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Category: Real Estate
Tags: EconomyForeclosuresGovernmentInvestingRealEstate
Entities: CaliforniaChicagoFannie MaeFHAFreddie MacJohn HoffmanKrogerMr. CooperWall Street
00:00
The whole thing is a gigantic mess. Pain is coming right now.
The foreclosures have been masterfully hidden. It's a disaster.
Like 20 to 35% of these FHAs. They're basically just giving them equity loans every year.
Here's another equity loan. No interest.
Put on the
00:16
bag. You can pay us later.
There's going to be nothing left. They're running out of rabbits to pull out of their hat to keep this thing moving.
They've gotten away with it cuz the values have been like held serve. But wait till this thing starts moving downward.
It starts with cracks and then the whole thing implodes, you know, and right now all the cracks are starting to show.
00:32
Think there's a big mortgage fraud scheme that's about to be uncovered or you think they won't just won't do anything about it? I mean, if you want to call it fraud, but it's it's really it's the government.
They're the fraud. I mean, you're basically giving these people an equity loan every year.
No charge, no paperwork. We know you got your mortgage
00:49
with you, and as long as there's equity, they're giving it to him anyways. The fraud is really our government at work.
What do you tell the seller that says, "John, should I wait those till spring? Should I wait for rates to come down?" Do you want to sell?
Get it priced right and get rid of it now. Don't mess
01:04
around. This thing's changing quarterly right now.
I'm seeing quarterly. Trouble's brewing.
Several months ago, not even 6 months ago, John was saying that his market was still firecracker hot. And so, we're getting a different report.
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I've been listening boomer stuff, you know, boomers, a lot of boomers, and you know, it's like the whole all all that commission BS. It's like they just want it sold.
They don't they don't all all
01:54
the all the trickery and all the magic and the oh I don't have to pay and this and that. They just want guidance, you know.
Just tell me what I got to do, John, so I can get rid of this place. There's no, you know, I don't know.
It's uh that Yeah, in Illinois, the Midwest,
02:10
it's like it's Midwest and the Northeast still hot, but but it's f it's starting to waffle now, man. Lot stuff's getting reactivated.
A lot of reactivations, longer market times. We got people putting it on and putting in offers and putting the contracts together and then
02:25
they're falling apart. Well, what happened to the guy?
He walked. He did he did the home inspection.
Didn't want it anymore. They didn't even negotiate.
You know, I'm like, "Hey, let's negotiate some repairs in and it's getting it's definitely coming down, man. Welcome to the party, pal." As uh
02:41
you know, uh what's his name? Die Hard Man would say, you know, it's like it's it's coming apart now, man.
Telling you, it really is. John, have you seen where the agents are advertising a dollar home?
Yeah, the that's age-old auction, you
02:56
know, hey, price it low and then over bid it. But those don't stay together.
Those deals do not stay together because that's that's the FOMO. They over bid, then they go, "Wait a minute.
What the hell have I bought here?" You know, and I've overpaid for it. That was happening
03:12
with in 2023, you know, and people were overpaying. And actually, honestly, you you're seeing now, like in the last six months where they're they're over bid, you know, you're still getting multiple offers on stuff and then they're going, "Yeah, we did our home inspection.
We're
03:28
out, you know." Okay. Then you go back to the next guy and I've had properties now that have sat.
I I list it. It's hot hot to trot.
20 showings, four offers. Put it together.
Guy does a home inspection falls apart. Everybody else
03:44
fails. So now I'm sitting there on the market for six weeks and it's a ghost town crickets, you know.
Yeah. So that's what I'm telling you right now.
It's starting to crumble here, too. And it's like it's not there, you know?
And then there's there's so much bad actor verbiage out there. What
04:02
this and some of the stuff I sent you like that guy that they were interviewing that that real estate attorney and he's like, "Oh, what? They need to drop the rate the Fed rate so that the rates will come down." It has nothing to do with it.
And it's it's like, are you not educated enough to know in September they dropped the rate
04:18
of half a percent and the mortgage rates went up? I mean, it it just it kills me, man.
It kills me. We're going to show that clip.
And for those of you that are tuning in, this is John Hoffman. He is a real estate broker in Illinois and um he specializes in foreclosures.
Yeah, John, I have that uh
04:36
want to pull that up here in a minute and show people this FHA investigations report so you can explain it. Um Oh, yeah.
