

Inflation

It seems that we’ve barely seen the tip of the iceberg for inflation. What’s coming in the next few months is likely to far dwarf anything experienced over the past two years.

Don’t be surprised if real inflation for most every day costs well exceeds 30% before the end of the year. In real estate we are seeing house prices appreciate far faster than that. With it not uncommon for rents to be rising by 70%.

So, for one, if your goals are based on dollar amounts, they should be at least 30% to 70%, if not 100% higher to account for this.

Secondly, when it comes to what that money can afford, you are going to need a lot more than you think.

It’s Just As Easy To Go Big

The reality is that it is just as easy to think about and close bigger deals, than smaller and less profitable ones. So, if you are going to apply your mind, energy, capital and time, why not demand more from it?

Sometimes it may be even easier to buy, lease, and manage a $1M home, than a $10,000 vacant lot. Only the profits are going to be much different.

Money Can Buy You Happiness

A new report from Dr. Amir Baluch of Financial Wellness MD reveals new scientific data and studies which show that not only does money buy you happiness, but you may need a lot more of it to buy happiness these days.

Contrary to previous beliefs, the data shows that as income increases, happiness rises inline with that as well.

This isn’t about greed, or just having to have all of the latest luxury toys. More money can buy you peace of mind, more time, a better quality of life and health, and more.

If you’ve been holding back on your goals, and have been wrestling with your relationship with money and ambition, you probably need to upgrade those goals.

Summary

Having goals is essential for improvement and success. You may just need to upgrade yours this year. Real estate investors have been setting personal records for the past two years. 2022 is likely to be another record year for those with big goals. Make sure you are included in that.

 

Inflation in 2022 is expected to accelerate far faster than we’ve seen in decades. Even beating out the hyperinflation of 2021.

As a real estate investor you should be prepared to survive it, and understand how to leverage it to your benefit, instead of becoming a victim of it.

Transwarp Inflation

We are running out of terms to describe just how fast inflation is accelerating in the US. Some have started dubbing the pace we’ll see in 2022 as ‘transwarp’ inflation. Transwarp is about 8x the speed of light. It is a whole new dimension and laws of physics.

It is quite likely we will see mind blowing inflation over the next year. Price increases many didn’t think possible.

Consider that the Dollar General has been bringing in a new brand, called Popshelf, which targets prices around $5, instead of $1. Major food suppliers like Heinz are also increasing prices on some groceries by 20% in the first three months of the year. The actual retail price tag that consumers have to pay could go much higher.

In some places rental rates have gone up over 70%. Insurance rates have already gone up by 30% on many customers.

As a real estate investor or business owner you must anticipate these changes, and budget for them. Otherwise you could soon be in the red. Price in inflation on everything, including labor, software, marketing, title, taxes, interest rates, and utilities.

Property Prices

House prices have been growing even faster than inflation in some areas already. Property prices could go up much further in 2022. At least in some areas. Especially with ongoing migration and new covid variants. Use it to your benefit in flipping houses. Price it into your offers.

Distressed Inventory

Extreme inflation means many will no longer be able to keep up financially. At least unless they are also benefiting from COVID and the shifting economy. Such as  startup entrepreneurs, CEOs of big business, and real estate investors. That means the potential for millions more falling late on housing payments. This could provide much craved inventory for real estate wholesalers, flippers and landlords.

With the right marketing, connections and pitch, you can help out these property owners, help them exit to somewhere they can afford, and be well paid in the process.

 

There is great news for real estate wholesalers who are looking for more inventory. Zillow’s collapse also means that it is shedding thousands of properties for less than they paid for them.

Zillow’s Flawed Products Finally Catches Up With It

There are certainly many real estate investors who are cheering the recent announcement that Zillow is imploding. They have plagued the market for years with a horribly broken data tool.

It turns out that same tool has now finally been their own downfall. After going all in on house flipping, they have announced that their inability to calculate house prices has effectively put them out of business. Effectively wiping out $30B in market value for stock investors, and leading to layoffs of at least 25% of their team.

Without house buying, a Zestimate and data business, and having continued to lose hundreds of millions a year, despite billions in sales leaves little of a company left, if anything.

Zillow’s Implosion Vs. House Flipping

Where Zillow failed many others are thriving and are experiencing their best years in real estate ever.

Obviously, understanding your property values, to make smart offers and re-market them well is absolutely pivotal to success. Something Zillow has finally admitted it simply cannot understand.

Aside from understanding property values, you also have to have a business model that works, and to add more value than others. Yet, Zillow Offers neither offered a great process for sellers, or offered competitive rates. In fact, they tried charging sellers far more in commissions than full priced Realtors.

Fortunately, now regular wholesalers not only get to enjoy less competition in the marketplace, but also the opportunity to scoop up thousands of properties the failed internet company needs to sell at a discount.

Lots More Inventory Coming Down The Pipe

Zillow will probably prove to be just the first in this domino chain. Other large iBuyers and their backers will probably take note of this, and feel better about admitting defeat or will be scared off as well.

That could mean tens of thousands if not far more in discounted deals coming. While investors with capital are going to be looking for new ways to buy into this space.

Now is the time to develop relationships and position yourself to get these deals.

When you sign them, we’re here to fund your deals for you...