Hidden Treasure Lurks In Shadow Inventory For Duplex Investors

I had the opportunity to participate in a webinar with RealtyTrac’s Senior Vice President Rick Sharga the other day.

RealtyTrac is a firm that tracks foreclosure trends in 2500 counties across the country. Sharga shared unbelievable statistics; the most remarkable of which was that 70-80 percent of all foreclosures are NOT listed on the MLS.

In fact, of the 900,000 bank-owned properties (REOs) in this country, just one-third are listed on the MLS.

Two-thirds are not.

That’s 600,000 properties of shadow inventory; an average of 12,000 per state.

RealtyTrac estimates that 1.2 million homeowners are in the foreclosure process right now. Of these, just 20 percent have their properties listed for sale.

More stunning yet is that somewhere between 5 – 5.5 million property owners are seriously delinquent on their loans.  While some will manage to get current, RealtyTrac estimates that 4 million more foreclosures will hit the market within the next three to three and a half years.

While this is catastrophic to home and duplex owners, it also represents an unprecedented opportunity.  And both seasoned and first-time investors are recognizing just that.

But guess what?

Even though it’s a slow real estate market, great deals are still tougher to find and, typically, attract multiple offers.

Unless, of course, your Realtor knows where they are before they hit the market.

Last week I had a client who’s been looking for a duplex in an outer suburb write an offer on an REO that isn’t listed yet.

I have other clients doing the same. Several are watching duplexes already in the foreclosure process where the owner has refused to sell; waiting for the moment the bank gains control so they can submit an offer.

In fact, right now I am tracking over 100 duplexes, triplexes and small multi-family properties in sought-after Minneapolis and St Paul locations that are somewhere in the foreclosure process.

If you’re thinking about investing, there’s never been a better time. But if you’re working with an agent who can’t find your property before everyone else knows about it, you’re working with the wrong agent.

Call me. I’d be happy to help.