Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Oke Tammik

Oke Tammik has started 6 posts and replied 20 times.

Post: Foreclosures increase? How?

Oke TammikPosted
  • Posts 21
  • Votes 38

@Mike Dymski thanks for the thoughts. It's certainly the case that helicopter money in the form of $1200 checks and extended unemployment benefits has helped the bottom income / wealth tiers manage their finances and reduce leverage. However, it's also quite clear that we are, in fact, in a low-income recession. Just look at the monthly reports from the Fed — this one from September and is the latest available, https://www.federalreserve.gov.... There is an indisputable disparity in layoff and furlough proportions by income, and in fact, we do have this data and it's pretty uncontroversial. My takeaway for how this affects RE? Per my above comment, my guess is that this segment of the US economy will continue to feel hurt and require additional stimulus to support both income and housing needs, leading to a very low risk in widespread foreclosures adding to available inventory.

Post: Foreclosures increase? How?

Oke TammikPosted
  • Posts 21
  • Votes 38

@Alvin Sylvain I totally agree. It's very perplexing phenomenon, but then again, what isn't these days... :/

My GUESS as to what is going on... I believe what we're seeing, prices going up due to increased demand / short supply and foreclosures in the private market going up, is simply a reflection of A) interest rates, B) halted foreclosures in the government-backed market, and C) the K-shaped economy. It's a little hard to explain my theory, but let me give it a shot. :) 

First the K-shaped economy: if you look at the white-collar economy, we're nearly at full employment. However, in the lower income / blue collar / service economy, we are seeing tremendous amounts of pain. You'd expect foreclosures, then, in the bottom half of the income spectrum. Makes sense. However, at the same time, you are having interest rates driving prices higher. Also, foreclosures in the larger government-backed part of the market are on moratorium, so any housing supply that might feed into the market during any other year is basically frozen solid, which helps to create a housing shortage and therefore a spike in prices. 

Furthermore on your question of why a buyer wouldn't be able to cash out, I would expect that in SF or NYC, where prices are down YoY so there are plenty of underwater mortgages, but my understanding is that these foreclosures that we're seeing are mostly in FL, SC, and around the south. 

There are probably local dynamics that play into every market, from LA to Portland to NYC. But in general, I think these are the dynamics in play that are creating rising prices and short supply in an otherwise horrible economy. Feedback, positive or negative, on my theory much appreciated. 

Post: Foreclosures increase? How?

Oke TammikPosted
  • Posts 21
  • Votes 38

@Danny S. the cares act defines 12mo of forbearance. Not sure what's typical tho. 

Post: Foreclosures increase? How?

Oke TammikPosted
  • Posts 21
  • Votes 38

@Account Closed what I want is not relevant to the analytics of what will realistically happen. And mass foreclosures are unlikely, IMO, except if the private market, which is a relatively small proportion of the overall mortgage loan market. 

Re your question. Do I want housing to be more affordable? Do I want to find deals? Of course. I would rather see this happen through higher interest rates, though, as we have left normal market dynamics a long time ago in the loan market. Normalized rates would reduce demand significantly, and subsidized rock-bottom rates are largely to blame for the nutso prices that we’re seeing. Now, do I want a pulverization of the middle class due to foreclosures? Only if I want to see the current social problems get worse. Which is so say, not really. 

Post: Foreclosures increase? How?

Oke TammikPosted
  • Posts 21
  • Votes 38

@Mike Dymski good visual. Touche :) 

Post: Foreclosures increase? How?

Oke TammikPosted
  • Posts 21
  • Votes 38

@Michael Johnson thanks for the reply. However, I looked into it, there are actually 4 options for homeowners coming out of forbearance, at least for Fannie Mae and Freddie Mac loans. Take a look at the link; I think this will prevent most foreclosures which would otherwise come into fruition, so I actually would not bet on a mass foreclosure problem in the government backed loan market. Add in the likely event that more stimulus is on the way with a Biden administration, and the probability of mass foreclosures becomes even more minuscule. https://capmrkt.fanniemae.com/... 

Post: Foreclosures increase? How?

Oke TammikPosted
  • Posts 21
  • Votes 38

Folks, I'm a bit confused on the latest foreclosure news, reporting that there was a 21% increase in foreclosures, MoM, in October 2020. I thought that there was a moratorium on foreclosures due to the CARES act? The act states that, except for vacant or abandoned property, a Federally backed mortgage loan servicer is prohibited from initiating any foreclosure process, seeking a foreclosure judgment or order of sale, or executing a foreclosure-related eviction or foreclosure sale for at least a 60-day period that began on March 18, 2020. So, I'm assuming these numbers are purely non-federally backed mortgages — does anyone know more about the details on these figures? 

    Hi folks, thanks for your thoughts on this. I'm looking to use this as an investment strategy as a buyer, possibly as a seller; actually am looking at buying a friend's second home via seller financing and turning it around into a rental as a first investment property. 

    @Cody Cox , I've heard of a lot of people who have purchased from their landlords as you mention. I also know of quite a few people who go to the open market via Craigslist or RMLS to sell their seller-financed properties; these tend to be the buy-on-contract-sell-on-contract investors. As a note investor, I'm sure you've seen both -- do you have a feel for how common one is over the other (direct-to-tenant versus open market sale)? 

    Full disclosure, I'm also a tech entrepreneur working on a business that addresses this market (more on my business upon request... I don't want to be seen as promoting my business here so I won't mention it further). 

    Hello everyone. I'm curious about what people think about using seller financing as an exit strategy for rentals? I'm legitimately curious whether anyone is considering this as an option, and if so, why? Obvious tax benefits from a long-term capital gains standpoint, but also the downside of having to pay depreciation recapture tax (flat tax of 25%, if I recall). I would think some folks are thinking about selling with rent payment moratoriums, increasing regs, and (if in Portland, like me) continuing increases in property taxes. I'm just trying to learn about the difference in strategy, sell & carry note versus hold onto rental. Thanks for your thoughts! 

    Hello all, newbie here. I'm wondering what channel is most useful for marketing a property with seller financing as a FSBO? I see a lot of people using Craigslist, I've seen some listings on Facebook groups, and of course unrepresented listings on the RMLS. Any thoughts on the best approach from a channel-strategy standpoint?