In my spare time, I am a bit of a horse trader in real estate. I have purchased and sold over 20 commercial buildings and homes at all price points. I’ve used realtors and sold properties myself. I’ve bought foreclosures and short sales. I’ve remodeled homes and purchased spec homes. I just completed building a new home on a lot that I eyeballed for 10 years. It’s my hobby.
I’ve been thinking there is a looming collapse of the Airbnb and Vrbo model. Desperate owners will need to get rid of pricey investment properties they can’t afford anymore. Why? Hotels have lowered prices, and people are tired of the hidden cameras and lack of amenities in many Airbnbs.
So, if I am right and you’re house shopping, thinking about your own investment property, or know someone who’d love to own a home, I’ll walk you through what’s going on and how to take advantage.
Their loss is your gain
I’m expecting a lot of previous Airbnb properties to start hitting the market — many from foreclosures (when a bank repossesses a property) and short sales (when a bank works out a deal with the owner to avoid foreclosure).
Those properties can go for significantly less than their full value … if you can find them and beat the competition. Luckily, there are apps that work much better than just typing “homes for sale” into Google.
Pro tip: For short sales in particular, keep your eyes open for code words like “subject to bank approval,” “notice of default,” “bank or third party review required” and similar language. That lets you know the owner is forced to sell and prices are likely lower.
Oh, and since foreclosures and short sales can be tricky to navigate, you’ll probably want to have a local property agent with a ton of experience at the ready.
Start at the source
HomePath and HomeSteps are managed respectively by Fannie Mae and Freddie Mac, two federal mortgage companies. These organizations usually have a front seat to foreclosures and related home deals, and these sites help you search their databases directly.
You can get notifications, first-look categories and other helpful tools, so they’re a great starting place. Score: They’re free to use.
Tools the pros use
Try a realtor service that can search local MLS (multiple listing service), where short sales and foreclosures first show up on the market.
One of my favorites is Propwire, a search service with in-depth info on 157 million listings. It’s essentially free to use with an account. The similar PropStream app is another option.
The public option
Some of the best advice for highly competitive markets is to stay patient and watch local public records. Specifically, court filings for pre-foreclosures and foreclosures indicate that a property owner is looking for a way out and could offer a juicy deal you’ll know about before anyone else.
The problem is that local public records websites are, well, annoying. I like to go right to the Justia database and search by region instead. It’s a much more user-friendly way to get public records on demand.
The paid services that might be worth it
If you don’t mind a subscription fee, RealtyTrac is speedy, has an excellent UI and provides many details in one spot. You can browse pre-foreclosures and foreclosures to look for deals, then get lots of advice on when and how to purchase. However, it costs around $50, so begin when you’re serious about home searching.
Another option to consider paying for is Foreclosure.com. It has a free search feature, but the $40 subscription gives you access to more listing data, plus you can see lender files and other handy details to spot the perfect opportunity.
Since foreclosures and short sales can be tricky to navigate, I’d advise eager house hunters to connect with a local property agent with a ton of experience once ready to buy. Happy hunting! And be sure to check out my guides on great budgeting and cash back apps — every little bit helps when saving up for those closing costs.
