It’s been a decade since it happened.
Is there still a glutton of inventory in the marketplace after the real estate fall out of 2008?
Last week we talked about how flipping houses affects the economy and visa versa (to read more <CLICK HERE>). This week, let’s take a look through a different lens.
The effects of the worst financial crisis since the Great Depression still impact our world a decade later. An article put out by USA Today stated, “By one Federal Reserve estimate, the country lost almost an entire year’s worth of economic activity – nearly $14 trillion – during the recession from 2007 to 2009.”
In many ways, the country is still struggling to recover.
On February 2nd, 2018, “The Dow closed down 666 points, or 2.5%, its biggest percentage decline since the Brexit turmoil in June 2016 and steepest point decline since the 2008 financial crisis,” according to CNN Money.
Additionally, Economy and Markets made a strong argument that another upset is coming, and with it, more single family residences will return to the investor market.
But what does this mean for you and the inventory of distressed and abandoned homes left on the market today?
After all this time, are there really enough properties left for every real estate investor to make money on with buy, fix, and resell opportunities?
Each market is different. Some have fully bounced back while others are recovering slowly with a large number of distressed homes existing as a residual from those events. But the key is to realize that the current amount of investor properties is not based solely on the remnants of the housing crisis, but rather an ongoing depletion of care given to individual properties by a wide variety of owners in a multitude of situations.
Essentially, we’ll never have a shortage of potential investment properties as long as rentals aren’t being uncared for, family homes go neglected, owners that move out of state can’t sell their old homes, and folks fall victim to foreclosure.
Sure, a decade later, we could still have properties on the market that have investor potential left over from the deep persistence of the financial crisis of 2008, but if you’re banking on the lingering effects, you’re not looking hard enough at your own neighborhoods.
HOW DO I FIND THEM?
Finding prime investor real estate usually comes with a preconceived notion that it has to be done at auction and you must be loaded down with cash in order to get in the game.
While auctions can be great a place to find properties, even auctions come with predetermined biases that can be largely untrue. If you’re interested in learning how to make the most of your auction experience, <CLICK HERE>
And to learn more about good auction practices, <CLICK HERE>
What happens if no one bids on a property at auction? What happens to the house and how can you benefit? If you’re unfamiliar with the process of REOs, <CLICK HERE> to read more.
This is not a new strategy. It’s been a buzz word since the recession of 2008, but many investors are beginning to shy away it thinking that it’s an outdated strategy. They’re wrong!
To read more about what a Short Sale is and how you can find homes using this strategy, <CLICK HERE>
There’s a way that you can get homes before they go to foreclosure auctions, save money, put money in the homeowner’s pocket before they lose their home AND you don’t need your own cash to do it!
Sound too good to be true? <CLICK HERE> to find out more!
Buying Distressed Homes
Sometimes, finding homes to purchase is as easy as knocking on a few doors. If you’d like to bypass your competition by doing something that most people find uncomfortable, read how I do it with ease, <CLICK HERE>
But don’t work with distressed home owners blindly. To maximize your chances, <CLICK HERE> to read the Dos and Don’ts of working with these homeowners.
Buying Vacant Homes
You can also find the owners of vacant properties without having to break the bank or pretend to be Sherlock Holmes. We’ve got the steps for you, <CLICK HERE> to learn them all.
I’ve saved the best for last.
A nuisance house is a condition of use of a property that interferes with neighbors’ use or enjoyment of their property, endangers life, health, or safety, or is offensive to others.
Under the Abandoned Property Rehabilitation Act, abandoned properties are presumed to be nuisances because of their “negative effects on nearby properties and the residents or users of those properties.”
More important than what a nuisance home is, is the opportunity such homes create for investors like you. As a newly developed strategy to unlock your buying potential of these properties, the Lee Arnold System of Real Estate has begun teaching the acquisitions strategies that are pulling investors to the top of their markets in a single bound.
To read more, <CLICK HERE> or call us at (800) 473-6051 to sign up for the next Master Lein Abatement Specialty Lab to find out how you can be the “go to” investor in your area to get these properties for pennies on the dollar.
HOW DO I FUND THEM?
So the real question remains: how do you fund these deals when you find them?
Banks won’t lend on these properties–they don’t want to lend on properties that are in disrepair and are typically looking to lend to the owner-occupant. Most people don’t have enough liquid capital lying around to pay for the property and renovations. I’ve certainly seen people try to fork all the bills on their own, only to tap out in frustration and never see the project fully complete.
That’s where we come in.
If you’re an investor who needs to get money for a property, your answer is Cogo Capital where we provide the funding solution for investors like you.
We identify what a good deal is, we vet out the loan, order the appraisal and the title of the property. Then, we make the loan available to our investors, and they get to put their money into your deal. It’s the quintessential peer-to-peer lending platform, which, in the ever-calming (hopefully) wake of the banking crisis has become mainstream.
Now, some companies lend this way from a consumer lending standpoint – think credit consolidation and the like – but the trouble with using lending like this for real estate is that it’s unsecured.
Lending through Cogo Capital is secured against first position on real property, which has proven successful for not only the investors lending the money (it’s the CIRCLE OF WEALTH) but also for the real estate investor like you who are borrowing money to purchase and fix more properties.
We also don’t care about your credit score and past financial history as much as banks do because we do what’s called “Asset-Based Lending,” where we look at the value of the property and the amount your paying for it. Then we determine if this is a safe loan and if you’re going to make money. We want to help you buy 8, 10, or even 12+ properties this year.
We want to help you get in and out with money in your pocket so you’ll come back and do it again and again.
Your risk timeline is also reduced compared to a traditional bank loan. We essentially loan you enough money and give you enough time to fix up the property, market it for sale, and sell it, at which point our loan is paid off, the investor gets their money back, and you make a profit.
The best part? You now have money to do it again, and we’re going to give you better rates as a returning borrower.
“But what if I can’t sell the property in the time frame of the loan?” you ask?
Well, that’s a great part! We’re not in the business of owning real estate; we’re in the business of facilitating resources to those who want to invest in real estate.
So if we provide a loan to an investor who isn’t moving a piece of property on the market as quickly as they expected, then we do our due diligence. We assure that the investor has done well with their payments and have improved the value of the property, and reevaluate the terms of the loan based on that. At the Lee Arnold System of Real Estate, we also teach and strongly encourage various exit strategies.
Yours in Success;
Lee A. Arnold
The Lee Arnold System of Real Estate Investing