Some are concerned that the current U.S. government shutdown could take some of the wind out of the current housing recovery, but could it really increase deal potential for real estate wholesalers?
The main concern among the pessimists is that a skeletal government staff will hamper government backed loans being processed and approved, as well as prevent lenders from completing required and intelligent due diligence in order to close loans. This may well derail some closings and throw sellers back into the pool, more eager than ever to cut a deal.
The above will likely be short lived. However, the shutdown will also put many workers behind on if not out of paychecks. Many of them could then default on their rents and mortgage payments causing a new round of mortgage delinquencies and foreclosures.
This factor will certainly add fuel to the level of inventory those wholesaling houses have to work with and create a lot of motivation among all sellers to act quickly.
Some may question whether this will slow the recovery on the flip side but this is unlikely. For as much noise as the media and politicians are making about the shutdown or ‘slim down’ this isn’t the first time it has happened, and could easily be turnaround at any hour.
Plus, with the stock market taking a hammering and faith in government investments in the toilet more individuals and groups will certainly be plowing their cash into bricks and mortar for safety, if not better returns. This runs the gamut from regular individuals to wealthy investors, equity firms and foreign investors.
Many government workers may also be waking up to the fact that if their employer can’t afford to keep them on long term it’s time to find another source of income. All political bickering aside, even a middle school student could probably deduce that the current weight of government payroll isn’t sustainable. The result is pushing many of them to investing in real estate as the only option to keep afloat. Many may also be coming in with sizable retirement savings which could be used to buy rental properties; providing a new round of cash rich end buyers for wholesalers, or at least money to be borrowed from new private mortgage lenders.
The shutdown probably won’t last long, but those that move fast can definitely find a silver lining when it comes to wholesaling houses.
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