Episodios

  • Sellers Are Capitulating

    Sellers Are Capitulating
    Oct 28 2025
    🎙️ The Investing in Real Estate Show Sellers Are Capitulating Hosted by Lex Levinrad Hey everyone, and welcome to the Investing in Real Estate Show. I'm your host, Lex Levinrad, and on today's episode, I want to talk about what's happening right now in the real estate market — because things are changing very rapidly. For the first time in a while, we're beginning to see signs of capitulation. Now, capitulation is a term that comes from the stock market. It describes the point when investors give up — when stocks have been falling and people finally throw in the towel and start selling. We're starting to see that same kind of behavior in certain areas of the real estate market today, and I expect we'll see even more of it in the months ahead. Year-over-year, foreclosures are up 17%, bank-owned properties are up 34%, and there's a noticeable increase in short sales, pre-foreclosures, and REO listings on the MLS. Many of my students are now finding deals on auction sites like Auction.com and Hubzu.com, and I believe that trend will continue throughout the next year or two. So, the big question is: Where are we in the cycle, and where might the market bottom out? Historically, the real estate cycle runs about 18 years — roughly 13 to 14 years up, followed by 4 to 5 years down. If we peaked around July 2022, then that would suggest a bottom sometime between mid-2026 and mid-2027. Now, real estate is hyper-local. Condos behave differently from single-family homes, and markets like South Florida don't move the same as the Midwest. Condos in South Florida, for example, have been hit hard — partly due to the unresolved Surfside law, with only about half of buildings having completed inspections. That's why, in our training programs, we focus primarily on single-family homes. It's also important to understand that not all single-family markets are the same. The $350,000–$400,000 "median" home that a typical family buys is a completely different product from a $150,000 starter home — and both are worlds apart from the $5 million waterfront properties here in Deerfield Beach. The luxury market remains relatively resilient because those homes are scarce, and many are purchased with cash by wealthy buyers. But that's not the market I teach or invest in. My focus is middle America — the average family earning $70,000–$80,000 a year, buying a modest 3-bedroom, 2-bath home. For that family, affordability is the key issue. At today's prices and rates, that household can typically afford around $2,000 to $2,100 per month, including taxes and insurance. The challenge is that, with 11 rate hikes since 2022, those numbers often don't make sense for buyers — it's often cheaper to rent than to buy. For affordability to return, home prices and interest rates both need to drop by about 20%. Now, the economy itself is in a strange place — a mix of stagnation and inflation. We've got gold, silver, and stocks rising while more Americans are falling behind on car payments, credit cards, and mortgages. It's a divided economy — the haves and the have-nots. The wealthier segment owns assets like real estate, stocks, and Bitcoin. But 75–80% of Americans fall into the lower or middle-income bracket, and they're feeling the squeeze: higher rents, higher food prices, higher everything — without matching wage growth. We're also seeing record levels of credit card and auto loan defaults, and foreclosures are climbing. Many people are struggling to keep up with mortgage payments, and businesses — including trucking companies — are shutting down at record rates. Given that, I believe the Federal Reserve will have little choice but to cut rates soon, even if inflation remains a concern. Now, let's talk about what this means for real estate investors. Some markets — particularly in the Midwest — remain relatively steady. They don't see huge gains, but they also don't experience massive losses. In contrast, "boom and bust" states like Florida and Texas swing more dramatically in both directions. For example, in markets like Austin, Texas or Phoenix, Arizona, we've seen homes that sold for $420,000 just three years ago now selling for around $240,000 — nearly half the price. In parts of Florida, such as Cape Coral, prices and rents have both fallen, while insurance and property taxes have risen — squeezing investor returns. So, what works right now? The answer is simple: focus on affordability. Forget the luxury market, forget high-priced areas, and concentrate on properties with an ARV (After Repair Value) of $300,000 or less. If you can buy at 60 cents on the dollar, that means targeting homes you can purchase for around $180,000 that are worth about $300,000 fixed up. That's where my students are finding success. For example, one of my students recently bought a home for $105,000 in a market where comps were $220,000, and another paid $107,000 in that same market. We're not seeing deals like that ...
