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.

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.

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?

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.

What’s in store for real estate wholesalers in 2024?

Once again, the main theme of the year may be uncertainty. At least on the macro level. As well as especially when it comes to home prices and conventional retail home buyer activity.

However, what we do know for sure is that there are several factors influencing the economy and real estate in particular. As well as the opportunities they are likely to create.

Though it may not be until after the 2024 presidential election that real estate pros enjoy more clarity on the direction of the economy and property market, and are able to best plan, strategize and forecast their finances for the following four years.

Factors Impacting The Market For 2024

In 2024 we can expect to see the following factors influence the real estate market:

The impact of recent high inflation on living costs.

Living in a period of high interest rates.

AI and fast rising unemployment.

The ripple effects of escalating consumer distress.

Volatility in the stock market.

A high probability of new national or global crises.

Opportunities For Real Estate Wholesalers In 2024

The above is going to show in through a variety of opportunities for real estate wholesalers.

Firstly, we can expect a lot more distressed property acquisition opportunities, with highly motivated sellers who need to sell very fast.

The wealthy who are benefiting from recent trends will need to put more of their money into real estate to protect it. Both in the form of luxury residences and income properties.

Among the millions of those being negatively impacted by these trends will be many who need to get into real estate to make up for lost income. This may create a whole new pool of end buyers, partners, and potential workers for your investment business.

Take advantage of our 1% Fall interest rate deals, and get your proof of funds to start doing more deals today…

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.

More and more countries are developing their own Digital Nomad Visas for the new remote workforce. How might this change alter where people live and work, the dynamics of rentals and real estate? Where might you want to travel and work from as a real estate wholesaler?

Digital Nomad Visas

Now that the workforce has changed to being remote first, more and more people are wanting to flex their new found freedom to travel and work from new places.

With other recent economic changes, many individuals are also being forced to find friendlier and more affordable places to live and work too.

According to one list, at least 58 countries now have some form of Digital Nomad Visa. A type of immigration visa which allows you to go live and work there remotely. Often for between 6 months and 3 years.

The entry requirements and fees for these visas are far lower than for traditional visas and residency programs. You normally just have to prove you make a minimum amount of income each month, or have enough money in the bank to sustain you while you are there. This can range from a few hundred dollars a month to several thousand Euros.

Countries are seeing this as a way to boost their revenues, popularity, and to attract great talent.

Why You Should Try It

While there may be some perks of wholesaling properties in your own backyard, travel is a common thread linked to success in entrepreneurship. It is also completely unnecessary to restrict yourself to only operating locally anymore. If not highly risky.

Travel can give you new perspectives on things, and great new ideas. It can broaden your network and contact database. Then you might just find somewhere you love more for the weather, culture, and which allows you a better quality of life, at far lower costs. Taxes are complicated, but there may also be benefits there too.

Where To Go

In reality, most countries will allow you in on a tourist visa, or just as a tourist without a visa for 3 to 6 months anyway. So, you don’t have to restrict yourself to countries offering Digital Nomad Visas. The US does not currently offer one.

You may want to explore:

Croatia

The Bahamas

India

The UAE

Nicaragua

Cyprus

Greece

Spain

Portugal

The Impact On Real Estate

The current direction of the economy, the AI revolution, and the availability of Digital Nomad Visas all seem to be working together for remote work to have an even bigger impact on real estate.

Even in the US, where we may not see such a visa, we can expect this trend line to impact how cities market themselves and how much of this business they will win. For landlords, it may mean more short to mid term tenants, and professional tenants. Whose needs are also different. They need furnished places with good wifi. They may pay a range of rates from dirt cheap to higher Airbnb prices. Though they are going to pay based on what they can afford in monthly rent, not vacation prices.

Consider how this may influence your real estate wholesaling business, your pricing, and where the hot places to flip houses will be next.

Then take advantage of our 1% Fall Mega Sale, with interest rates on your funding as low as just one percent. Check out the details here.

New data from Zillow and Bloomberg shows that as many as 90% of home buyers are now factoring in climate and natural disaster risk to their choice of where they are buying a home.

How might this impact the real estate market? How will it affect property investors? How can you stay ahead of it, and use it to your advantage?

Climate And Disaster Risk

The data shows that nationally 83% of buyers are weighing this factor in their home buying choices. Including hurricanes, flooding, wildfires, droughts, and extreme temperatures.

Many are just tired of dealing with the same issues every year, and seeing their lives interrupted, or homes damaged again and again.

Others are just thinking forward as they try to make the best home investment possible.

How Will It Impact The Market?

The most obvious answer is that this shift in awareness and decision making will alter where the most volume of demand is for home purchases and investment properties.

However, a Zillow survey interestingly shows at least one quarter of respondents reporting they are actually moving to a riskier, rather than safer area.

This may be primarily due to other drivers in the current market. Such as rising crime in some cities, and lack of affordability in Northeast states.

We may see old high end housing markets continue to become more dominated by second residences, with buyers choosing primary residences in safer and more affordable areas.

It is not just about geographic risk either. A lot of it is also about specific properties. For example, choosing newer inventory that has been built to higher standards, and at higher elevations. Which in some areas is causing issues and potential devaluation for existing older homes that are now flooding due to run off from higher neighbors.

Staying Ahead Of The Curve

As a real estate investor it is vital to evolve with market shifts like this.

It may influence where you target making real estate offers in the next few months and years. As well as the types of properties you are targeting, and how you formulate and price your house offers.

No matter where you are buying and selling homes, use this as a big highlight in your marketing. Point out security features, like new hurricane shutters, adherence to new building codes, and where your listings have low risk levels compared to your competition.

Check out our 1% interest rate MEGA SALE now, and submit your Funding Request to get your next deal done.

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!

The Federal Reserve just raised rates again. What does it mean for real estate investors?

The Fed continued their rapid interest rate hike spree in December. Although this smaller half point hike was not as severe as the last one, it continues the trend, without having allowed time for the data to be published on how well previous hikes have achieved their stated objective.

Inflation

According to the Fed, the purpose of these rate hikes is focused on bringing down inflation. While it could tame some spending, higher rates typically also drive up the true cost paid for things. Which may be actually fueling inflation, rather than ending it.

Unemployment

Among the commentary on this latest rate hike is a fear that the Fed is committing to a period of high unemployment as they force employers to cut jobs.

This could be a very bad time for millions to lose their jobs. Especially with record amounts of credit card debt, and other debt which is subject to seeing repayments rise as rates go up.

If we do start seeing unemployment rise, then there will certainly be a rise in distress, and quite likely more mortgage defaults. At a minimum it should mean more motivated sellers eager to unload their homes at any number and terms possible.

Stocks Plummet

In response to the most recent rate hike 96% of the S&P 500 stocks fell immediately after the news.

That suggests investors in public stocks, including fund managers do not believe that the Fed’s monetary policy is sound, or taking the economy in the right direction.

On the bright side, when the stock market fails, many investors shift their capital to real estate. Which supports more competition and higher values. Given this comes in tandem with the crypto crash, we may see even more flight capital headed into real estate this year. Providing great exits to investors who are also capitalizing on distress caused by rate hikes.

The Stimulus Wild Card

If the economy does suffer from these rate hikes as some suspect, then there will certainly be calls for more stimulus money and bailouts to get us out of that hole.

This would in turn fuel even more inflation. Which would also be good for landlords and their rents.

Summary

While we may face an uncertain year ahead, there are plenty of side effects of rate hikes and follow up policy which could help real estate investors.

This is especially true for real estate wholesalers who have limited exposure to interest rate costs, and are not exposed to price volatility.