respres, CC BY 2.0
The impending recession will cause a lot of pain for workers and investors alike. But amidst the financial pain that our current inflationary environment is inflicting there will be emerging opportunities for those who are in a position to take advantage of them.
The persistent inflation, which started to become apparent in the Spring of 2021 was initially characterized are being transitory. However it persisted and grew to the extent that we have the highest inflation numbers in at least the last 40 years and it’s not just in the United States. It is a worldwide problem. And, the strategy being employed by the U.S. federal reserve is to tighten money, which is being done through increased interest rates and so-called quantitative tightening, or QT. The idea behind tighter money is to slow down the economy which will create less demand and hence less upward pressure on prices. Also, while not clearly stated, part of the strategy is to create a ‘negative wealth effect. In order words, bring down asset prices to make people feel less wealthy. The idea is if you feel less wealthy you will spend less, hence less demand so less price increases. This is the opposite of what is intended during periods of monetary easing, which is to pump up asset prices in order to cause a wealth effect which in turn stimulates economic activity.
A great way to begin making money in foreclosures is to start looking for ‘pre-foreclosures’ in your local area. And the best way to do that is to click here and use this tool.
It appears that the current monetary tightening scenario is more aimed at the wealthiest among us, since most of the ‘assets’ (stocks especially) are owned by the folks upper income brackets.
Prior to the current tight money policy real estate prices were soaring. And, along with real estate values, rents were soaring as well and that has been putting enormous pressure on renters.
Now with interest rates rising faster than any time in recent history the real estate market is slowing down quickly. And, people who have adjustable rate mortgages are in for a world of pain. Especially those who purchased in the last year or so. It seems inevitable that a flood of loan defaults and foreclosures is in the cards.
As horrible as a foreclosure is for those being foreclosed upon, the other side of the coin is a massive opportunity for those in a position to buy homes at a substantial discount.
While there are substantial opportunities in real estate foreclosure investing, there is a learning curve involved before jumping into this arena. And, the starting point is the issue of where to find foreclosure properties and how to find them early.
A good idea when getting started is to attend some foreclosure auctions in your area to find out how the process of buying foreclosures works. And while there be sure to talk to other investors and pick their brains to learn as much as you can.
Another good idea to spend some time formulating a game plan regarding what to do with the properties that you buy. Are you going to try to flip the property for a quick profit? Are you going to invest some money in upgrades and then sell it at the best possible price the market will allow? Are you going to rent it out and hold it for awhile until market conditions are more favorable to sellers?
A great way to begin is to start looking for ‘pre-foreclosures’ in your local area.
And the best way to do that is to click here and use this tool.