How To Find Deals in 2025

On today’s podcast episode, I talk about how to find deals in 2025. The market has shifted and 2025 will be a big year for change in real estate. 

The Current Real Estate Situation

Real estate prices are up by more than 50% since 2020. The 30 year mortgage rate has increased from a low of 2.65% in 2021 to above 7% today. Anyone who purchased real estate before 2020 is sitting on a lot of equity, and most likely refinanced into a very low interest rate mortgage. These homeowners have no incentive to sell. This is one of the main reasons why inventory has been so low. 

But what about homeowners that need to sell their house because they are relocating, downsizing, or for any other reason? What about sellers that have lost their job, are in foreclosure, have become sick or disabled, or are unable to afford their monthly mortgage payments? 

Sellers Are Delusional

We have sellers like this calling our office every day. And I can tell you that in my opinion most of these sellers are in denial and delusional. They still think that their house is worth what Zillow said it was worth two years ago. However the reality is very different. In order to sell a house you need a buyer. And that is where the problem lies. At the current prices and interest rates, the average American can no longer afford to buy a home. So buyers wait, while sellers slowly start facing the reality that real estate prices in Florida have declined. 

Investors that fix and flip houses for a living are feeling the pressure too. Price declines means they may flip the house for less than originally anticipated. Refinancing from a hard money loan means higher interest rates and higher payments. Many of these fix and flip buyers are sitting on the sidelines waiting for deals to materialize. If you are buying fix and flips in this market, make sure you are buying deep. If you were buying previously at 70 cents on the dollar, build in a margin of safety and buy at 60 cents on the dollar now. I am seeing amazing fix and flip deals with damaged properties. Focus on that if you are fixing and flipping. If you want to learn how to fix and flip make sure you attend my Fixing and Flipping Houses Boot Camp.

Increased Inventory and Lower Prices

The inventory of MLS listings has substantially increased over the past two years. Sellers that are motivated to sell are slashing the prices on their listings. Foreclosures are increasing and I am starting to see more and more short sales and bank owned properties on the MLS and on online auction sites.  Some markets have already had substantial price drops of 20%. There have been a number of negatives for real estate over the past few years including higher prices, higher interest rates, more inventory, rising property taxes, higher insurance and higher HOA fees. 

Where To Find Deals

Sellers that are truly motivated to sell are facing a market with less buyers. A seller that is motivated to sell because of property damage, fire, flood, or hurricane damage is having a hard time finding a buyer. Some of these damaged properties can be purchased at a low enough price that makes sense for a rehabber looking to fix and flip or for a landlord looking for a cheap rental. Look for damaged properties. 

Short Sales

Sellers that have lost the equity in their home, (which is anyone who purchased after 2022) who want to sell are having a very difficult time too. They are realizing that they cannot get enough from the sale of their house to pay their mortgage off. They have already lost their down payment and some of these sellers are simply starting to walk away. This is an opportunity for you as an investor to purchase their property at a discount by having the bank agree to a short sale where they accept less than the balance owed on their mortgage. I am currently working on a few deals like this that are short sales. They were all purchased at the peak of the market.

Foreclosures and Bank Owned Properties

I anticipate that as more negative equity homeowners walk away, we will see more and more foreclosures and short sales. Many of these homes will become bank owned properties that will be listed on the MLS and on online auction sites like auction.com, and Hubzu.com.  This is why you need to learn how to buy and bid on bank owned homes. I will be teaching how to buy and flip bank owned properties at the .css-j9qmi7{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:row;-ms-flex-direction:row;flex-direction:row;font-weight:700;margin-bottom:1rem;margin-top:2.8rem;width:100%;-webkit-box-pack:start;-ms-flex-pack:start;-webkit-justify-content:start;justify-content:start;padding-left:5rem;}@media only screen and (max-width: 599px){.css-j9qmi7{padding-left:0;-webkit-box-pack:center;-ms-flex-pack:center;-webkit-justify-content:center;justify-content:center;}}.css-j9qmi7 svg{fill:#27292D;}.css-j9qmi7 .eagfbvw0{-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;color:#27292D;}