Yeah. You've also sent me a couple things I want to cover where California has some bill uh I don't know whether
04:53
it's passed or proposed or whatever, but where they want to halt second uh mortgage foreclosures or or second positions. anyone that has a heliloc or whatever a second position, they want to prevent them from being able to foreclose when the homeowners don't pay
05:10
them. Um, but you Josh, so you're you're seeing that even in Chicago, last time that we spoke, um, you had said the the Chicago suburbs kind of the areas were still kind of hot and you're saying that now you are
05:25
seeing this turn. Absolutely, Mark.
Uh it's like anything under 300. We were at we I think we were at like 52 units back in June.
Now we're about 72 on average. And most of them are pending.
You know, okay, they're all pending. So it's still hot, but you're
05:42
seeing the reactivations. Cancelled contract, reactivate, cancelled, reactivate that.
You know, these buyers, they're they're not buying this this this program anymore. They're just not they're getting savvy.
They're starting to go n they can't afford it. you know, in the end they can't afford it.
And and
05:59
if you know, I I have clients that they have people telling them, "Hey, man. Well, you know, when they drop the rate, when the Feds drop the rate, that's when they'll get high." I got people going, "Hey, I'm not going to list till he drops the rate." It's like, well, look at September.
They dropped at a half a
06:16
point and the mortgage rates went up. That has nothing to do with it.
But, you know, not to get off track, but it's like it was it's it's been smoking hot. But the last like 2 3 months you're starting to see it starting to then look the market times are getting longer just a little market times are getting longer
06:32
more stuff coming on the market. You got more competition.
You're not selling them overnight anymore. Well, you're seeing where builders are offering 3.99%.
And you know they've been offering five and five a half% for several years now and it hasn't helped. So lowering the rate I mean let's play
06:48
that. Let's let's kind of we'll we'll we'll play that clip right now that you had sent me.
Um and then we'll we'll kind of talk about it now that we're talking about uh rates pandemonium. You know, if where you know most of Wall Street is predicting up to four cuts this year, rate cuts.
If you
07:05
get to a point where you're 100 basis points lower today and mortgage risk could hover between four and a half to 5%. I think the market takes off utter pandemonium.
And the reason I say that is that we've had three consecutive years of 30-year low in transaction volume throughout the United States in housing. Now, this is real pent-up
07:22
demand. I can't I've been practicing law for 20 years.
We had the largest residential practice in New York City. I can't remember the last time I saw this long of a decline in transaction volume that you know that when the three when the cycle turns, it's really going to turn significantly.
07:39
And you were mentioning these expected rate cuts. While mortgage rates have been falling in hopes of that uh coming in September, there's no guarantee that that's actually going to happen.
We've been thrown curveballs before by the Fed. Um I do want to show our audiences.
The 30-year fixed mortgage rate averaged
07:55
6.58%, the lowest level in 10 months. What does that tell you all of this information?
And is it more beneficial for a buyer to maybe wait it out? You know, to be honest, it tells me we're nowhere near ready in terms of
08:11
boosting transaction volume. 6.8% what the exact number you mentioned, forgive me, is nowhere near what is it going to take to get the market going again.
Think about it. 70% of America has a rate locked in under four.
You have to create a market where sellers
08:27
have an incentiv incentive to sell at a value that you know we've created in a post-pandemic world and buyers can afford it right now. So you have an absolute affordable affordability crisis in America.
So the only way to fix this is lowering rates. There's no other special formula.
It's going to take
08:42
years to create the supply additional supply that'll bring prices down. And even that you're not going to create development without reduced reduced rates because everything is so expensive.
Insurance is an all-time high. cost of labor, cost of materials, cost of land.
So, economically speaking, you're going to be in this stagnant
08:58
world until rates come down. That's really it.
You know, I know inflation may be slightly higher than the Fed would like. I know it's clear they want to get closer to the 2% target fully there yet, but it's looking like it.
Uh employment statist statistics were not great, which is, you know, really going to I think put the pressure to actually
09:14
cut rates. But at the end of the day, if you want to help housing and you want to get housing going, which is the backbone of our GDP in this country, you have to cut rates, you know.
So, John, John, he obviously I think he said that he's been uh practicing for 20 years. He
09:32
obviously doesn't remember 2007 when the Fed dropped rates, mortgage rates started going down and it didn't help. No, no, no.
