OfflineHome prices drop into double-dip territory. As I have been saying for months, home prices are going backward into the double dip territory. You can read the entire article here:
http://www.msnbc.msn.com/id/43222187/
Poor economic conditions and an oversupply of foreclosures are going to keep this problem with us for years (2014 is my estimate). Can you make money in this climate? Sure, but you need to know what you are doing.
Also, the American love for home ownership is waning as the percentage of Americans owning a home are retreating as I write this. Expect the percentage of owners to decrease to a point where it was in the 1980s. This means less people to buy homes and less people willing to enter into a lease/option.It does mean that there may be more people willing to rent homes, but you have to have a product they want to rent. Competition will be fierce as there are too many investors that will be going to "plan B" and rent their homes because they cannot sell it.
This Spring selling season for Realtors has been a bust and because of it, people will get antsy and start walking away from their homes again this Fall and/or just selling them to get out from under their obligations.
Of course, you can make money here by being a buyer, but you need to have the cash flow to carry you through vacancies so you don't lose your money too.
As always, be smart and be careful.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
for the heads up.
Home values have been dropping here at 1% month+....=10 months $10k+ on a $100k home.
Better refi NOW
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
very perplexing situation for us raw investors who have been learning formulas and tactics for the existing market. How much will this affect the widely accepted notions about what margins constitute a good deal? Is a maximum 65% of FMV less rehab, closing and funding cost still viable? Evidently it has to be adjusted for us wholesalers, so what in your opinion should it possibly be adjusted to? This is the information we must have to stay aware and ahead of this fluid market. Thank you sir for this heads up and for any advise you may have.
Steve
We seldom get what we want, but we will always get what we expect.
If you are wholesaling you are dealing with the market in the next 90 days or so. So it is critical to determine what your subject property will sell for in 90 days. I still use the 65% mark minus the rehab/remodel costs needed to bring the quick sell ARV you are projecting in the next 90 days. The percentages will stay the same, the quick sell ARV may get lower.
Michael Mangham
MD Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
Bill,
Thanks for keeping us up to date. It's greatly appreciated.
Cheryl & Dave
Mike is right about the percentages, it's just that the base value will continue to slide so you have to be quick with your holdings. If not, you might find yourself buying a $100K home for $65K (65%) but since the value is dropping having your percentage rise (ARV drops to $90K, your purchase price rises to 72%) Anyway, you'll start to squeeze your margin so you have to get rid of them quickly.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
I don't think I understand how this will affect wholesalers? Does this mean that we will not be able to wholesale anymore? So may need to start thinking about buying and holding? I am just not understanding what this is going to mean for wholesalers.
to keep doing what you are doing. Just be aware that the prices are still slipping. If you have a good deal.....lock it up. But get rid of it quickly so you aren't left holding the bag when the music stops.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
What about wholesaling as a whole? Do you think we may still be able to wholesale until the prices start rising again or no? I am asking b/c I just got started and haven't even done a deal as of yet. Just wondering is this something I can do for the next 6-12 months or not? If not, this throws a monkey wrench in my plans. I have to come up w/ a Plan B for REI.
There will always be wholesaling going on. You must buy at the right price! If you can buy and hold, do that also!!
Michael Mangham
MD Home Acquisittions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
Bill,
good article; I see the prices dropping even around here in the Bay Area...
you are right, we have to be smart and careful... do our due dilligence
Wishing everyone success,
Valerie
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...
Bill this article is totally correct. I do BPOs for banks and i have seen an increase in BPOs the last few weeks which means that more people may be in trouble with their mortgages. I recently received a call from a home owner behind in payment and variabe mortgage. I believe this is still happening to many people. This person was looking for help, and we are trying to help them before they go to foreclosure.
Employment is getting slighty better, but there are still people with many variable mortgages they cannot afford, so this REO maret will continue to go on and we all have the opportunity to help otherd.
Tom and Jeri
www.TuCasaInvestors.com
www.TuCasaRealtyllc.com
I appreciate the information and 2014 does not surprise me. It will be good news for me due to credit issues. I definitely want to buy and hold/rent long term and assignments for fast cash. I have heard of the strong possibility of double dip. Thanks again for your input.
words of wisdom. So....dont panic just make the adjustments you mentioned. I was afraid this ole dog was going to have to unlearn some stuff I "just learned". LOL
Anyway, just a note to you and other friends of Jon Lubin. He was involved in a car accident a few days ago that totalled his truck, and bruised him up but he walked away. It slowed the young man down a little, but he is going to be fine. Yall give him a shout out.
Steve
We seldom get what we want, but we will always get what we expect.
Your insight is duely noted and your advise is muchly appreciated. I noticed you posted on FB that you were going to slow down on the blogging (just dont quit)! So, I was just thinking, is adding the FB app to your cell phone gonna help with that? LOL You do a great job Bill of spreading the knowledge.
Steve
We seldom get what we want, but we will always get what we expect.