Wholesaling Foreclosures for 2013 and Beyond
What’s ahead for real estate investors wholesaling foreclosures?
Will there still be enough foreclosures to keep flipping in 2013, where will the most be found and what other changes do investors need to be monitoring?
Freddie Mac’s chief economist recently delivered his forecast for the year ahead in the housing market. While he predicted growth in housing starts, home prices and home sales he also noted that foreclosure activity remained high, but that public access to bank owned REOs may be limited.
So that means there are plenty of distressed deals to come. However, forward thinking wholesalers will be looking for more creative ways to get their hands on them versus relying on foreclosure auctions and hitting banks for REOs.
In those areas hit hard by hurricane Sandy mortgage defaults are now four times higher than average. In addition to this surge in foreclosures in NY, NY and CT, mortgage servicer LPS reports the highest level of delinquencies in FL, NV and MS.
While many have criticized the new $8.5 billion mortgage settlement for giving banks a free pass and killing off reviews of bank practices it could provide residual benefits for wholesaling foreclosures by putting more money in the economy as wronged, displaced homeowners are sent checks and others receive debt forgiveness; creating more equity in distressed deals.
Watch out for a huge surge in international and domestic investment this year with over 80% of foreign investors planning to boost their acquisitions in the U.S. While there may be challenges to working with overseas borrowers this is a great market for wholesaling foreclosures.
Major shifts in industry are resulting in mass relocation too and this will shift chunks of the population to new locations creating a dramatic upswing in transactions.
However, while some industry trends are pretty predictable it is also a scary time for all Americans as we enter a new executive order era. According to recent presidential statements on the debt ceiling and gun control the current leadership makes no excuses for refusing to negotiate or utilize the normal system of passing new bills. This means any orders can change real estate trends from gun bans to redistribution of wealth. So stay on top of what is being said, know what the current administration’s goals are and anticipate them being drafted in over the next three years one way or the other. Recognize how that will create new opportunities for wholesaling foreclosures and what challenges it could bring.
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