    Más Menos
    32 m
  • The Current State Of The Real Estate Market in 2025

    The Current State Of The Real Estate Market in 2025
    Sep 16 2025
    TRANSCRIPT: Hey everyone, welcome to the Investing in Real Estate Show. This is your host, Lex Levinrad. In today's episode, I want to talk about the changing real estate market. And I've got to tell you—things are changing quickly. I had a Boot Camp event a couple of weeks back, the Buying Rentals and Building Wealth Boot Camp. We were showcasing some case studies, and one of our students, Manny and Haley, had acquired a property for just $105,000 in Palm Bay. They decided to wholesale and flip that property. I was actually the buyer—I ended up purchasing that property for $110,000. Now, what's interesting is when I went to look at the property and the surrounding neighborhood, I saw three houses listed for sale on Realtor.com. One was listed at $270,000, another at $275,000, and another at $330,000. I looked at the ARV. They told me they thought the ARV was around $210,000 to $220,000. That's probably accurate. Let's say $220,000. At my previous Boot Camp, I even pulled this up on the screen and showed everyone how they found the house—by using Driving for Dollars and direct mail. Ironically, this house actually hit two lists: it was both on a tax-delinquent list and a Driving for Dollars list. Originally, they offered around $125,000 to $130,000, but they negotiated down to $105,000 and the seller accepted. Then they just turned around and flipped that house to me. So when I hear people saying things like, "You can't find deals right now," or "Fixing and flipping is dead," or "Rentals are dead"—I've got to push back. If you're only looking at surface-level information (what you see on social media or in an article), you'll never dig deep enough to see what's really going on. I actually made a public Facebook post about this about a week ago. I talked about how many investors were buying at the bottom of the market in 2009, when I was buying in Miami. Back then, there were about 300 investors active. Fast forward to the peak of 2022, and according to Redfin data, there were 4,400 investor buyers. The numbers correlate inversely: when the market was cheapest, the fewest people wanted to buy. When the market was the most expensive, the most people wanted to buy. On the surface that makes no sense, but if you study history, it makes perfect sense. Back when I worked on the trading floor in Chicago, one of the required books was Extraordinary Popular Delusions and the Madness of Crowds. It explains why people buy the most at the top and why no one wants to buy at the bottom. Think about it: Tesla stock at $200, then $300, then $400, then $500, and people say, "Man, I should have bought it." By the time it's at $800 or $900, they finally jump in—and then it crashes back down to $300 or $400. Same story with Bitcoin. Same story with real estate in 2006–2007, when people were lining up all night in Boynton Beach to buy houses. Why? Because people felt they couldn't go wrong—it had worked in the past. That's the fallacy: investing by looking in the rearview mirror. "It worked last year, so it'll work this year." But markets ebb and flow. For example, rental properties are normally priced when they sell at about 100 times monthly rent. At 200–250 times rent, they're overpriced. At 50 times rent, they're underpriced. At the peak of 2022–2023, many deals were selling at 250 times rent—clearly overpriced. During the 2008 financial crisis, we were buying at 30 times rent. We bought houses in Port St. Lucie—three-bed, two-bath homes—for $36,000 or $37,000 that had previously sold for $200,000, and they rented for $975 a month. That's instant cash flow. So why wasn't everyone buying then? And yet, when those same houses went back up to $325,000 or $350,000, then everybody wanted to buy. That's human psychology. Fast forward to today: I've seen these cycles over 23 years in real estate. We just turned the corner from a seller's market into a buyer's market. Inventory is up, prices are down, and sellers are slashing prices. Yet investors are fleeing. Why? Because they're listening to the noise instead of the numbers. At my Foreclosures Boot Camp in February 2022, there were only 15,000 houses listed on our local MLS. By February 2023, that doubled to 30,000. By 2024, it was 45,000. Today, it's close to 70,000. Inventory has quadrupled in just a few years. At the same time, prices have fallen 15–20% on average, and in some markets like Miami or Kissimmee, as much as 25–30%. That's a massive pullback. Yet most people still think real estate is "fine." They don't realize investors stopped buying in 2022—the hedge funds, Zillow, Opendoor, all the iBuyers—they pulled back first. The average mom-and-pop investor only started to realize in 2024 and 2025 that prices weren't going up anymore. That's why right now, this is a better environment to buy than it was a year or two ago. Deals at 60 cents on the dollar are increasing. But only the real buyers—the ones who understand value—are still...
