Welcome to The Accelerated Investor Podcast with Josh Cantwell, if you love entrepreneurship and investing in real estate then you are in the right place. Josh is the CEO of Freeland Ventures Real Estate Private Equity and has personally invested in well over 500 properties all across the country. He’s also made hundreds of private lender loans and owns over 1,000 units of apartments. Josh is an expert at raising private money for deals and he prides himself on never having had a boss in his entire adult life. Josh and his team also mentor investors and entrepreneurs from all over the world. He doesn’t dream about doing deals, he actually does them and so do his listeners and students. Now sit back, listen, learn, and accelerate your business, your life, and your investing with The Accelerated Investor Podcast.
So, hey, guys, welcome back. What’s going on, Josh? Welcome back to Accelerated Investor. I’m so excited to be with you today. We’re going to be talking about finding motivated sellers with multiple layers of COVID motivation.
And what I mean by that is, you know, in any normal real estate cycle, finding a seller, a motivated seller, whether it’s a single family home, a duplex, a quad, whether it’s a small apartment building, a large apartment building, normally a seller, there’s going to be much more willing to sell their property if they have multiple layers of motivation. OK. So when we think about motivation for a seller. OK. One simple, easy form of motivation is when you find a foreclosure, you find a foreclosure. It’s owned by a bank. The bank has already foreclosed on somebody. The bank now owns it. It’s now considered an REO. And the bank is motivated to sell because they want to get it off their books. That’s one layer of motivation.
Another layer of motivation that’s typical. You hear a lot of people talk about is absentee owners, OK? And absentee owner is someone who lives out of the area. OK. They own this property at one, two, three, Main Street, let’s say, in, you know, Cincinnati, Ohio. But that person lives in Charlotte, North Carolina. And they’re managing a property that is, you know, hours and hours away from where they live. So they’re an absentee owner. So people say, well, you’ll go after absentee owners. OK, great. Some gurus say, hey, go after a seller who has high equity. That person is much more willing to sell. They’ve owned the property for a long time. They are motivated to sell because they have high equity and they want to unlock their cash. They want to unlock their equity in that building or that in that residential home.
So that’s a layer of motivation. Some people say well, go after people who are in probate. Right. That somebody has passed away. Grandma and grandpa both passed away. The property’s now in probate. It’s being passed along to the kids or the grandkids. That’s a layer of motivation there in probate. And the kids want to sell the home to again unlock their cash. Another reason for someone to be motivated would be that they’re in pre foreclosure, meaning they’re in default on their loan. They’re a month or two or three or four months behind on their payments. And they’re not, you know, haven’t been foreclosed on yet, but they’re in pre foreclosure. OK.
That means that they have a notice of default that’s been filed or the bank has started the foreclosure, but it hasn’t gone all the way through the foreclosure process. The seller still owns the property, but they’re getting pounded by the bank to either bring the payments current or get foreclosed on. That’s a layer of motivation. Somebody that has a pending eviction. Obviously, with covered, a lot of people don’t know how to they’re going to afford their rent payment or their mortgage payment. And so if they can’t afford the rent.
They’re not paying the rent. And now the owner of the property or the owner of the apartment building is seeing a spike in non-payments and eventually there is an eviction that’s filed. That’s a layer of motivation. OK.
Another layer of most motivation could be physical distress, meaning the property has like broken windows and a roof that’s leaking or shingles ever falling off or they’ve got, you know, landscaping that’s not tight or a kitchen that’s 15, 20 years outdated or more. Bathrooms that have leaks. Maybe there’s cracks in the foundation and there’s leaking in the foundation. Maybe the property just has lots of stuff that’s piled up, lots of cosmetic things that are piled up. New paint, new flooring, new HVAC systems, et cetera, et cetera. That’s physical distress. And then finally, you have a vacant house, a vacant house, meaning nobody lives there. And so there’s all of these different layers of seller motivation.
And when you’re in a tight market, a tight market means it’s a seller’s market. There’s not a lot of inventory and anything that’s, quote unquote on the market, on the market with a realtor on the market, with, you know, a listing agent on the MLS or on Zillow or realtor dot com. There’s a ton of activity. There’s a ton of showings because everybody knows how to find deals that are, quote unquote on the market. All right.
I actually have a listing that just went live today. You can check it out. You can look it up on the Internet. Two eight zero one West Royalton Road in Broadview Heights, Ohio, just listed it today for three hundred andninety-nine thousand nine hundred dollars and went live on the MLS today. It went live on Airbnb today. And we’ve been doing like a coming soon listing for the last couple days. So we’ve already got six showings lined up today and tomorrow, you know, 400000 house. It’s amazing. Go look at the pictures. Look it up 2801 West Royalton Road in Broadview Heights, Ohio. Look up the pictures. It looks amazing. Check it out on Airbnb. You can find that on Zillow, realtor.com, the MLS, Trulia, all that stuff. But there’s already six showings and there’s already three Airbnb bookings in the next couple of weeks, including Thanksgiving weekend, because there’s a lack of inventory.
