2021 projects an unknown real estate future. Then again, every year is an unknown.
The tarot cards and crystal ball all indicate the planets are lining up for a real estate fiasco this year and into the next couple of years.
We still have a COVID issue going on, a vaccine that many people are hesitant to line up and get, and a new far left leaning government for the next 4 years.
We are looking at a ballooning real estate bubble that could potentially pop at any time once lenders get the green light to start filing foreclosures against defaulting homeowners.
Here's my list of what you can do as an investor to pick up properties.
1. Get to distressed homeowners before the lender can close on a foreclosure. You don't want to be trying to buy a foreclosed property on the courthouse steps or as an REO. Lenders will want market value for those properties.
2. To locate distressed homeowners, there are online services that you can sign up for that will get you that information. The cost varies from company to company.
3. Educate homeowners on the importance of saving their credit. Once a "foreclosure" gets on their credit, they will have a hard time even to qualify to rent an apartment.
And once a lender forecloses, the problems for the homeowner are not going to just go away. Lenders will sell off the bad notes (loans) to creditors. And those creditors will hound the homeowner for years trying to collect any money they can.
4. Offer the homeowner some sort of incentive. Money for moving costs. Arrange a moving truck for them. Work with other investors and real estate agents to get an apartment for the homeowner.
5. Get the property owner to sign an agreement to be able to talk with their lender.
6. Get the owner to deed the property over to you. This can be done by quit claim deed and some states allow for assignments as a form of transferring ownership.
7. Once you have acquired a property, have cash on hand or access to cash to bring the defaulted mortgage current.
8. Don't be afraid to talk the the lender and try to negotiate a deal to bring the defaulted amount current. WARNING, be careful in disclosing that you have taken over the property. Use your best judgement on whether to disclose or not. I say this because most if not all mortgages have a "due on sale" clause that the lender could use against you to get the loan paid in full. For the most part, the lender will be happy just to get the defaulted amount paid up and start getting payments again.
Have fun and happy hunting for properties.