He that that that that is so clueless where that we have to
09:49
drop they have to cut rates. It's like he he he's not even linking that into the mortgage.
He thinks that that that yeah, maybe in some down the road when that affects something, but but if they cut the rate even even a half a percent, that's not going to do anything. That's
10:04
not going to move anything. They still can't afford it.
I mean, people people think if they cut them to zero that we're going to have another influx. Well, we're already up 40% in value, so okay, let's let's jack it up another 20 to 40% if we do that.
It it it makes no
10:22
sense. They can't afford it now.
Most of these people are they're and a lot of these contracts are getting cancelled because the mortgages are getting denied cuz they can't afford it. I mean, we're doing we're the deals we're putting together are have all these trick bag moves to them to get them in.
Like, oh, we need another two weeks of income and
10:38
you know, hey, can we get a you know, you clean houses and just write up a receipt to show that you're cleaning houses on the side. This is all BS, man.
All the job numbers are BS. I mean, you know that that's why Trump's basically firing the Fed because he wants to get guys in there that'll get these rates
10:54
down. Basically, they want to cut the rates so they can afford their debt.
Well, then do that with the guy with the car payment. Why can't you cut his rate for him?
You know, it's just the whole thing is a gigantic mess. Pain is coming right now.
The foreclosures have been
11:10
masterfully hidden. You know, as you know, you know how I approach all that and I've been I've been working on researching that for about a year, almost the last year.
And it it's like it's a disaster. Like 20 to 35% of these FHAs, they're they're basically just
11:25
giving them equity loans every year. Here's another equity loan, no interest.
Put on the bag. You can pay us later.
These people are going to be there's going to be nothing left when this they're running out of rabbits to pull out of their hat to keep this thing moving. And and then they've gotten away with it because the values have been like held serve, you know?
But wait till
11:42
this thing starts moving downward, you know? I mean, it's like when that that tub sank that that that that ship sank looking for the Titanic.
It starts with cracks and then the whole thing implodes, you know. And right now all the cracks are starting to show.
Yeah. Well, uh, good point.
And when
11:58
home prices continue to go down, the equity is not there any longer. And they're trying, they're bundling these loans and selling them to Wall Street investors and and even some smaller investors, big pools and small pools, Fanny May and Freddy Mack.
They're not
12:13
hitting the market. What do you think's happening with all this mortgage fraud?
You think there's a big uh mortgage fraud scheme that that's that's about to be uncovered or you think they won't just won't do anything about it? Well, the the there's it's I mean, if
12:29
you want to call it fraud, but it's it's really it's the government being the I mean, you're basically giving these FHA people and the VA and believe me, I'm doing I'm starting to research the Fannies and the Freddy's now, the loans they've been backing, and it's the same deal. I haven't really gotten into it yet to find the numbers on it, but but
12:45
they're the fraud. I mean, you know, you're basically giving these people an equity loan every year.
No charge, no paperwork. Oh, you know, we know you got your mortgage with you and as long as there's equity, they're giving it to them anyways.
These how most of these houses when and I'm listening to these
13:01
people cuz I we mail all these FHA mortgages that are, you know, at least two if they've had two workouts. We we mail go, "Hey, you need help?
Give us a go." Well, we're going over there and these houses need 100 grand in work because they've never had any money in the last four years to even deal with. I
13:17
mean, they can't even worry about maintenance. They're worried about just kicking a can down the road and then, you know, the mortgage re redo their mortgage.
So, they take the 20 grand they owe and back due payments, throw it on the back, and then it's another it's rent, wash, rinse, repeat. You know, and that's why I mean the fraud is really
13:34
our government at work. It's too much government.
They're they're you know all these we we should have been in in dire straits moving into 2019 2020 it was heading that way. I mean I was starting to get more AROS and then boom they shut the thing off.
You know that that's all
13:51
got to come through. That's all that's going to come through.
That's a a building dam right now that's all sitting out there. You know and these hedge funds are starting to hunt down agents to list their stuff.
I mean, that's be that's the new REO is going to be these hedge funds getting rid of some of these properties, but you know, the
14:08
rental market's still pretty hot. So, they're they're keeping these properties moving.
They're keeping them rented. But, you know, the the to answer your question, it's like the fraud is the government.
