What does 4 more years of Obama in the Whitehouse mean for real estate investors?
Regardless of who you voted for we are looking at 4 more years of an Obama administration. Love it or hate it the question is what real estate investors should expect to see happening in the housing market and how they can capitalize on it.
1. Increasing Investment in Real Estate
Whether the economy and employment actually improves as a whole or not we can expect an increased interest in real estate investing either simply due to the continued rise in home prices or because of a lack of other attractive investments. So how can you work with others to help them invest in real estate safely and profitably to cash in on rising values and spreads?
2. Flipping Distressed Properties
2012 has seen a continued surge in foreclosures in many areas (with a few exceptions like San Diego). The foreclosure mess isn’t quite over yet and between those still falling into default and the large pot of REOs and shadow inventory waiting in the wings there will certainly still be plenty of foreclosures and distressed properties to flip over the next 4 years.
3. Private Lending
Between the attraction to investing in mortgage notes, tough mortgage market, poor outlook for stock and bond yields and need for seller financing we can expect private lending will only continue to grow in the next couple of years.
We can be sure there will be more lending regulations being unleashed in the short term and while they may help restore confidence and solvency they will likely take more than 4 years to really have a large, positive impact on the street.
At the same time radio show hosts are publicly bragging that an Obama re-election means they can hold onto their food stamps while higher income earners cringe at the coming tax consequences of the election and rush to hide income and assets. It is great for people to get government help and tax avoidance (not evasion) is expected but it makes it a lot harder for individuals to qualify for home loans when they are hiding their income whether to reduce taxes or qualify for those handouts, especially with no stated income loans available. This unfortunately will probably just compound the situation, forcing new taxes and borrowing costs in order to offset the losses in tax revenue.
So those real estate investors who are able to harness private money and are able to offer seller financing are likely to be among the biggest winners in the next 4 years.
4. Personal Branding
Personal branding and honing in to connect with specific niches is certainly going to become more important for real estate investors to stand out and win the business of home buyers, sellers and other investors, especially with an increasingly diverse market.
We’ll likely continue to see a split market with young democrats loaded with new money chasing trendy city pads and McMansions while your more experienced generation of republicans continues to bunker down in fear, shaving expenses, stashing cash and choosing to downsize. A bland blanket marketing campaign won’t effectively appeal to either, it is those investors who prospects can relate to best who will come out ahead.
