GUESTS: Eddie Speed & Joe Varnadore

Since 1980, W. Eddie Speed has dedicated his professional life to the seller financing and non-performing note industry. Over the years, he has introduced innovative ideas and strategies that have positively impacted the way the industry operates today. Eddie is the founder of NoteSchool which trains people how to buy performing and non-performing mortgage notes. He is also the owner and president of Colonial Funding Group LLC, which acquires and brokers discounted real estate secured notes. He has also launched NotesDirect.com, which makes buying notes as easy as ordering on Amazon.

Joe Varnadore invested in his first property at the age of 19, and knows the importance of using creative financing to make deals work. He has created and brokered more than $30 million in note transactions on 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.

Here at NSTV, we’re committed to searching out the most impactful news stories affecting real estate and note investing. More importantly, we discuss what’s behind the headlines. You’re definitely not going to hear these news items on the nightly news. And we have some very important updates for you today as we wrap up December and 2021.

You already know home prices are up and the market is still crazy. But in this 45-minute March Market Update, Eddie Speed and Joe Varnadore give you an in depth look into financial news to explain why the market is so crazy and how long the craziness is expected to continue. More importantly, they explain that even though home inventory is down and prices are high, there’s still an ample supply of bargains right now for investors—if you know where to look

As our subscribers know, every end-of-the-month Market Update on NSTV packs the most punch “minute-for-minute” for real estate investors than any mainstream news outlets.

TIME STAMPS:

2:00 | Joe introduces Eddie Speed. He explains that they do a lot of narrowing down to decide which stories to include in the end of the month update.

4:18 | What’s great (which is the tip of the iceberg) is that oil and gas prices have come down a bit, and residential housing market continues to rage. What’s not great is that over 2 million loans are in default, and that’s not getting talked about much. Landlords are continuing to burn out, and mortgage availability is still in flux. About 30% of people who could qualify for a mortgage before the pandemic can’t qualify today.

6:35 | Crude oil is down a little bit, which helps consumers save a bit at the pump.

7:37 | Property appreciation is going through the roof. The overall value of residential real estate grew by $6.9 trillion in 2021 to $43.4 trillion, which is more than double the level from a decade ago. Properties owned by landlords have increased in value, and there are strategies to work with landlords to buy their properties and help them offset capital gains taxes.

9:45 | The average home value is now $331,533, which is up 32.4% YoY. Eddie calls this unprecedented! Monthly rent is now up 17% to $1,883. But the average home mortgage payment has gone up even more than the average rent.

12:30 | Top ten markets are Tampa, Jacksonville, Raleigh, San Antonio, Charlotte, Nashville, Atlanta, Phoenix, Orlando, and Austin.

13:42 | Loans in forbearance are up. This has brought a renewed focus on investing in nonperforming notes (the only place to find bargains).

16:43 | During the pandemic, 8.3 million loans entered forbearance, and 72% of loans in loss mitigation are not making payments.

18:40 | Loans that are behind on payments by 30 or more days are about 2 million. There were about 200K foreclosures between 2016 to 2018, but only 35K between 2019 to 2021 due to moratoriums.

21:39 | Mortgage Industry Advisory Corp. (MIAC) reports $1.1 billion in Ginnie Mae loans up for sale, which is a total of only 4,512 loans). Half of these came from only 6 states.

23:41 | The housing market enters uncharted waters with home price growth combined with increase of delinquent loans. (This is a good thing for investors because the notes have high equity.) Zillow predicts price growth of 17.3% for the year.

25:58 | Mortgage rate soars close to 5% in its second huge jump. One year ago rates were 2.65% for a 30-year fixed rate. With home prices and mortgage rates higher, mortgage payments are 20% higher than a year ago.

28:20 | The typical US home in 2021 is $321,634, which is $52K higher than YoY. Interestingly, the median full-time US worker earns about $50K. So the average guy who owns an average home made more in appreciation than by working at his job! But if he sells it, where’s he gonna go?

29:39 | The National Association of Realtors (NAR) reports that housing inventory at end of February, 2022 totaled only 870K units, Before the virus, a healthy inventory was a benchmark of about 2 million houses. The low inventory makes prices go up.

32:09 | Monthly inflation rate hits 7.9%, and that’s scary! One year ago it was 1.75. Affordability is everything.

34:22 | Inflation is expected to get higher in 2022.

35:30 | 90% of potential home buyers are concerned about rising energy prices. Commuting distance was also a concern, due to cost of gas. Milder climate is also important for energy costs.

37:01 | Evergrande (the huge Chinese real estate development firm) delays releasing their financial numbers as banks seize $2 billion in assets. Because Chinese companies invest highly in the US, expect more impact to come.

39:57 | Zillow predicts wild home price swing because the housing market isn’t normalizing. Prices are currently still going up, but not quite as quickly.

41:30 | Brian Lauchner brings a message from today’s sponsor, the upcoming 1-day “Gold In Notes” class. The class covers key topics such as: How to create notes, raise capital, defer taxes, wholesaling notes, how to create partials, make money from performing and nonperforming notes (which is a huge opportunity), and much more!

43:04 | The message of the year is: Seize market opportunities. Look for the voids and the bargains. A big opportunity is to buy on terms from burned out landlords.