    Más Menos
    19 m
  • The Opportunity With Section 8 Rental Properties

    The Opportunity With Section 8 Rental Properties
    Aug 15 2025
    TRANSCRIPT Hi everyone, welcome to the Investing in Real Estate Show. This is your host, Lex Levinrad. On today's episode, I want to talk to you about the opportunities in today's market with rental properties. We have a very unique set of circumstances that have led us to where we are now. The first thing we saw was the absolutely crazy increase in prices that happened after COVID, from 2020 to 2022. There was a huge jump—most areas increased at least 50%. In some areas, prices went up as much as 70%, 80%, even 100%. With this huge price increase, it became nearly impossible to find cash flow. It just didn't exist. But there was another thing that happened after COVID—a direct result of COVID—and that was the inflation effect. The government pumped a lot of money into the economy with EIDL loans and PPP loans, and people were flush with cash. This is one of the reasons prices went up so much. And it wasn't just real estate—everything went up. Even the prices of Rolex watches increased. There was simply too much money floating around in the system. The net result of that was inflation, which we were all aware of. Suddenly, rents were going up, along with the price of food, gas, and everything else. The concept of rents going up is very important. Regular market rents increased quite a bit. Looking at my own rentals, for example, a property that rented for $1,300 went to $1,475, then the following year to $1,550, and the next year to $1,675. That's a significant increase. I have a HUD Fair Market Rent tool on my website at www.lexlevinrad.com/hud. You can use it to see fair market rents. You simply select your state and city, and then you can view all the ZIP codes in that city. For example, if you're in Florida, you could choose Broward County, then Fort Lauderdale, and then view the rents HUD pays for a three-bedroom in each ZIP code. This tool works nationwide. One thing to note is that the number you see is the maximum amount, including utilities. If HUD lists the maximum at $2,100, my experience is that actual Section 8 rents end up around $1,900. I generally deduct $200–$250 from the HUD number to get a realistic rent amount. Before buying a property, I recommend calling the housing authority in the area. If you're thinking about renting a property with Section 8 in Deerfield Beach, Florida, for example, call the Deerfield Beach Housing Authority and say, "I'm a landlord with a three-bedroom, two-bathroom rental. What rent could I get for Section 8?" Even better, visit them in person. Many times, they have flyers or TV monitors showing current rental listings. You must first understand what you can get for rent because cash flow is your top priority when buying rental properties. Many people in real estate have heard the phrase "location, location, location." I think this is often misleading. You can buy in the best location in the world—even Beverly Hills—but if you overpay or it doesn't have cash flow, you'll lose money. Yes, location is important, but if you had to choose between a great location with a bad return or a less desirable location with a strong return, I would choose the strong return. For example, I lived in Boca Raton, Florida, for 20 years. It's an upscale, highly desirable area. If you're buying for appreciation potential, that makes sense. But if you're buying rentals, you're not living in the property—your tenant is. When you buy rentals, what matters most is how much rent you can get and whether it will cash flow. Cash flow is rule number one. If you're starting out, Section 8 is a good place to begin. I'm not saying you'll stay there forever—eventually, you may want to own rentals in higher-quality neighborhoods with higher-quality tenants—but when starting, cash flow is key. Areas with low prices and high rents give the best returns. A great place to start is by checking Section 8 rent amounts with the HUD tool at www.lexlevinrad.com/hud. You enter your state, city, and ZIP code to see what HUD will pay for a three- or four-bedroom. That's tool number one. Tool number two is price. We currently have an unusual set of circumstances making rentals an especially good opportunity. First, real estate prices peaked in 2022. In Florida—especially the condo market—prices have since dropped significantly. In some areas, I've seen 30% declines from the peak. Some markets, like Boca Raton, are holding strong, but others—Palm Bay, Kissimmee, and similar—have dropped more. It's not just Florida. Markets like Houston, Las Vegas, and Phoenix have cooled considerably. The second factor is how much rent you are getting. Section 8 rents are set by the government, and because of inflation, HUD's rent amounts have increased dramatically. Properties renting for $1,500 two years ago may now rent for $2,000. This means that while prices have come down, rents have gone up, creating cash flow opportunities. For example, in Florida, a $200,000 ARV (after-repair value) ...
