Since the onset of the COVID-19 pandemic in March of 2020, the US housing market has been on a record-setting hot streak with prices soaring to all-time highs. While mortgage rates had been extremely low throughout 2021, we’re now seeing mortgage rates return to where they were throughout most of the 90s and early 2000s. Between high prices and high interest rates, real estate investors are having a harder time finding good deals in 2022.
Fortunately, that doesn’t mean that there aren’t any good deals. It just means that they’re a little bit more difficult to find. Here are a few key tips for finding good deals in a tough real estate market:
Keep an Eye Out for Foreclosures
When there’s a broad economic downturn, there is typically also an increase in foreclosures, meaning that banks are taking back properties from owners who are no longer able to afford their mortgages. In the first quarter of 2022, a 132% increase in foreclosure filings was reported compared to the first quarter of 2021, which shows that foreclosure activity is picking up. While demand remains strong in the market, foreclosures are generally better deals because banks do not have an active interest in managing properties, and are much more likely to offload to a buyer who can close quickly.
Consider Expanding Your Search Area
Have your heart set on a particular area, but prices are a little too high for your comfort? Try widening your search scope a bit. Whether a different neighborhood, town, county, or state, expanding your search area is naturally going to give you better investment opportunities. Real estate markets can be hyperlocal, so while one particular area may be heating up, others may be cooling off a bit, even if prices seem to be going up across the board.
Since the onset of the pandemic, it hasn’t been unheard of for real estate investors to inspect properties virtually via video call
Market Directly to Homeowners Who May Be Looking to Sell
A great way to secure properties at a reasonable price without entering into a bidding war is to strike a deal before the property ever hits the open market. How is this possible? By getting directly in touch with the sellers!
Consider running ads on social media or sending direct mail to homeowners in your area of interest. While this will cost money and you may only get a few responses from your efforts, you’re more likely to get a better deal – and if you do end up getting a good deal in a hot market, you should be able to flip the house at a premium on the back-end of the project.
Develop a Strong Network of Real Estate Professionals
Real estate investors are most successful when they have a dedicated team of partners. Having a good real estate agent, private lender, contractor, and title company helps a lot in a competitive market. When you need to move quickly, Pimlico Capital is an ideal lender to work with! As a direct lender, we’re able to approve your deal and close in as little as 2 business days.
If you have a property in mind, get a free instant quote here, or give us a call at 410-855-4600 today!
