The Off Market - March 02, 24 Edition

Welcome to Off Market by Goliath Data

The insiders guide to off market properties.

As a reminder, we break down the latest real estate data, provide commentary (and hot takes) on trending topics and surface 50+ off-market leads from across the country. Let’s dive in.

General Update

February is officially over, and as usual it flew by. With winter almost behind us and spring on the horizon, property owners are going to slowly start purging their portfolios—getting rid of properties that aren’t cash flowing, have trouble tenants or are just generally a hassle in their eyes—that’s a good thing. Spend the next six weeks wisely, they’ll make or break your season.

On our end, we’ve been onboarding new counties as fast as we can, from Maricopa, AZ to Norfolk, VA things are starting to heat up. We are now backed by one of the top Property Tech venture capital funds, and we onboarded a few more software engineers to the team. Don’t worry we’ll continue to support wholesalers, flippers, investors and realtors anytime and anywhere—email, call and text.

Onto the latest real estate data.

Real Estate Data

Highlights

• Mortgage rates continue to climb, with the 30yr reaching 7.31%—up from 7.25% last week. Home prices are up 5% YTD, analysts predict prices will continue to rise across the US in '24.
• The mortgage market continues to deteriorate with applications down 14% year-over-year and 40% from pre-pandemic levels.
• This decrease in applications and refinances is leading to layoffs and mergers with the number of registered mortgage officers dropping 24.5% year-over-year.

Commentary

We've reached an impasse, deals are still being done but not at the scale or velocity as years prior. No one is selling, and those who are, continue to get top dollar (due to low supply). Some markets have started to soften up leading to massive drops in home values (E.g. Palm Springs due to Airbnb ban, and Austin, TX due to tech relocations back to the bay), but that is not the norm. We shall see what impacts the Fed cuts later this month have on the market (note: cuts are expected, not guaranteed).

Real Estate Trends

No-income Loans - There continues to be evidence of risky loan practices, including no-income verification loans, reminiscent of 2008. Individuals report qualifying for variable-rate loans with multi-point buy downs and 3.5% down payments. Although the properties they’re purchasing are not at the all time high prices of ‘21 or ‘22, these loans are still very risky. Purchasing properties with the intent to fix and flip or cash flow in a saturated market is a recipe for disaster, even if they’re purchasing them at 70% or less of the ARV.

Commercial RE Teetering on the Edge - According to the latest Feer and Greed Survey, asset values have fallen YOY in every major CRE sector, with Office values leading the pack at -25% YOY and Multi-Family narrowly behind at -12% YOY. Investors believe that multifamily and office asset values have further to fall in 2024 and are weary of deploying capital there. Outside of those categories, most investors expect to increase their CRE exposure over the next 6 months, but credit conditions remain tight across all CRE sectors. Credit conditions are expected to continue getting tighter with lenders shrinking their credit box.

If you’re considering investing in CRE, proceed with caution. The warning lights are blinking yellow at the moment with over $80B worth of property in distress—a 10-year high—things could go south very quickly.

New FinCEN Regulations - In February the Financial Crimes Enforcement Network (“FinCEN”) proposed new reporting requirements for certain real estate transactions. More specifically, the proposal would require individuals involved in real estate closings to submit and keep records of non-financed (i.e., all-cash) transfers of residential property to legal entities and trusts. This information includes the name/address of the principal place of business for reporting persons, transferee entities and trusts, and transferors that are entities, the individual’s citizenship status, their unique ID number: ITIN, SSN or EIN, and more.

Although not passed yet, keep your eyes (and ears) open. The last thing you want to do is be on the wrong side of a hungry DA who is looking to make a name for themselves.

Home Price Predictions - These are all over the board. Fannie Mae predicts +2.4%, Freddie Mac sees +3.2% and Goldman Sachs, the most bullish, expects +5.5%. They’re not alone, most analysts believe that home prices will continue to rise. Why? Supply and demand. There is still a massive imbalance between the supply of homes (both new construction and existing inventory) and the demand for those homes. And if interest rates come down, you guessed it, demand will shoot up even higher. The exception being markets like Palm Springs which banned short term rentals, and Austin, TX which Tech Folks flocked to during COVID and are now leaving in droves due to mandatory in-office working days.

Onto the resources.

Real Estate Resources

Wholesaling Contracts - Keep in mind that I'm not an attorney or a realtor, and this isn't legal advice. The contracts should be reviewed by an attorney in your state prior to use. You can access the contracts here.

• Purchase Agreement (Single Close)
• Purchase Agreement (Double Close)
• Assignment of Purchase Agreement
• Option Agreement
• Joint Venture Agreement

Wholesaling Tools - Everything from virtual wholesaling kits and comp tools, to lot finders, cold calling scripts and more. This is the most comprehensive list of free resources I’ve seen on the internet. You can access them here.

Rehab Calculator - This was a fun one to build. You put in what you intend to buy a property for, the ARV comps, and enter what needs to be done and it spits out an estimated profit & improvement/sqft. You can access it here (note: make a copy to use it).

Off Market Opportunities - Last but not least, we have the list of fifty off-market properties. These leads are from across the country and range from probates and pre-foreclosures to tax-delinquencies and trustee sales. You can access that list here.

The Closing Bell

As always, thanks for reading! If you need introductions to investors, wholesalers or cash buyers you know where to reach me.

• Austin

P.s. we just onboarded a handful of investors that provide funding for EMD and double closes—they’re eager to put their money to work.