OK. So if you’re just waiting for stuff to hit the MLS, you’re waiting for stuff to hit Zillow, you know, you’re going to be enough super competitive situation. I’m hoping as a seller of this of this property for on a grand I’m hoping I get multiple offers and we get into a bidding war and somebody bids the price up and we make even more money.
And then in the middle of the property, while we’re waiting for it to sell. We’re also going to Airbnb it and make some cash flow, OK? You should try that. That’s a little tip for you. But that is the you know, that’s the old way. That’s the conventional way of doing real estate. The way we do real estate now is we find sellers who have multiple layers of motivation.
OK. So let’s look at this for a second. So I was given some data. And if you’re on if you’re on YouTube right now where you can go over to YouTube, you can catch this podcast, this training on YouTube. You’re going to see my screen. And we’re going to talk about the moratoriums, the eviction and the foreclosure moratoriums.
What’s interesting is, is if you look at April and May of 2020, the data that’s on my screen, there’s actually more 30-day delinquents and more 60 delinquents in May and April and June and July and August of 2020. Then there were during the Great Recession of 07, 08, 09, 2010.
So there is more deal higher delinquencies right now, but the foreclosure inventory has declined in April, May, June or July. So the delinquency rates are up. But the foreclosure rate inventory is down because of the federal eviction and foreclosure moratoriums signed by President Trump to give everybody more time to let COVID, you know, try to everybody get resettled from COVID and get their jobs back and be able to afford their rent and their mortgage.
In 2021 and ‘22 and 2021and 2022, excuse me, you’re going to see here’s about twelve thousand. Business as usual completed foreclosures each and every month. So those are going to continue to happen now because of the federal foreclosure moratoriums that have been passed through December thirty first of twenty twenty, you’re going to see a backlog of one hundred eight thousand additional foreclosures that are backlogged that go into next year.
So one bucket of motivation is pending business as usual foreclosures. There’s twelve thousand of those per month and there’s going to be a hundred eight thousand backlogged foreclosures that have been postponed due to the federal foreclosure moratorium. So that’s the second big bucket. The third big bucket is all the people have entered into forbearance agreements. So there’s about five million forbearances that have been started. About a million of those forbearances have gone into loan modifications. And out of those loan modifications, about 25 percent of those loan modifications will fail based on past performance of loan modifications. Twenty five percent of those will fail. That’s data directly from the government. Twenty five percent of loan modifications fail. And those people end up in foreclosure.
So to total this up, the next two year tally for 2021 and 2022, you got almost seven hundred thousand new foreclosure actions. You’ve got three hundred thousand business as usual. Twelve thousand a month, which adds up to 300000 business as usual. Foreclosures, plus one hundred eight thousand that are backlogged from this year. That will push into next year plus 250000 loan mods that will fail.
It’s about seven hundred thousand foreclosure actions. Now, to put that in perspective, in 2007 and 2008, there were one point four million foreclosure actions in 2007, 2008. So it’s about half. So it’s not Armageddon. COVID is not causing the Armageddon of two thousand seven, eight, nine. We’re not going to have a banking crisis. We’re not going to have banks that are literally going under. We’re not going to have a monetary problem because there’s so much money in the system right now. But we are going to see about half the number of foreclosures.
OK, so lots of opportunity coming. Lots of layers of motivation coming. You’re also going to see it’s about a 30 percent increase. So in 2018, 2019, there are about five hundred thousand foreclosure actions. OK. So when you get to seven hundred thousand foreclosure actions, that represents about a 30 percent increase. That’s what you’re going to see.
Now, on top of that, we don’t know how well these evictions are going to impact homeowners because some of these eviction moratoriums are being pushed out. We don’t know if tenants are going to be able to afford the rent. We don’t know if there’s going to get more stimulus. That’s going to get passed. OK. This election is coming up in less than 30 days. OK. So when we talk about you as a real estate investor, the first thing that you need to be successful as a real estate investor is to find houses at a discount and then most likely come from sellers who would want to sell at a discount because they have multiple layers of distress.
So the house is the problem for them and they’re willing to sell it, unload it and get rid of it. That’s no longer something that they have, you know, any kind of emotional tie to. They need to sell it because they need get out from under it. They get out from underneath it because they have all these layers of motivation. OK. So like an out of town owner who also has high equity that want to unlock and their pace potentially facing a new foreclosure, can’t afford the payments because there’s an eviction and the house is now vacant and the house has physical distress. So what I’m specifically teaching my members right now is how specifically to find these sellers who have all these layers of motivation.