    Más Menos
    37 m
  • How To Make more Money

    How To Make more Money
    May 20 2025
    On today's podcast episode I talk about how to make more money. I talk to some students at my real estate training events who are looking for ways to increase their income. Not everyone is interested in waiting years to build wealth and equity with rental properties. Some people are looking to make more money now. And that is what today's podcast episode is about. Many new real estate investors are attracted to real estate investing and specifically wholesaling and flipping houses, because they are looking for an easy way to make more money. But I have noticed that these people who are looking to make more money usually have either a spending issue or an income issue. People that are looking for more income usually have a few things in common. They have too much credit card debt, may have student loans, have too many expenses, and not enough income to cover all of those expenses. The net result is a struggle to pay the bills every month. What we call the "rat race". How do you get out of that struggle of living paycheck to paycheck? For some it's a spending issue where they simply spend too much money relative to their income. For other's it's an income issue where they simply need to learn how to make more money. For most people it's a combination of both too much spending and not enough income. And what is surprising is that I see this even with people who have relatively high incomes of $150,000 or more. People tend to increase their expenses as they increase their income. And that is what keeps them stuck in the rat race. Keeping up with the Joneses, buying new cars and nicer houses to impress your neighbors is a poverty cycle that will keep you broke forever. So how does one learn how to make more money? Is the answer to get a better job? Or is it to switch jobs or even get a second job? The answer lies with none of these. Instead what is needed in order to make more income is to gain specialized knowledge. A person working at a fast food restaurant does not have specialized knowledge and that is why they make $13 an hour. Anyone could do their job. Few want to. They have no specialized knowledge. The more specialized knowledge you have, the more money you will make. You need to learn specialized skills. A good example of a specialized skill is learning how to be a property scout or deal locator. We call these people "real estate bird dogs" in the industry. If I paid you $5,000 or $10,000 for every house that you found for me, then how many houses would you need to find per month to exceed the income from your job? The answer is not many at all. If you knew how to find houses you would have a specialized skill that could make you a lot more money than what you are currently making. If you become good at locating wholesale real estate deals at discounted prices, then getting paid to find these deals by an investor like me will make you a lot of money. Learning how to flip these deals to other investors for a profit is a specialized skill called "wholesaling" which can make you a lot more money than what you are getting paid at your job. It's a specialized skill. And it's a skill that you can learn. I teach this skill at the Wholesaling Real Estate Boot Camp. Learning how to buy foreclosures and bank owned properties is a specialized skill too. I teach this at the Foreclosures and Bank Owned Properties Boot Camp. Even learning how to buy rental properties at a discount and how to employ the Buy, Repair, Rent and Refinance Method is a specialized skill. I teach my students how to do this at the Buying Rentals and Building Wealth Boot Camp. These specialized skills will make you a lot of money because most people do not possess this knowledge. Regardless of your real estate investing strategy, whether you want to buy and rent, fix and flip, or wholesale and flip you need to know how to find deals. The more deals you can find, the more money you will make. And that skill set of knowing how to find deals is very valuable. Doctors and dentists, and other busy professionals that want to buy rental properties don't have time to search for and locate deals. They want someone to bring deals to them. That is why wholesalers get paid so much to locate deals. The skill set of learning how to locate deals is a skill set that you can learn. I have taught over 7,000 students these skill sets at my real estate training events. Learn how to buy foreclosures and bank owned properties at the Foreclosures and Bank Owned Properties Boot Camp. Learn how to be a deal finder and get paid to find deals with my Real Estate Bird Dog and Partnership Program. Learn how to find wholesale deals at the Wholesaling Real Estate Boot Camp. Learn how to fix and flip houses at the Fixing and Flipping Houses Boot Camp. Learn how to buy rental properties and build wealth at the Buying Rentals and Building Wealth Boot Camp. These are all specialized skills that can be learned. If you learn these specialized ...
