Recently Released Economic News Will Affect You and Your REIA

Recently Released Economic News Will Affect You and Your REIA

Time to Worry About Stock Market Bubbles


All the changes in the national economy and real estate market indicate one clear thing; investors are confused. They need guidance and a strong network around them. That is why we compiled data and statistics to present at the NaREIA Mid-Year event in Denver in June 2014.

Since that event, even more data continues to prove our point:

  • Nobel Laureate on Economics, Robert Shiller, says that stocks have been more expensive only three times in the last century: 1920’s, late 1990’s and the prelude to the 2007 crisis,
  • 2013 was the worst year in history for the Bond Market,
  • Mutual Fund giant, Vanguard, says that IRA’s are being used as money market parking lots.

This shows that investors are weary of the stock market, afraid of the bond market and are sitting in cash-like positions. Expect these investors to turn their focus toward “value buys”: real estate and real estate notes.

Make no mistake; these new investors will change the market! How well you position yourself for these changes will determine how well you do (or don’t do). Think about how the hedge funds changed the REO and rental market over the past 2 years.

Here are some projections:

  • Large cash buyers (hedge funds) will exit single-family real estate and focus on selling rent-backed securities and purchasing large pools of non-performing loans

  • New “value-seeking” cash investors will be looking for turn-key investments

  • Millennials are not ready to move out of Mom and Dad’s house just yet and when they do, they will rent not buy

  • Re-performing notes will continue to be priced historically low as hedge funds and private equity firms buy non-performing notes and re-sell them after modifying the loans.

  • REO inventory will have spurts of growth but ultimately continue to shrink as banks liquidate their non-performing assets through note sales to quickly meet new government regulations

  • Non-performing note inventory levels will remain mostly unchanged as shadow inventory is leaked into the market countering the sale of these notes

  • Short sales will continue to fade unless Congress retroactively reinstates the Mortgage Debt Forgiveness Act

  • Notes on <$500,000 commercial and multi-family properties will be sold by large investment firms to small investors

~  Joseph Varnadore

Want to learn more?  Be sure to check out the Educator Page for Eddie Speed and NotesSchool where Joe is one of the very experienced investor instructors.  And be sure to save the dates in January when NoteSchool’s founder, Eddie Speed will be in Kansas City as you will not want to miss either event.

Meet Joe Varnadore:

Joe Varnadore invested in his first property at the age of 19, and has since created, brokered, bought, and sold more than 10,000 real estate notes on both residential and commercial properties. As an author, speaker, and trainer for the past 25 years, he believes that there has never been a greater opportunity for real estate investors to use non-performing notes to acquire properties and seller financing to cash out.