And they don't even it's not even, you know, it's not like it's fraud, but it's it's a it's a experiment that's gone way wrong. Now that was
14:26
great for co 2 years, 2 and 1/2 years, maybe three, but now it it's it should have been shut down, but now they're like, "Well, wait a minute. There's no blood on our hands.
Fanny and Freddy, they just pull these up and, you know, and I I send you those those polls they
14:41
do." And it's like they're there. If you ever read their introduction, Larry, it's like, "We're proud to announce that we've sold off another, you know, $1,500, 1,500 mortgages and you, you know, I'm sorry, but you can't tell me if you foreclose, did it as an REO, it
14:57
wouldn't be, you'd make more money on it." Let's go ahead and pull up what you're talking about here. Performing loans, the non NPLs and RPLs.
And this is what you're talking about when you're talking about the pools being sold, Fanny, selling these NPLs, which are non-performing loans and and RPLs, which
15:14
are reperforming loans. I guess they were in default, went through modification, and then they're reperforming maybe for the last couple of days.
Anyway, explain what we got here. Yeah.
Well, basically, they're pooling these loans. um you know and they present it in that paragraph and it it's
15:31
not real obvious but it's like you know they announced the results you know we're all excited that we were able to do this sell off these 1300 deeply delinquent loans totaling 285 million in unpaid principal balance okay these loans are are what are they selling
15:48
those for 50 cents on the dollar maybe maybe 60 where to me why are we foreclosing on those because they don't see they'd rather have somebody else foreclose on it. That way it's not in the news that they're the bad guy, you know, and and these loans, if they would
16:04
just foreclose, I mean, what's that going to cost them? Maybe 20% total to actually foreclose on this guy.
But then you're provide, you know, you can take that home, paint it and carpet it and give it to a new buyer. Okay, those most of these 134 deeply delinquent loans are not going to
16:20
be sold. Whoever's buying these this, you know, RCF2 loan acquisition, they're going to turn those in around.
They're required to honor any approved or in process loan mitigation efforts at time of sale, including loan mods. Purchasers must offer delinquent borrowers a
16:36
waterfall of loss mitigation options, including loan modifications. But that doesn't none of that means that they, you know, that once these units are sold there there's there's who's policing that, you know, come on.
I mean, let's get real. This is an investment company
16:52
that's buying these. They're not going to sit there and keep them in there for 2 years.
This is uh the government pushing these off and making it look like, hey, we did our job. Let the next guy handle it.
These should be reos. These should be foreclosed.
Sorry, folks. Not everybody can own a home.
17:07
Foreclosures are a necessary part of evil. I mean, it just is.
You're going to have foreclosures in any market. The greatest, the worst, it doesn't matter.
But that's why we're sit here now. We have no foreclosures.
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Now, back to the show. Explain for everybody listening that doesn't know what an ARO is.
It's a it's a word for uh real it's real estate owned. It's basically when a
18:27
property, you know, when you go into foreclosure, bank goes it goes to auction, the bank forecloses, they take it back. that becomes an ARO at that point and then they come up with their plan of what they're going to do.
You know, they're gonna most of the time they're going to take it. You pick whoever's in there, paint it, carpet it,
18:43
fix it up a little bit, resell it to a new buyer. Okay?
Like I said, those that 1300 loans, you're not going to most of those will never hit market. They're going to be rentals.
They're going to be whatever or there'll be flips, you know, for them, but but you won't see the foreclosure. So,
18:59
you won't be able to see in headline news, foreclosures are on the rise because this is the 27th sale they're announcing of bundles of mortgages. And what's happening is because Fanny and Freddy, they ensure these most of the
19:16
conventional loans that are out there. They're not they're they're protecting the bank saying, "Look, we're going to not go through the foreclosure process.
You're not going to get bit or experience any of these losses. We're insuring these loans.
We're going to bundle them up, take, you know,
19:32
basically extract them from the pools of mortgage back securities. We're going to bundle them up.
We're going to sell them to investors and we'll never have to deal with them again. The public won't hear about all the foreclosures unless you have a friend of yours that their loan was sold in a pool to an investor
19:49
that kicked them out. Unless you knew the person that's happening, it never hits the news.
