All Forum Posts by: Jesse Morrell

@Alan Mills go to some auctions and check them out and see what happens.

@Alan Mills you can hire a title company to do a preliminary search for $300 but all they are going to do is send someone to the county clerk to pull the file on that property and see if it has any recorded liens. If there are any liens on a property, it needs to be recorded with the county.

@Alan Mills if you end up buying a lien at a trustee auction on accident, thinking you are buying a property, and then the property also goes to Sheriff sale for taxes, your lien falls off and is worthless. It’s happened to investors before.

@Alan Mills each state is different. I’m in Texas where there are Sheriff Sales for taxes, in which there is a two year right of redemption and all liens and mortgages fall off at sale. Landlords like this auction. And there are trustee sales in which the mortgage lender forecloses to recoup the remainder of the principal. The liens do not fall off but there is no right of redemption. Flippers like this auction. Two majors for trustee auctions is to make sure you do a title search, which you can do yourself with the county records, and make sure you aren’t buying a lien instead of the property because liens get auctioned off too.

Market down turns and even market crashes are the best investment opportunities to buy real estate for those with the cash. A flood of foreclosures would drop prices but also create more amazing buying opportunities. I’m personally looking forward to more deals hitting the courthouse steps because it’s the worst when there are more investors than deals. To have more deals than investors would be great. I just want to sell what I have now at high prices before that happens.

@Calvin Ozanick that’s a good point. The supply could increase as a result of people who can no longer pay their mortgage trying to sell and capitalize on those all time highs.

Historically real estate always increases over every ten year span, with ups and downs in between, because that’s just how inflation works.

The good thing about real estate, as opposed to stocks, is that houses all rise and fall together. Markets always go up and down but real estate always tends up overall.

I’m asking and thinking about this question because I have a flip I’m working on finishing up and getting on the market. If the market does turn down, since houses all rise and fall together, I could still sell this one fixed up and move on to my next fixer upper no problem. I have a large enough profit margin to handle a down turn.

I suppose those renting out their properties, using BRRRR, can also handle a temporary down turn too because their strategy is long term and real estate always trends up in the long term. Still, everyone refinancing right now could temporarily end up owing more than they would be able to sell it for.

@Joe Splitrock you mean prices go down when there are less buyers, not no buyers, right? When the supply is greater than the demand. There doesn’t have to be zero demand for prices to drop, just an over supply.

I’ve seen many foreclosure take years to hit the market, like 5-8 years in some cases, even when they are vacant and empty.

@Terry Harris another reason is that a lot of moves are from people changing jobs or getting new jobs and the economic shutdown has really affected the job market, though unemployment is going down now.

@Terry Harris part of the scenario I heard is that the shutdown has slowed new construction also, which has affected inventories. Foreclosure inventory is also very low.

I can’t imagine there could be a nationwide economic shutdown causing mass unemployment, especially with a moratorium against evictions, that won’t eventually cause massive amounts of mortgage foreclosures. It’s just the way the system works.

Real estate prices are high right now because banks have such low interest rates in an attempt to stay alive, while real estate inventory is low. Many buyers plus low inventory means high prices, which we have seen. But once all these nationwide foreclosures hit the market (I don’t think it will be in September like some have said because the foreclosure process takes time, especially to hit the market) it will drive the prices of real estate down.

The only thing that could counter balance that is for banks to continue to flood the market with home buyers from the low interest rates while also slowly dripping their foreclosure inventory of REO to the market. That would help the retail market from taking as much of a dive, but the foreclosure auctions will still likely have more deals than cash bidders, driving down the prices.

The low interest rates are tempting many to refinance but if the market drops from a flood of inventory, you could end up owing more than the property is worth, for the time being, since the high prices are sort of artificial from the low interest rates. Banks will have to raise interest rates again, out of necessity of how their business works.