On today’s podcast episode, I talk about how to find deals in 2025. The market has shifted and 2025 will be a big year for change in real estate. 

The Current Real Estate Situation

Real estate prices are up by more than 50% since 2020. The 30 year mortgage rate has increased from a low of 2.65% in 2021 to above 7% today. Anyone who purchased real estate before 2020 is sitting on a lot of equity, and most likely refinanced into a very low interest rate mortgage. These homeowners have no incentive to sell. This is one of the main reasons why inventory has been so low. 

But what about homeowners that need to sell their house because they are relocating, downsizing, or for any other reason? What about sellers that have lost their job, are in foreclosure, have become sick or disabled, or are unable to afford their monthly mortgage payments? 

Sellers Are Delusional

We have sellers like this calling our office every day. And I can tell you that in my opinion most of these sellers are in denial and delusional. They still think that their house is worth what Zillow said it was worth two years ago. However the reality is very different. In order to sell a house you need a buyer. And that is where the problem lies. At the current prices and interest rates, the average American can no longer afford to buy a home. So buyers wait, while sellers slowly start facing the reality that real estate prices in Florida have declined. 

Investors that fix and flip houses for a living are feeling the pressure too. Price declines means they may flip the house for less than originally anticipated. Refinancing from a hard money loan means higher interest rates and higher payments. Many of these fix and flip buyers are sitting on the sidelines waiting for deals to materialize. If you are buying fix and flips in this market, make sure you are buying deep. If you were buying previously at 70 cents on the dollar, build in a margin of safety and buy at 60 cents on the dollar now. I am seeing amazing fix and flip deals with damaged properties. Focus on that if you are fixing and flipping. If you want to learn how to fix and flip make sure you attend my Fixing and Flipping Houses Boot Camp.

Increased Inventory and Lower Prices

The inventory of MLS listings has substantially increased over the past two years. Sellers that are motivated to sell are slashing the prices on their listings. Foreclosures are increasing and I am starting to see more and more short sales and bank owned properties on the MLS and on online auction sites.  Some markets have already had substantial price drops of 20%. There have been a number of negatives for real estate over the past few years including higher prices, higher interest rates, more inventory, rising property taxes, higher insurance and higher HOA fees. 

Where To Find Deals

Sellers that are truly motivated to sell are facing a market with less buyers. A seller that is motivated to sell because of property damage, fire, flood, or hurricane damage is having a hard time finding a buyer. Some of these damaged properties can be purchased at a low enough price that makes sense for a rehabber looking to fix and flip or for a landlord looking for a cheap rental. Look for damaged properties. 

Short Sales

Sellers that have lost the equity in their home, (which is anyone who purchased after 2022) who want to sell are having a very difficult time too. They are realizing that they cannot get enough from the sale of their house to pay their mortgage off. They have already lost their down payment and some of these sellers are simply starting to walk away. This is an opportunity for you as an investor to purchase their property at a discount by having the bank agree to a short sale where they accept less than the balance owed on their mortgage. I am currently working on a few deals like this that are short sales. They were all purchased at the peak of the market.

Foreclosures and Bank Owned Properties

I anticipate that as more negative equity homeowners walk away, we will see more and more foreclosures and short sales. Many of these homes will become bank owned properties that will be listed on the MLS and on online auction sites like auction.com, and Hubzu.com.  This is why you need to learn how to buy and bid on bank owned homes. I will be teaching how to buy and flip bank owned properties at the Bank Owned Properties Boot Camp which is coming up in a few weeks. 

Buying Subject To The Existing Mortgage

Homeowners that purchased at the peak have lost the equity in their home. But they may have a really low mortgage rate of less than 3% and they may be willing to let you assume their mortgage. There are literally thousands of deals out there where you can buy a house from a seller and assume the mortgage. Learn how to buy houses “subject to the existing mortgage” and you will find many deals like this in 2025. I teach buying “subject to” at the Creative Financing Boot Camp.

Seller Financing

Older homeowners that want to sell or relocate may be willing to consider seller financing. Look for sellers who have been trying to sell for a long time and who have become more motivated to reduce the price of their house. Seller Financing is a strategy that you need to learn how to deploy if you are looking to buy real estate in 2025. I teach seller financing at the Creative Financing Boot Camp as well.