These these companies don't want to publicize the fact that they took bought these houses for nickels and dimes or whatever on a dollar, 40%, 60% of loan value. Um, or
20:08
maybe it was higher, but whatever it was, they're not going to want it publicized that they were the bad guys and threw these people out and then turned them into rentals for their own benefit. That's why they're buying these.
They're not saying, "Let me buy
20:24
troubled loans." They're not saying, "Let me deal. Please, let me deal with the agony of not getting paid and and and extending these people." No, we've modified it.
You have to honor those modifications that we've already done, but they're not going to give them more.
20:39
They're not going to give them more modifications, right? That's where the party ends.
It's going to end there. It'll be like, "Oh, you can't pay.
You got three months to pay." Whatever. Then they're out.
And that'll be easy for them. They do evictions all the time.
these these you know the these hedge funds they just that's they they send one person to
20:55
court with 40 files and they evict them all at one time you know yeah it's it's a and and you know and it's like the FHA mortgages the government told had basically worked out with the servicesers that we'll pay you to keep them in there and we'll make up the loss
21:13
and we'll pay you a fee to manage it while they're in there and it's like you know that's what I mean it's like all the money spent on this nonsense just to keep keep it from headline news. Explain sererers because a lot of people that are listening they don't know what a serer is.
21:29
Well, the you know when you take out your mortgage sometimes they'll sell it what are most of the places that do the actual loan they're not serer they're going to sell it off to like a Mr. Cooper um you know I'm trying to think of a couple other ones but like Mr.
Coopers ago and that's a serer. Okay.
So
21:45
they service the loan. They're basic they get a little bit of money to sit there and manage this loan taking your payments, paying your taxes, all that.
And you know when when you're struggling and the government steps in and they go, "Hey, Mr. Cooper, we'll pay you to keep this guy, you know, keep that mortgage going." I mean, you know, why wouldn't
22:02
they? They're they're they've been making a nice tidy income off of all these mortgages that have gone bad that are going bad.
And I mean, all they're doing is is stalling the inevitable. These are going to go south.
John, when somebody doesn't pay their mortgage, and just to kind of piggyback what you're saying, the serer you had
22:19
mentioned it, um they're paying the taxes, paying the insurance, that's who establishes the escrow account. So, if you're listening and you and you have a mortgage payment and there's an escrow, which can go up every single year because your homeowner insurance goes up, your property taxes go up.
So, you
22:34
think you're going to keep the same mortgage payment throughout, but you won't. It's going to go, your mortgage payment is going to go up every year.
And um and basically they collect that money from you and they're the ones that send you the letter that says that your escrow account is under capitalized. Now
22:50
you need to either, you know, pay us another $3,000 or your payments are going to go up um if you don't lump sum the the shortage. And then basically they they pay the taxes on a bianual basis if it's residential and they pay your insurance premium.
It's because if
23:07
you don't pay that, um, then you're in default of your mortgage all in itself because the government can can override and take first position. If you don't pay the government your property taxes, they will foreclose on your house regardless of any first mortgage that
23:22
you have. And your insurance, one of the things that you guarantee when you sign your loan papers is you're going to keep the property insured to protect the lender should your house burn down or have some kind of devastation.
They want their asset protected. If you don't pay your they're not going to let you pay
23:37
your insurance on your own because if you don't pay it then then your lend you're in default of your loan and your lender is going to go ahead and get a high risk policy and if you don't pay that they're going to foreclose. But so what happens John when the borrower is
23:53
not paying their mortgage their taxes need to be paid their insurance needs to be paid per the protecting the uh the lender. Who pays that if the if the borrower is not paying it?
Well, the the the lender well the lender pays it. I' I've had just recently I've had a couple
24:10
of distressed sellers selling and they hadn't paid in a one of them hadn't paid in almost a year, but you know, they pay the taxes, they'll pay the insurance. I mean, the policy stays in place because the uh the lender's paying it, but you know, if it's an FHA, uh then
24:26
government's paying it. That's our money that's paying it, you know, and that's the problem with it is just stalling these.
keep stalling these and now these a lot of these people just keep getting farther behind it, you know, and I mean it's all they're all doing it based on equity, you know, because and and I do a
24:43
lot of BPOS, which I you know, we talked about that broker price opinions and I'm getting a ton of them for interiors to go to people's homes to give them to do a report, take some pictures, send them a report to show what it's worth and how much work it needs. They're starting to
24:58
do those now like, well, wait a minute, how much work do we need here? because this guy's on his sixth uh you know workout.