    Más Menos
    30 m
  • Understanding the BRRR Method

    Understanding the BRRR Method
    Apr 29 2025
    On today's podcast episode I talk about the Buy, Repair, Rent and Refinance strategy commonly referred to as the BRRR Method. This is one of my favorite real estate strategies and one of the easiest ways that I know to create long term wealth with real estate. The Buy, Repair, Rent and Refinance Strategy was the method that I used to make my first million dollars in real estate. It has helped me, and many of my students become multi millionaires. Ironically, out of all the real estate investing strategies that there are, it's the easiest strategy to employ for a beginner and requires the least amount of effort. The BRRR Method consists of four components BUYREPAIRRENTREFINANCE BUY The first step is to find a rental property that would work using the BRRR Method. Your goal is to find a property that you can buy, repair, rent and refinance where all of the costs of the purchase and renovation of the property are covered. Once you locate a property, you purchase it using a loan from a private lender. I teach my students how to get private lender loans at my real estate training events. REPAIR The second step is to repair and renovate the property. We call this stage the "rehab" stage. Before you can rent the house to a tenant, you will need to make the property rent ready. How much work is required to make the property rent ready depends on the property. Some houses only need a new coat of paint and fresh carpets. Others require more renovation like updating the flooring, the kitchen, and the bathrooms. Some houses require major renovation like new roofs, central air conditioning, plumbing or electrical work. In some cases you may be able to buy a property that is already rented (with a tenant in place). In this scenario you can skip the repairs because the house is already rented and does not need to be repaired. However, usually, for the BRRR Method to work, you would need to buy the property at a substantial discount to market value. And that means that most of the time the property would require repairs. RENT The third step is to rent the property. You will need to have a tenant in place in order to be able to refinance your mortgage. The bank will want to see the amount of rent that the tenant is paying, and will want to verify this by getting a copy of the lease, and also by confirming that the rent is being deposited into your bank account. You would typically collect the first month's rent, last month's rent and a security deposit from the tenant when renting out the house. REFINANCE The fourth step is to refinance the mortgage to a lower interest rate fixed mortgage. In order to refinance the mortgage the bank will require an appraisal. For investment properties, banks will typically lend 75% of the appraisal value. A house that appraises for $200,000 would be able to get a mortgage for $150,000. The goal with the refinance is to get enough money from the bank in the refinance to pay off the private lender and to cover the purchase price and the repairs plus all closing costs and other fees like points, interest, and insurance. Done correctly, (like in the example I used in this podcast episode) you can buy a house with no money down using the BRRR Method. EXAMPLE On the podcast episode I spoke about a house that could be purchased for a purchase Price $80,000. Assume you could get a private lender loan from someone like me for $70,000. If this property required repairs of $30,000 and fees and points and closings costs were $10,000 then your total cost to purchase and repair this property would be $120,000. After the house was repaired, let's say you rented it to a tenant for $2,000 which is the going market rate. Now that the house is rented, your goal would be to refinance the mortgage so your mortgage broker orders and appraisal and the house appraises for $200,000. The bank is willing to lend you 75% of the appraisal amount which is $150,000. I recommend the 15 year fixed rate mortgage so that your house is paid off in 15 years (or less if you pay a little extra each month). You have to pay back the private lender loan of $70,000. You also want to pay yourself back the cost of the repairs ($30,000) plus the cost of the fees and points and closing costs from when you purchased the house ($10,000). In some cases you may have used Home Depot cards to pay for materials and you may have paid your contractor with a credit card. HERE IS THE BREAKDOWN Purchase Price $80,000 Private Lender Loan $70,000 Fees and Points $10,000 Total Cost $90,000 Repairs $30,000 Total Cost Including Repairs $120,000 Your Cash Out of Pocket (or credit cards used or a combination of both) would be the $10,000 down payment, plus $10,000 in closing costs, points, fees and insurance plus the $30,000 in repairs. The total cash out of pocket would be $50,000. This could be borrowed from a relative or friend or it could be a combination of credit cards, savings and Home Depot cards. APPRAISAL Appraisal ...
