Housing inventory is fading fast. Some areas are experiencing over a 60% drop in supply with REO listings plummeting 81%, meaning the rush to grab discounted deals is heating up rapidly.
Investors who want a shot at low priced acquisitions for flipping need to move at lightning speed. True real estate investing pros will have specific criteria laid out for evaluating deals and have an intimate knowledge of their area so they can make offers immediately when opportunities arise.
You’ll have to be able to beat out the real estate agents who are swarming all over homeowners out there, slashing their commissions, boosting their direct mail campaigns and throwing cocktails to seduce would be sellers into signing listing agreements.
Many homeowners are still paralyzed with fear even though foreclosures are looming closer, some are holding out in hope of rising prices and others still are just digging in their heels and deciding to stick it out where they are.
This doesn’t mean talented real estate investing pros can’t close these deals and negotiate great prices on them, it is just going to take the right pitch and often coaching them with the hard math which clearly shows the time to sell and move is now.
Those who are underwater are running out of time to take advantage of the cash back and tax incentives of doing short sales which could cost them many tens of thousands if they wait. Plus they need to recognize that while home prices are still falling on a nationwide level rents are rocketing by close to 13% a year in many areas. They need to get out now, grab what cash they can and lock in a good lease until they can buy again.
Those who do have equity need to be made aware of just what a huge opportunity they are missing out on buy not trading properties now. This is the opportunity of a lifetime to upgrade or even downsize. In some cases it may mean taking ‘one step back to make two steps forward’, which can be hard to swallow but it’s the truth.
Waiting for their equity to bounce back is nonsense in most cases and some just don’t understand the disparity between the percentage homes have dropped and the length of time it will take for equity return even at the same digit percentage increases. Show them the difference and how they need to make the move to get back on track and enjoy the booming equity their neighbors are now.