So what we’ll do is we’ll put some links in this podcast. We’ll put some links over to our webinar so you can go watch our free class? It’s about a 60 to 90-minute class that you can check out that specifically addresses this issue of if you’re a real estate investor, how do you find sellers with multiple layers of motivation?
And we’ll make sure that you get the link, it’s gonna be in the show notes and we’ll make sure that you can register for that class and that will show you how tough kind of fish in a pond where there’s boatloads of fish that you can fish for because they have all these multiple layers of seller motivation. OK. Over the last six months since COVID hit back in March of 2020, the number of sellers who are selling now of multiple layers of motivation’s is astonishing. They have evictions. They have foreclosures. They have equity. They have a property they inherited. They’ve got a notice of default coming. They have an eviction coming. The property is physical distress. They’ve got equity that they want to unlock. And they’re an out of town landlord.
So don’t fall in this old conventional mindset that you’ve got to just go buy foreclosures. Don’t go after those old conventional mindsets that you’ve got to find properties that are just absentee owners or properties that just have high equity.
What you want to do is stack these layers of motivation on top of each other so that you can find sellers who really, really, really have to sell, not might consider selling, but have to sell. All right.
So that’s our strategy going forward. That’s the strategy for the next two years. It’s absolutely working right now. It’s going to work for the next couple of years. If you’re interested in learning more, check out the webinar, check out the show notes and we’ll teach exactly how to do it. If you’re on the webinar and you like what you’re hearing and you want to take the next step, the next step is jump in to our what’s called our immersion coaching program. It’s 30 days of live coaching. It’s four live calls a week.
You’re absolutely going to love it. Take that next action if you think that makes sense for you. All right. So, guys, I got to run the doorbell’s ringing. The dogs are going bananas. I’ve got to sign some loan documents. And I got to sign a new bank account for a new 16-unit building that we’re buying from a seller who has multiple layers of motivation who is selling a 16-unit apartment building. So it really works. I actually couldn’t have timed that better to be recording this live podcast and have my doorbell rang and my dogs go bananas where I’m actually signing, closing and signing up bank accounts for a brand new million-dollar apartment building that we’re literally closing on tomorrow. Couldn’t have planned it better. You guys are awesome. If you’ll like this podcast, leave us a five-star rating. Check out the show notes for that webinar. We’ll talk to you soon. Take care.
Hey, Josh here. And do you want to win a free Accelerated Investor T-shirt? All you have to do is give Accelerated Investor our podcasta rating and a review on iTunes. OK. Do that now then send us a screenshot on Facebook, Instagram or Twitter. What we’re going to do then is every week we’re gonna pick our favorite rating in review and we’re going to send that person a free T-shirt and maybe again, some other cool fun stuff as well from Accelerated Investor. So, again, don’t forget to take a screenshot, leave a rating review, take a screenshot, send it to us so we know exactly who you are. And then once a week, every week on the podcast, we will announce a new winner. Don’t forget to take a screenshot and send it to us so we know exactly who you are. We’ll announce a new winner every week.
You’ve been listening to Josh Cantwell and the Accelerated Investor Podcast. Leave a comment on our iTunes channel and let us know what you want to learn next, or who you’d like Josh to interview. While you’re there, give us some five-star rating and make sure to subscribe so you can be the first to hear new episodes. Follow Josh Cantwell and his companies, the Strategic Real Estate Coach and Freeland Ventures on all social media platforms now and stay up to date on new training and investment opportunities to start your journey toward the lifestyle you’ve always dreamed of. Apply for coaching at JoshCantwellCoaching.com.
In a normal real estate cycle, finding a motivated seller is a little easier. The classic Ds, death, divorce and debt, were the old ways that real estate investors could find sellers who were ready to unload a property at a discount price. But COVID has changed all of that, and you need to change your strategies too.
It used to be enough that you could find a foreclosure and the bank was happy to work with you to get it off the books quickly. As a real estate investor, you have to find deeply discounted properties to build your portfolio. Paying retail or even close to retail prices is a quick way to lose your profit margin.
We know there’s a flood of foreclosures coming to the market soon. Now, they’re not going to be 2006-levels of foreclosure, but they’re definitely going to shift the market. My Motivation Webinar is designed to help you find sellers who have more than one reason to sell their properties today. It’s not going to be enough to just look for properties in probate.
This webinar is going to teach you how to stack reasons together so that you can pay far below retail price for a property. It doesn’t matter what kind of niche you operate in; wholesalers, fix and flippers, rehabbers, multi-family, and AirBnB investors all need to find deeply discounted properties to increase their profits.
- 25% of loan modifications will fail, and what that means for real estate investors.
- How I’m making some cash flow on a property that I just listed on Zillow.
- What a motivated seller looks like, and what their property looks like too.