    Más Menos
    38 m
  • How To Buy Houses in 2025

    How To Buy Houses in 2025
    Apr 17 2025
    On today's podcast episode I talk about how to buy houses in 2025 and what to look out for as an investor when buying in today's market. The past 3 years have been an interesting time for real estate investors - especially in Florida. We have seen interest rates move up from a low of 2.65% in 2022 to above 7% by October 2023. This rapid increase in interest rates which was orchestrated by the Fed to reduce inflation had a very sobering effect on the real estate market. Prices peaked around July 2022 and have been on a gradual decline ever since. Over the past year, the market has shifted from a seller's market where it was easy to sell, to a buyer's market where buyers can be very selective. Sellers have been slashing prices on properties listed on the MLS and inventory has been rapidly increasing in many areas. In some areas like Southwest Florida, in some cities the number of listings on the MLS has quadrupled over the past few years. Some of the notable changes that have occured over the past few years are: Hedge Funds, Private Equity Funds and iBuyers stopped buying houses.These same hedge funds and private equity funds are now selling houses.Builders have had to slash prices and provide incentives to lure buyers in.Higher interest rates and prices means less buyers can qualify for a mortgage.Banks and mortgage lenders are becoming much more cautious on lending. So how have these changes affected real estate investors who are wholesaling and flipping houses, fixing and flipping houses, and buying rentals and Airbnb's? The first major change is you have to be very weary of sold comps (comparable sales). A house that sold 3 months ago may have gone under contract 5 months ago, and prices may have been ten percent higher. If you are planning on fixing and flipping and it usually takes you four to six months from purchase to sale, it may now take you longer to sell, and you may have to decrease the asking price. During that longer holding period, you will have additional interest payments. You may also be looking at an additional ten percent decline in pricing by the time the house sells. For investors that are fixing and flipping, they have a situation where prices are coming down and they may continue to come down. I recommend that you build in a profit margin of 10% from sold comps, and then add an additional 10% for potential price declines. This is a very conservative assumption, but it will help you stay profitable and out of trouble. It will also make you reject almost all deals that are presented to you. In this market you will need to buy at deep discounts. Keep an eye on home builders and the pricing of new homes because that is also putting downward pressure on comparable sales. If a brand new 1,800 square foot home that was built in 2025 is selling for $380,000 then why would someone pay $350,000 for your 1989 house that you fixed up which is only 1,200 square feet? Don't only look at sold comps because if you do you will over estimate the ARV and what the house could be sold for. Always pay attention to the home builders because their pricing puts a ceiling on comparable sales. If you are watching the builders, then you will know when they are slashing prices and you will be able to adjust your comparable sales and ARV accordingly. In today's market it is more important to look instead at current listings on the MLS than comparble sales. Pay attention to how long homes have been listed (days on market) and how much sellers are slashing their asking prices. Sold comps may tell you a house is worth $350,000, but if there are 3 houses listed for sale at $320,000 then ask yourself if you called the realtor and made an offer would the seller accept $310,000 or $300,000?. If the answer is yes, then the ARV today is $300,000 (not $350,000). And yes that is a shocking price decline. But it's also reality. If you are fixing and flipping, if today's ARV is $300,000 what will it be in six months? I recommend that you consider reducing your ARV estimate by an additional 10% to account for potential additional price declines and you run your offer price off of those numbers. If you are fixing and flipping be very conservative and buy at deep discounts! This means you probably will need to reject most deals that are presented to you. You won't find a great deal from a wholesaler who is marking up their price by $50,000 or $100,000. Also watch out for ARV estimates from wholesalers (they are probably too high). If you are wholesaling, consider that your cash buyer investors are the fixers and flippers described above. If they are buying deep, you will need to get houses under contract at deeper discounts in order to be able to flip them to those buyers for a profit. If you are buying at 60 cents on the dollar, you will not have a problem flipping houses. The days of paying 80% of ARV and flipping a house for 90% of ARV are over. Wholesalers will have less cash buyers to flip houses to because ...
