Many Investors have been asking me about orange county real estate how much is out there and how to get their games on it. Orange County property usually refers to the supply of homes that have not yet hit the market, but “hiding” in the background. In real estate this applies to foreclosures (REO or bank owned properties) or those like to the process.
Banks and mortgage loan servicing companies typically hold onto properties that haven’t seen a mortgage payment for 90 days and in any cases even 2-3 years.
Why do they hold on so long?
Banks hang on since it allows them to release their inventory over time to keep their books in check and also to provide that smooth liquidation to stimulate the real estate economy when necessary. Banks will now be getting more money for those newly released properties, then say two years ago, due to the steady increase in home prices and low inventory levels. If they chose to release all at once, it would flood the market with “distressed properties” and bring down property values.
How much “orange county real estate” is still out there?
Foreclosures have been steadily declining since 2013 with the highest orange county property then at 2.2MM. According to the National Association of Realtors, there is still about four years still on the books, and it is possible that we could soon see more!
More “orange county real estate”? Why? (HAMP) Home Affordable Modification Program
In 2017 and beyond, many homeowners may find it difficult to make their mortgage payments due to “resets” with HAMP thus pushing them into foreclosure. The government’s Home Affordable Modification Program provided temporary relief to borrowers during the housing crisis. These diversions ended after five years, and now payments will be “reset” thus causing loan payment increases for nearly 900,000 homeowners. Some of those are likely to find it difficult to keep up with the payments in our current economy.
Where do Investors find “orange county real estate”?
Forget about calling the loss mitigation department or asking the cashier at your Big Bank. They won’t be able to help you. Instead, savvy real estate investors can approach the REO departments of smaller regional banks, credit unions and portfolio lenders to find out what could be “lurking” in the shadows. This presents an opportunity to beat out the competition and purchase at greater discounts.
But my favorite way to locate “orange county real estate” is what I call “Driving for dollars.” Only drive through areas that have high foreclosure activity and look for the white sticker posted on the front window or door of the house. This typically contains the information of the bank or asset manager of the property and their phone number. Give them a call and see where they are in the foreclosure process and if they’re ready to make a deal!
The NEW kind of “orange county real estate”!
There is a new kind of orange county real estate on the market these days and I’m not talking about the REO kind. Many successful agents have their own orange county real estate. If you’ve been in the business for an extended period and built up a clientele, these clients typically contact you well in advance of the property going on the market. You advise them of the steps needed to get the house ready to show which typically means doing repairs such as paint, carpet, landscaping, staging, etc. Therefore, there is a period before the property hits the market creating a different type of orange county real estate. Contacting your favorite realtor about this kind of inventory can increase your chances of finding that Dream home.