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Single-family home (SF) portfolio investors – a recession may be on top of us. Are you ready for it?

Should we worry about a recession?

Yes, it looks probable that we’re heading in that direction. Why? Because right now, inflation at over nine percent is the highest it’s been in forty years. One of the big reasons is the spiking cost of gas, a side-effect of the Ukraine war and sanctions on Russia – a massive gas and oil supplier. Another is the supply chain glitches that are creating shortages in every industry. Indeed, neither of these two inflationary drivers looks likely to end anytime soon.

So, the fed is rapidly raising interest rates, which inevitably results in a recession. Treasury ministries in other countries like Australia are doing the same thing. Thus, if or when a recession hits, the ramifications will likely be global. Did you know that bumping interest rates is the primary economist’s tool? Some say it’s the only tool with the power to cool down a hot economy where demand exceeds supply.

Inflation, recession, and property

Over the last two years, property prices in the US residential and commercial markets have been screaming up energized by the low cost of funding. There are hardly any states, including Alabama, where single-family home, condo, and townhouse valuations haven’t at least doubled since COVID-19. However, after two fed 0.75% rate hikes, mortgages are currently accessible at over six percent loan charges annually, probably seven percent (i.e., jumping up from 3% two months ago). So another way of looking at it is that the fed’s economic initiatives are throwing cold water in buckets on steaming consumer demand to cool things off. Appetite for real estate is no exception to this.

Many property investors with portfolios of SF homes are often asset-heavy and cash-light. In addition, they have one or two problematic SF homes that won’t sell seamlessly through traditional realtor methods. The reasons may be iffy tenants, fire or water damage, weighed down by liens, or some other difficulty getting it show-ready. Indeed, you may be an everyday homeowner with one of these issues. Now, if you believe there’s an oncoming recession, you should realize when it happens:

  • Today’s dilemmas get worse.
  • The homeowners’ party in a vibrant real estate stalls.
  • People who have overextended their resources take price cuts to offload their assets.
  • Cash is king to buy new SF inventory for less money, with many opportunities to do just that.

However, getting cash ready is easier said than done.

A reputable home cash buyer may be the answer.

We advise that now’s the time to swing the pendulum, to weed out the weak links and sell them to reputable home cash buyers for fast money conversion. What’s more, do it while there’s still price stability. The massive advantage to you is getting an offer in twenty-four hours and closing with cash in your bank account within a week. How’s that for an answer to changing the asset/cash balance?

Furthermore, there’s no realtor’s commission payable, a saving of at least 6%. When you sell your houses or condos to professionals in the cash-for-homes business, there’s no need to address poor curb appeal, declutter, or renovate. There are no show days or a need for staging the rooms. Moreover, dealing with problematic tenants is all in a day’s work for experts in this buyer category. They’ll move them out of the equation without affecting their offer to you.

Here are some other crucial considerations:

  • Traditional marketing through a realtor makes sellers vulnerable to low valuations disrupting the deal after receiving a valid offer.
    • Conversely with a cash buyer, because there’s no mortgage, appraisers can’t hold things up.
  • With an MLS transaction, the buyer’s home inspection may discover defects for repair, diluting the agreed price you thought was firm.
    • On the contrary, a home cash buyer’s offer is net of these costs. In other words, the first one you get is guaranteed not to change.
  • Working through a realtor with all the property preparation and MLS marketing can take two months to conclude a deal, or more.
    • Versus one week with a home cash buyer.

Indeed, a home cash buyer solution is the easiest way to clean out the sticky parts of your portfolio and recycle the money into dynamic properties at cut prices when market conditions change.

Naturally, home cash buyers must make a profit. A good part of this comes from saving you commissions and some closing costs. They start with a comparable value for the neighborhood and establish a fair fee for erasing traditional inconvenience. It can be the shortest route to a healthy bank balance with no hiccups.

Conclusion

Professional home cash buyers can resolve numerous problems in the blink of an eye (e.g., helping you negotiate liens down and dealing with non-paying tenants). So if you want a fast solution to deals gone wrong in Alabama, contact Home Buyers Birmingham today.

Sell Your House Within 7 Days!!!

So what do you have to lose?

Give us a call at 205-687-0604 or fill out the form to get started.

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