Wholesalers 

Wholesalers are realizing that they need to make offers at lower prices. If they want to entice buyers like me, they have to buy at a low enough price for the deal to make sense. The days of wholesalers marking up deals by substantial amounts is coming to an end. Wholesalers will need to adapt by buying low or they will go out of business. 

I am seeing some decent deals coming out from wholesalers over the past few weeks. We are currently negotiating to buy a $200,000 ARV house for $70,000 and a $370,000 ARV house for $215,000. Both of those deals are from wholesalers. If you are looking to learn how to wholesale, now is a great time to start because as sellers get more motivated, they become more desperate to sell and are more likely to sell at a discount. You can learn how to flip these houses to other investors for a profit. I teach how to wholesale at the Wholesaling Real Estate Boot Camp.

HUD and Government Entities

I am seeing some deals on Hud Homes, Fannie Mae and Freddie Mac Homes. I am currently working on negotiating a $400,000 ARV house to purchase at $250,000 that was listed by a Government Entity Site. While there are not a lot of deals now, they are steadily increasing. Pay attention to this and learn how to buy and bid on these homes. I teach how to buy and bid on Hud Homes, Fannie Mae Homes and Freddie Mac Homes at the Bank Owned Properties Boot Camp.

Direct Mail Marketing To Motivated Sellers

This will be the number one way for you to find deals in 2025. Direct mail (postcards) to targeted lists of motivated sellers is one of the most consistent ways for you to reach homeowners that are truly motivated to sell. Learn how to buy lists of motivated sellers who are in foreclosure, delinquent on their property taxes, in probate, have code enforcement violations, vacant properties, liens and absentee landlords. Market to them consistently and the ones that are truly motivated will be willing to sell their house at a substantial discount.  

Pay Per Lead Providers

Learn how to buy and source motivated seller leads directly from Pay Per Lead Providers like I Speed To Lead,  Motivate Seller Leads, Property leads and other PPL providers. If you are a new investor this is a great way for you to practise talking to sellers without spending a lot of money marketing. This is also a great way for you to get comfortable with your script and how to talk to sellers over the phone.  I teach my coaching students how to do this live at the Wholesaling Inner Circle. We have one coming up next weekend.

Pay Per Click and Facebook Ads

If you want unlimited inbound motivated seller leads then consider learning how to market to sellers using Google Pay Per Click Ads and Facebook Ads. While this is more difficult to set up, the reward is more highly motivated sellers. Online marketing with Google Pay Per Click and Facebook Ads is the easiest way to get yourself in front of sellers who are truly motivated to sell. I teach my coaching students at the Wholesaling Inner Circle how to deploy these online marketing strategies to have motivated seller leads on autopilot. If you want to up your game in 2025 and buy more deals at deeper discounts then learn how to employ this strategy. 

Driving For Dollars and Bandit Signs

If you have the time, driving for dollars and bandit signs still work. But I would rather see you trade your money for your time versus trading your time for money. Remember the phrase “Stop Trading Your Time for a Paycheck”. This principle is clear. You are better off spending money to have inbound leads coming to you, than you are spending your time soliciting and calling and driving around looking for deals.

Buying Properties on the MLS

Listings on the MLS are visible to everyone, so there is a lot of competition for MLS listings. But we still find deals all the time on the MLS. Remember that every bank owned home, online auction, HUD, Fannie Mae or Freddie Mac home is also listed on the MLS. Get into the habit of searching your target market daily for deals. When you find something you like, call the listing agent and make an offer. 

Strategies that I Do Not Recommend

Texting, cold calling and any form of outbound marketing to seller’s cell phones is not a good idea. If you are reaching out to consumers on their cell phones in 2025 you run the risk of getting in serious trouble that comes along with hefty fines. The Telecommunications Privacy Act and the Florida Telephone Solicitation Act essentially prohibit reaching out to consumers on their cell phones. This applies to both cold calling and texting. This may have well worked in the past but is not worth the risk today.  Learn how to focus on inbound leads. Inbound leads are where you will buy at the deepest discounts and make the most money in 2025.