    Más Menos
    43 m
  • Bidding on Online Auction Sites

    Bidding on Online Auction Sites
    Feb 11 2025
    On today's podcast episode, I talk about bidding on online auction sites, and buying bank owned properties and foreclosures. In order to understand buying foreclosures and bidding on bank owned properties on online auction sites, it's important that you understand the foreclosure process and how it works. I will be covering this in detail at the Foreclosures and Bank Owned Properties Boot Camp next weekend. You can learn more about the Foreclosures and Bank Owned Properties Boot Camp at the link below: https://www.lexlevinrad.com/foreclosures-bank-owned-properties-boot-camp/ There are 4 stages to foreclosure: Pre-Foreclosure Foreclosure Foreclosure Auction Bank Owned Property Pre-Foreclosure In the pre-foreclosure stage, the homeowner is late on their mortgage payments. They can be 30 days, 60 days, 90 days or 120 days late. According to the Dodd Frank Act, banks cannot pursue a foreclosure lawsuit until a homeowner is 120 days late so any homeowner who is late up to 120 days (or until the bank initiates a foreclosure lawsuit) is considered in pre-foreclosure. You can market to these homeowners by accessing 30 60 90 day late mortgage lists from data providers and marketing to these homeowners before they go into foreclosure. Foreclosure After the bank has initiated a foreclosure lawsuit (known as "Lis Pendens" in Judicial States like Florida), the homeowner is now in foreclosure. Foreclosure is public record and you can get access to this data by using data providers like Propstream (you can get a free 7 day trial at https://www.lexlevinrad.com/propstream/) Many real estate investors download the foreclosure list and market to homeowners in foreclosure by mailing postcards and letters. Investors can purchase these properties before the foreclosure auction directly from the homeowner. On new foreclosure filings, a foreclosure auction date has not yet been scheduled, but after a few months, a foreclosure auction date may have already been set. It's very important to understand this and to know if there is a foreclosure auction date and what that date is. Any investor can buy the property for cash directly from the homeowner up to theoretically the day of the foreclosure auction. In reality if you were using a title company and you were going to do a lien search, you would want to close at least a few days before the foreclosure auction which means you would need to sign a contract with the homeowner no later than 3 weeks before the foreclosure auction date. Foreclosure Auction Investors can register to bid on the property at the foreclosure auction which is held online by the County Clerk in most counties. I do not recommend buying at the foreclosure auction since you are not guaranteed to receive free and clear title and the property may have liens and building violations attached to it. At the foreclosure auction, the property is sold to the highest bidder. The bank will have a representative who is usually an attorney who will bid up to or very close to the amount of the original mortgage that was owed by the homeowner. This is done to protect the bank's interest for the amount of the money owed. In the event that the bank is the highest bidder (because other investors don't want to bid that high), then the property will go back to the bank. At this point the mortgage is wiped out and the bank now owns the property and it becomes a bank owned property. Bank Owned Property (REO) Once the property goes back to the bank it becomes a bank owned property or REO (which stands for real estate owned by the bank). The goal of the bank is to get rid of this property as fast as possible. They do this by only selling to cash investors. They do not allow mortgages because the bank wants a quick sale and does not want to wait to see if the house will appraise or if the buyer can get approved. The bank only accepts cash offers and requires all offers to have a proof of funds letter showing that the buyer has the funds available to purchase the property. We provide a proof of funds letter to all students that are in our real estate training program. The ideal buyer for a bank is an investor that will pay cash and waive all contingencies including inspections. Why is this ideal for the bank? Because the buyer cannot back out. There are no appraisals, surveys, inspections or requirements to be approved for a mortgage, so for the bank this type of offer is the one that is most likely to close and sell fast for cash (which is what the bank wants). Once the bank owns the property, they assign an asset manager in their loss mitigation department to oversee the sale of the property. This asset manager hires a few local real estate agents and requests a BPO which is a broker's price opinion on what the property should be listed for and what the current value of the property is. The asset manager then chooses one of these agents to be the listing agent and list the property on the MLS. ...
