Where To Find $100 Billion In Discounted Real Estate Deals
By Paul Esajian on April 27, 2015
Looking for discounted real estate deals?
Last year some real estate investors began complaining that inventory was shrinking. They said it was hard to find deals. However, according to data, there were over $100 billion distressed properties at the beginning of 2015. That’s a lot of properties to pick from.
More Real Estate Deals Than You Can Handle
There are more real estate deals out there than you can handle. There are more distressed properties out there than the biggest hedge funds can take on. According to U.S. bank data compiler DistressedPro, there were some $150 billion in REOs and distressed properties as we rolled into 2015.
In addition to this, RealtyTrac reported a surge in foreclosure activity in February 2015. Many parts of the country have seen foreclosure filings rise, and banks repossessing more properties. In some areas, this has been as dense as 1 in every 80 or so housing units. This is on top of the last 10 years of foreclosures. This is all in addition to tax sales, probate and estate properties, and other types of distressed and motivated seller home listings.
Still think that there isn’t enough deals out there?
Vast Real Estate Opportunities and Challenges
There is no shortage of properties on a national level. There may not be as many as you’d like, at the prices you’d like, in the area you would like all at the same time. The US real estate market is improving. And that’s a good thing. We’ve been spoiled for bargain basement priced properties for years. But that had issues too. A rising market is better. It can bring competition and higher asset prices. But it can also bring more gains.
The current real estate market offers great opportunities for all types of real estate investors and strategies. Wholesalers, rehabbers, landlords, note investors, and builders can all make a great living in this market. It may take a little work. You may have to scout harder for deals. But don’t underestimate the opportunity.
Not Every Distressed Property is a Deal
Not every foreclosure, short sale, auction, REO, or home with a motivated seller is a deal.
There can be many challenges which hamper efforts to buy distressed property. Not every seller is realistic about what their property is worth. Some can’t even sell. Many properties are tied up in limbo. Some are overpriced. Some would be cheaper to tear down than to repair. But there are plenty of properties with profit potential.
Bargain hunting real estate investors have certainly noticed that there still a large pool of cheap properties available. Even in major US cities where some of the highest profits have been made flipping houses, there are still cheap properties. They may not be going for $100 very often. But $20,000 maybe. Even if you are under $100,000 that’s dirt cheap by many standards. One of the biggest challenges with some of these properties is that you often find both the property and neighborhood is distressed. Investors that want to provide good housing may find a lot of rehab work needs to be done. Some homes might be better off cleared and replaced. Some of these neighborhoods can be scary for some real estate investors. All of these factors can actually work to the benefit of the brave few that will take them on.
This is important work. Unless major cities are to be deserted, and giant swathes of the country are to be left to ruin or go back in time to the Wild West, they need to be tackled. Many of these properties can pay for themselves in rent within a couple years. Then they can go on to provide a lifetime of passive income and cash flow. All while going up in value.
Rehabbing these properties can bring many rewards. Beyond the profit it can mean dramatically changing the lives and financial futures of tenants, end buyers, and their entire communities. The impact can last and grow for generations. Isn’t this something worth aspiring to be a part of?
Of course this does require doing things right. Taking short cuts will only take away from your work. Do quality repairs and renovations. Build in sustainability. Create safe environments.
Summary
There are more distressed properties and deals out there than anyone can handle. If real estate investors are willing to make a little effort, and be flexible in the destinations they invest in, there are endless opportunities to be had. There will be some beautiful homes, luxury properties, and even some brand new ones in the mix. There will also be some ugly houses. These present both challenges and some of the best rewards. If tackling the most distressed properties in America isn’t for you, consider buying from a wholesaler that has already done all the hard work. Or opt for turnkey investing.