How can distressed buyers and sellers be helped by real estate investors in 2015?
There are still a lot of distressed properties all over the US, despite rising house prices and new construction, although real estate investors are helping distressed sellers and buyers.
Finding the Sellers
The increasing speed of the foreclosure process and the increased competition has meant that many real estate investors have believed it to be more difficult to find distressed sellers. This is despite the fact that billions of dollars are tied up in homeowners struggling to make their mortgage payments, pre-foreclosures, auction properties and REOs. Some effective ways to find who is holding all this inventory and then connect with them include
Contacting and networking with local realtors and bank managers
Reviewing public records and buying lists
Using email, social media, direct mail and online forums
Having purchase offers accepted
Helping HR departments with corporate relocation
Searching for distressed properties by driving around
Connecting with distressed sellers and persuading them to accept your offer is perhaps the most difficult thing, according to many real estate investors. This is made even more difficult because many sellers are disillusioned or wary of trying to ask for help, having been ignored or seen a transaction fall through.
Of course, everybody should be careful of not getting involved with a mortgage or real estate scam, but there are steps that real estate investors and others in the industry can take to address the issue. You can help to change the opinions of sellers by speaking in public, writing articles and blogging.
Helping distressed sellers, even those who are underwater on their loan, have little equity, or have had a pitfall in the past, is possible, and real estate investors can and should help in creative ways. Some options that can make deals seem appealing to an investor as well as lower tax liability include owner financing, wrap around mortgages, subject to structures, and lease options.
Real estate investors can also overcome the objections of sellers by making the seller appear more confident, and helping them to realize that they have just found the perfect solution to their real estate headache. As an investor, you may have a strength or advantage such as a proven track record, an adequate supply of cash or the ability to offer a quick closing. Take advantage of social media, blogs and real estate websites, as well as positive testimonials to convince a distressed seller that you really can help them.
Helping Distressed Buyers
The pressure to buy a home can be particularly strong for many people, including millennials having a family, newly graduated students and parents wanting to have a nest egg. Increased rents and even higher house prices lie in wait for those who drag their feet and don’t buy their own place to live, and buying now also has the twin advantages of lower mortgage payments and low interest rates. Peer pressure applies to owning a house as much as it does to other areas of our lives, and nobody wants to be left behind renting a home when everyone else is enjoying the security of home ownership.
There are several factors that can cause buyers to become distressed, despite wanting and needing to invest in real estate
A lack of credit history, or a low credit score
Not having enough money for a down payment
High rents mean that it is difficult to save up enough money for a down payment
A lack of response or poor communication from realtors and other real estate professionals
Helping distressed sellers and buyers is possible, and as a real estate investor, there really are steps that you can take to change the minds of both buyers and sellers and perhaps reverse any preconceived notions. There are resources available to help both buyers and sellers who need it, and investors can help to make these resources available and accessible. You can also help to create a scenario in which everybody wins, by matching buyers with the distressed inventory available around the country.