Explain a BO in more detail. You're contacted by the lender because they aren't paying their mortgage, right?
Well, there's two BPOS. There's a driveby, which is the when you're 3
25:13
months behind, boom, they call an asset company that will which I work for these these management companies, and I know they'll basically order me to do a driveby bal, take about six pictures, go back to the office, do a report. Is it vacant?
Here's what ballpark it's worth. Done.
the interiors, which I'm seeing a
25:31
lot more of now, is they basically they're doing a workout, but they're probably at their max workout. And I've been kind of talking to these people like, "Well, what you know, what's going on?" And they're like, "Yeah, we've been struggling this and that.
We're going to give us a new mortgage, but we they want to know what kind of condition the property's in." And I'm like, "Oh, okay.
25:47
Well, that's that's a start in the right direction." You know, but I'm seeing more of those coming now that I'm going into these and and it's all it's all neglect. When you reach out, how do you get a hold of the people to say, "Hey, I need to come in and take photos." The the lender gives it to me.
They give
26:02
me the contact person and the phone number and then they call them. I go, "Hey, look, I work for Y Rent.
I'm here to do I got to do a interior BO on your home and then they you know, if they don't let me in, then the bank doesn't give them their loan. If they let me in, then I go can do my report and send it into them." But, you know, that that's
26:19
where, you know, I think they're starting to do the interiors now because of the fact that they know it's starting to slip, you know, so they're like, "Well, we don't want to be too far into this guy." You can see everything's starting to come apart right now. I can see it even here.
And it's and you know,
26:34
Florida, it's one thing. Texas is another, you know, Georgia, those are all starting to slip bad.
Up here, it's been great. But now I'm seeing it here.
I'm seeing that the market times are higher, more properties coming on the market every day and and deals falling apart. That's like the first sign of
26:50
this thing getting soft. John, when um when somebody stops paying their mortgage, how long do you think they could actually stay?
As long as they keep communicating with their serer, how long can they pull the wool over the lender's eyes? And what kind of
27:07
is the process of that uh before ultimately their loan is sold or it becomes a REO or the bank forecloses is not sold off in one of these pools. What tell us what you think that process would be like right now.
Well, we we I
27:25
believe we in one of our shows we did a uh we posted one of those that showed guys are getting their mortgages in 2020 21 and they're getting a workout every year. I mean, it's it for up until now
27:40
it's been inevitable. It's been So, they don't have to write any monthly payments for a workout?
No. No.
There's they they don't even qualify. I I you know, and I I could be wrong on this, but I think you you know, you had to at least be working to get that, but I've been I've been told that
27:57
some of these they don't even have to have a job. But the uh you know, it it they just it's been going it's been ongoing.
It doesn't matter. It's gone on forever.
But the FHA now October 1st, they're shutting that down. Not shutting it down.
There's still going to be some
28:12
guard rails in it. They're they're putting in guardrails to make it tighter.
So, you can't just, you know, get away with it forever. You're only going to get one workout after October 1st.
And that year, that'll get passed before headline news. That'll get past the November
28:29
midterms. Yeah.
Well, it's October 1st. That's when that's kicking in.
So, that but but that won't show up for Yeah. That won't show up for a year.
I I've been I've been saying for the last 6 months, middle of next year is when you're going to see the pain. middle of
28:45
next year, late mid to late next year. That's when you're gonna really start seeing craters coming up all over the place.
I just I don't I don't I don't I'm not a you know I'm not a genie or anything, but I can just see the I can forecast that out with that. That's
29:00
where you're going to start seeing it in the news. So, do you think that someone can still stay in their house not paying their mortgage not knowing what's going to happen officially in October or whether that will get delayed?
But do you think that it's practical to say that uh somebody
29:16
could stop paying their mortgage and could still stay in there for another 3 to 5 years? Uh yeah, I would think so as long as there's uh equity there.
I think that's the that's the key right now is that the it's 30% equity and you know, everyone's gotten so much equity in the last 3 four years. there's plenty of equity loans to
29:33
go around, you know, problem is they're not equity loans. They're the government going, "Hey, and you know, Fanny and Freddy, they haven't put any guard rails in place.
