"I think I need to stop looking for MLS deals"

This perpetual line of reasoning from my sphere (and from my inner mind) over the last two months in my home market, which is experiencing never-before-seen inflationary pressure on BRRRR-able houses, has led to me needing to dig deep to crystalize WHY I am bearish on buying right now.  Well, not truly bearish, but more of a hybrid beast, as you'll see below:

I completely get your reasoning here. I work to keep (admittedly imperfect) tabs on several different channels and here is what I’m seeing:

- MLS has all the eyeballs. That’s what fetches the highest price for a property. Typically that depends on the agent positioning it well, but the hungrier the market at large gets the more the market is willing to dig past an agents indiscretions and find the mismarketed properties and the hidden gems.

- Wholesalers typically have some gems, but a lot of faux stones being marketed as diamonds that “just need some shining”. In a normal time a discerning eye can catch the flecks of gold and glints of diamond and can make the most of the wholesale lists. Now, though, everyone and their cousin is aware that people are paying bookoo amounts for property and dogs that would typically be wholesaled are being whole-tailed . . . put on the MLS by wholesalers or new agents BECAUSE the market will pay more than the typical wholesale buyers. So, the properties still going wholesale when the market will pay a LOT more . . . . woof woof!

- Foreclosures, Auctions, and the Impending REO crisis - There certainly are opportunities in foreclosure and auction properties, but the risks are the same as they’ve always been with these avenues and the rewards slimmer (thanks to the same inflationary pressure affecting the points above). Add to this that the much-clamored-for foreclosure crisis is being bet against MAJORLY by Uncle Sam. He’s got deep pockets (and a printing press) and can chase the reds away (referring to red on the balance sheet in this case).

I’ll add one more anecdotal observation to the 3rd point here. . . a local bank that services a lot of loans took their 3 person Loan Remediation Devision (that deals with people behind on payment) and scaled it to 48 employees focusing SOLELY on FHA loan remediations. Why?!? Welp, a little birdie tells me it is because they are paid about $7.5k per loan (regardless of the size of the loan) for successfully completely the remediation instead of foreclosing. They’re looking at the same data as everyone else, but are making HUGE bets on NON-foreclosure instead of foreclosure. Why would the FHA be throwing money behind non-foreclosure? Back to the crux of point #3.

For these reasons I’m deploying a certain strategy these days. That strategy is: vigilant waiting. I want to wave this banner as a prudent and opportunistic approach. Analyze everything that even seems to make sense, pursue what makes sense, optimize where you can, and trust God with the results. Keep your ears to the ground looking for alternative means of earning in the same vein, just like the people selling wares, meals, tents, gloves, and fuel to the goldminers striking out to “have their nugget of the good stuff” in the gold rush. To echo Warren B’s now notorious quip: “be greedy when others are fearful, and fearful when others are greedy.” I think March and April was a time of fear, and there were SOME, though not many, opportunities driven by that fear. Now, though, I mainly see greed and people forcing prices that don’t make sense. So, what do those people need? A pair of gloves? A new napsack? A private money loan?

Patiently with you,