    Más Menos
    34 m
  • How To Find Deals in 2025

    How To Find Deals in 2025
    Jan 16 2025
    On today's podcast episode, I talk about how to find deals in 2025. The market has shifted and 2025 will be a big year for change in real estate. The Current Real Estate Situation Real estate prices are up by more than 50% since 2020. The 30 year mortgage rate has increased from a low of 2.65% in 2021 to above 7% today. Anyone who purchased real estate before 2020 is sitting on a lot of equity, and most likely refinanced into a very low interest rate mortgage. These homeowners have no incentive to sell. This is one of the main reasons why inventory has been so low. But what about homeowners that need to sell their house because they are relocating, downsizing, or for any other reason? What about sellers that have lost their job, are in foreclosure, have become sick or disabled, or are unable to afford their monthly mortgage payments? Sellers Are Delusional We have sellers like this calling our office every day. And I can tell you that in my opinion most of these sellers are in denial and delusional. They still think that their house is worth what Zillow said it was worth two years ago. However the reality is very different. In order to sell a house you need a buyer. And that is where the problem lies. At the current prices and interest rates, the average American can no longer afford to buy a home. So buyers wait, while sellers slowly start facing the reality that real estate prices in Florida have declined. Investors that fix and flip houses for a living are feeling the pressure too. Price declines means they may flip the house for less than originally anticipated. Refinancing from a hard money loan means higher interest rates and higher payments. Many of these fix and flip buyers are sitting on the sidelines waiting for deals to materialize. If you are buying fix and flips in this market, make sure you are buying deep. If you were buying previously at 70 cents on the dollar, build in a margin of safety and buy at 60 cents on the dollar now. I am seeing amazing fix and flip deals with damaged properties. Focus on that if you are fixing and flipping. If you want to learn how to fix and flip make sure you attend my Fixing and Flipping Houses Boot Camp. Increased Inventory and Lower Prices The inventory of MLS listings has substantially increased over the past two years. Sellers that are motivated to sell are slashing the prices on their listings. Foreclosures are increasing and I am starting to see more and more short sales and bank owned properties on the MLS and on online auction sites. Some markets have already had substantial price drops of 20%. There have been a number of negatives for real estate over the past few years including higher prices, higher interest rates, more inventory, rising property taxes, higher insurance and higher HOA fees. Where To Find Deals Sellers that are truly motivated to sell are facing a market with less buyers. A seller that is motivated to sell because of property damage, fire, flood, or hurricane damage is having a hard time finding a buyer. Some of these damaged properties can be purchased at a low enough price that makes sense for a rehabber looking to fix and flip or for a landlord looking for a cheap rental. Look for damaged properties. Short Sales Sellers that have lost the equity in their home, (which is anyone who purchased after 2022) who want to sell are having a very difficult time too. They are realizing that they cannot get enough from the sale of their house to pay their mortgage off. They have already lost their down payment and some of these sellers are simply starting to walk away. This is an opportunity for you as an investor to purchase their property at a discount by having the bank agree to a short sale where they accept less than the balance owed on their mortgage. I am currently working on a few deals like this that are short sales. They were all purchased at the peak of the market. Foreclosures and Bank Owned Properties I anticipate that as more negative equity homeowners walk away, we will see more and more foreclosures and short sales. Many of these homes will become bank owned properties that will be listed on the MLS and on online auction sites like auction.com, and Hubzu.com. This is why you need to learn how to buy and bid on bank owned homes. I will be teaching how to buy and flip bank owned properties at the Bank Owned Properties Boot Camp which is coming up in a few weeks. Buying Subject To The Existing Mortgage Homeowners that purchased at the peak have lost the equity in their home. But they may have a really low mortgage rate of less than 3% and they may be willing to let you assume their mortgage. There are literally thousands of deals out there where you can buy a house from a seller and assume the mortgage. Learn how to buy houses "subject to the existing mortgage" and you will find many deals like this in 2025. I teach buying "subject to" at the Creative Financing Boot Camp. Seller Financing Older homeowners...
    Más Menos
    45 m