It's still ongoing, you know, so that's just going to continue on for I don't know how long, you know, until it'll go on until
29:49
the values fall. That's when this whole thing is going to just collapse like you've never seen this.
This could be colossal if if the all the strings get pulled out the right time and the whole thing, you know, where the jobs, the the housing, the rates, all that just, you
30:06
know, infuses into one big bomb. It could be really ugly.
You know, I I'm seeing I don't know about you, but I'm seeing a major it's kind of like eerie out I mean, I'm going on uh showing appointments and
30:21
there are no other appointments when you can look in showing time and you can see like if there are other appointments besides yours and there's no appointments on that brand new listing for weeks to come that you could see and no one's there when you get there. You're by yourself.
You're hanging outside. You're there an hour.
Nobody's
30:38
coming by. Usually, you know, a brand new house hitting the market, you would have several showings coming at the same time.
or you know, you would be arriving as someone's leaving and the same you'd be leaving as somebody's arriving. So, we've got it's it's almost like a ghost
30:53
town. It's eerie and but I'm also seeing where it looks like businesses are even slowing down and for sure.
Yeah. And and and not just in the like the businesses like I was at the grocery store and walking through the aisles and
31:08
they were stocking the aisles at like 1:00 in the afternoon. Now, when I was a kid, I worked in the grocery store industry for a short period of time, and um you know, just through school, high school, and um they were stocking the shelves.
And I had never seen that
31:23
before. I mean, I'm not talking about people picking items to bag for people to pick up or to have a home delivery.
I'm talking about people were stocking the shelves at 1:00 in the afternoon. And I said, you know what, this is usually done at night.
So now we're seeing where they're probably letting
31:39
their night shift not work at night but trying to squish everything together. But look at this.
So um there is a daily jobscut.com. I don't you know I don't obviously they're not a sponsor.
I don't get paid to show them but I like to go on this periodically because I like to
31:55
see what the heck is going on. And you know there's there you're seeing industries that you wouldn't typically um see laying off people.
But the big one here is look at this Kroger, right? Kroger, a thousand,
32:11
just shy of a thousand corporate jobs. It says this article here on grocery dive says Kroger announces corporate layoff structural changes.
The company said it cuts the cuts impact less than a thousand employees a as the grosser
32:27
continues shaving off costs. It says Kroger's latest round of corporate job cuts marks that at least a third round of layoffs at the company within the past eight months.
Based on more than a dozen LinkedIn post on Tuesday, a sizable number of layoffs impacted
32:43
employees in Kroger's technology and digital division. One employee from the division who was laid off today said in a phone call with Grocery Dive that he was surprised by the move, stating that Kroger's most recent quarterly earnings show positive results in the company's
32:58
e-commerce and digital model. Then it goes on to say in June, the grosser announced plans to close around 60 underperforming stores by the end of 2026, complete 30 store projects throughout this year, and speed up new store openings next year.
So far, Kroger
33:14
has put at least 39 stores on the chopping block with at least 18 having already shuttered. Now, you know, the the crazy part about this, can you imagine being a grosser and and and and having or even being a supplier to the grosser and and now your product's not
33:32
sitting on the shelves and if it's perishable, it's going in the garbage can because people can't afford to buy. They're buying price conscious.
They're doing price conscious shopping. A family of four is spending about $400 a week in groceries.
I mean, that's crazy. 1,600 a
33:49
month, right? Yeah.
Well, the uh seriously, Todd, look at the job this whole job fiasco. Okay.
They they you know, they they adjusted down the two months huge. I mean, you know, from whatever, I don't
34:05
remember the numbers, 120,000 to like, you know, 19 or something. Two months in a row.
And then they give us the bogus July number. You know, Trump has and this isn't political.
It's just, you know, he has a heart attack because these numbers are all bogus, which they are. Okay?
Because the last two, three
34:22
years. It's funny how the numbers are always adjusted down.
How many times have they been adjusted up? Couple times.
In the last couple years, you know what's going on there. So now they're saying they may not even release the job stats because they don't trust them.
Okay. Well, that's even better.
34:38
The whole thing is just, you know, the the unemployment rate is 4.2. It's like I think it's like six.
If the use six is what, you know, eight, six or eight, you know, it's they don't even measure this stuff. They measure it so it looks good to them whatever they need it to be.
