What does the current housing supply shortage mean for real estate investors?
There is a current housing supply shortage across the United States which can make it more challenging and more competitive for real estate investors to close the deal on their next flip project. What does this housing shortage mean? The bad news is that they may have to get more creative to find deals and the good news is that overall, profits have shown to have increased on flips. The other good news is that Pivotal Capital Group has the capacity as a direct lender, to fund loans quickly, with ease and certainty to help investors snag properties and beat out the competition.
While mortgage rates have increased since 2020, they are still at record lows and the demand to buy houses has remained strong. Selling fix & flip properties has likely become easier due to a housing shortage combined with increased demand. Real Estate inventors have also enjoyed benefits of rising home prices, increasing profits. The flip side (pun intended) is that there is steep competition to buy real estate investment properties. The foreclosure moratorium for homeowners has been extended through Dec 31, 2021, positioning COVID related foreclosures into 2022. Investors may have to get creative when prospecting new deals, the rest of the year.
Tips on looking for potential flip properties:
- Some investors find the best deals by canvasing target neighborhoods for run down homes in disrepair and making note of the address. Once they have some prospects they can find out who owns the homes in order to make an inquiry to see if the owners may be interested in selling or if it’s an off-market listing.
- Search the MLS for Short Sale or Real Estate Owned properties. Investors can also look for potentially motivated sellers with homes listed for sale for over 90 days.
- Check the local tax records in the area prospecting area for properties with delinquent taxes. This is a good indicator that the owners are experiencing financial hardship and likely have not kept up on any repairs, which will also likely lead to flip opportunities. Investors can check local tax records easily by going to local tax assessor’s office or website in their targeted area.
Real estate investors who can create opportunity by finding fixer-uppers, renovate and then resell them, are adding to the much-needed housing supply. According to Bloomberg “Many investors expect flipping to continue its upsurge this year.” Such low supply mean home values will likely continue to stay stable and serve as another key indicator of profitable returns for real estate investors. The bottom line—it may take some extra work to find the next flip but with such low inventory in a hot market, investors are positioned well to sell it fast and for a good price. If you’re interested in flip financing APPLY NOW.