Joe Homs explains mortgage forbearance protections set to expire December 31, 2020, and what real-estate investors should do. He covers cash strategies, short sales, creative financing, and note investing as opportunities in the shifting market.
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Morning investors, Joe Homs here, H&M Realty Group, and I'm here to talk to you about something really important that's headed our way. It's called forbearance. If you're not familiar with forbearance, right before— right after COVID hit, Congress and Senate passed a law that basically said you could stop making your mortgage payment for up to a year. Well, that period ends December 31st, and so, um, are these people all going back to work? Are they going to be able to make their mortgage payment? Um, pretty much December 31st is a drop-dead date for all this to occur. Obviously, there can be some changes. We have an election coming up, and I don't want to bring politics into this, but let's talk about some opportunities. Uh, with forbearance as an investor. I recommend that you get into cash or cash equivalents as much as you can because I think there's going to be some great opportunities at the end of the year. Not everybody 100% is going to be able to start making their mortgage payment again, and so then the banks are going to have to decide, okay, well, what are we going to do with these folks? Okay, if we go into the the past, 10 years ago, we were heavily doing short sales at the time. I think you'll start seeing a lot more of that coming out, short sales and possibly even some creative financing. I'm working a deal now with some creative financing, and it's a gentleman that decided he wanted to rehab his place and started to do the demo, demoed the whole place, and just threw his hands up in the air and says, I'm done. Forget it. So I'm looking to, you know, take over the first loan, go in and rehab the place, hopefully in about a month or so, and then come out the other end and sell the place and pay everybody off. So there's some creative financing deals that are going to be headed our way. Okay, very important, you need to focus your discipline. So what it is that you're looking for, what it is that you're looking to do, Are you looking to do fix and flips like I do? Are you looking more to do buy and holds? Are you waiting for this crash to come because of the forbearance and the market starts to go down? I don't think you're going to see, especially in California, I'm thinking you see a lot of that here, but you may see that in other states. I know that there's other states are having way more difficulty here than here in California and especially Southern California. So focus your discipline, what it is that you want to do. Do you want to do buy and hold? Do you want to do flipping? Do you want to do note investing? Whatever it is, focus on what that is. Become an expert in that and so that you can take full advantage of what's going to happen in, in the next 3 months. 4, I always say invest as locally as possible. Now again, this is Southern California. We're a very expensive market. But if the prices drop like they did 10 years ago, that'd be a perfect time to come back in and start doing your buy and holds. Okay, so invest as locally as possible. You'll be able to get the most assistance as locally as possible. You'll be able to talk to people like me who've been doing this for the last 40 years to give you some good advice and, and some ability to move forward. When all of this happens. So anyways, look for this forbearance ending in December, December 31st, and see what happens after that. If the banks are really nice, they may extend that out. I don't think that's going to be the case, so they're going to have to come up with some different rules after that, but we'll see. Congress may get involved again. We don't know, but it's always best to be prepared, and this is a biggie coming. So hopefully, hopefully you're all prepared to do something when this happens. Any questions, please give me a call. Any comments, I'd love to hear your comments, what you think. Obviously, this is my crystal ball. I'd like to hear your crystal ball and see what you think. Do you think any of this is going to happen in the next 3 months? How are you preparing? Uh, so let me know. I'd appreciate it. Thank you very much. Thank you.