You
34:53
know, I don't think the unemployment rate will ever get to seven again because there's they'll they'll just put in more stop gaps to keep it from getting there. I mean, this whole this whole thing is madhouse.
Here's the thing. If you read that Kroger article and it talks about
35:09
cutting corporate jobs, why are they doing that? And and one employee said, "But the numbers were good." The online the um basically the east e store, whatever it said, um was um the numbers were good.
He doesn't understand why he
35:25
was laid off. Well, hello.
They care about shareholders, okay? They don't care about the people.
They care about the shareholders because if they don't have good numbers, if they don't cut these top paying jobs or higher paying jobs, these corporate jobs, they're not going to show good numbers. So, they
35:42
have to cut these numbers or cut these jobs of the higher paying people in when times are getting tough because the shareholders will get scared and sell their stocks and that will be a ever fulfilling prophecy of doom. So, what happens is, you know, people wake up.
35:58
This is it. You're not these cashiers probably aren't the ones that have the money to go out and spend money on houses.
These lowerpaying jobs are not giving people enough money to survive or buy the groceries that they sell. So,
36:14
you know, it that's what we really we got to pay attention to that just like you're saying. It's like cutting the bagger at the grocery store.
That's like the Titanic losing a debt chair. I mean, it doesn't make a dent in what they're trying to do, you know?
Right. Yeah.
And it's the whole all the jobs
36:30
thing. And that's another thing that people Oh, but the unemployment's fort blind, too.
It's like, how long are you do you really believe that? I mean, is anybody who does any kind of homework on this stuff, you know?
And the people that are like, even with me and you, it's like, oh, you guys are just doom guys. It's like, no, we I I've been in
36:46
REO since 2007, and I know how it works. I know how the trend works.
I know how the program works. And even in the best of times, you're going to have foreclosures.
for this to be just like shut off. It doesn't work.
There there's no there there it's being completely
37:03
manipulated and there you're gonna pay the price for it. It doesn't matter.
There's a price to pay and it's going to be here sooner or later. You know, obviously they all hope it's later, but it's coming because it's because you can only keep all these sandbags going at the same time and then eventually one of
37:19
them cracks and then all of it starts falling apart at the same time. Well, you know, I always like to say it's like telling someone it's not raining outside when it's torrential downpouring.
If you go outside, you're only going to believe it until you're soaking wet. So, you don't have to listen to what they're
37:34
saying in the news. You don't have to listen to the politicians.
All you have to do is look at your own checkbook, look at your, you know, your in your pocket. Look at how expensive things cost.
And now it's I think we're finally
37:50
it's we're waking up. People are like damn this is you know you say that we're uh talking doom.
We're we've really because John of our age and because of our experience in business and managing people through the years managing
38:06
people's problems helping them get through. I mean, look, real estate is a very emotional process when you lose a house or need to sell a house because of a death in the family or because of a job loss or because
38:22
some kind of illness or whatever it is. Look, we help people through some of the hardest times in their life, some of the happiest times of life, some of the hardest times in their life.
But we've been saying for the last couple of years is showing up in mass scale right now. It is
38:40
happening. If you're watching this, you know it's true.
You can't sit there anymore and say these doomers are telling you a bunch of bunk. Look at your own bank accounts.
Look at your bills. You're now looking at your your uh your monthly cost and saying which
38:56
subscription can I get rid of? or where you where just six months ago or a year ago you weren't even thinking about your subscription.
In fact, this new company came out um where they're like, "Hey, pay us x amount of dollars. We'll scrape the internet and tell you what you're paying for." And people are like people
39:12
are on the street interviewing, "Hey, John, do you know how much you spend in subscription?" "Oh, I think I pay like uh you know, maybe $60 a month." And they're like, "Yeah, you pay $460 a month." They're like, "I do." It's like, "Yeah, you do." you know, so pay us to show you uh you know how lax you are
39:30
with your spending, right? Let's let's pull up this California article that you sent me.
Um and and talk about that, John. Will new California law freeze all second lean foreclosures?
39:45
Yeah. I mean, really, you know, I mean, what's what's our ultimate goal with this?
to keep it keep the blood off their hands, keep it out of the, you know, no, we don't whatever reason 08 in 08 whenever, you know, obviously
40:00
everything went haywire. Foreclosures everywhere.
Okay. And now we're so far off on the other end that now we're not going to have any and we'll just figure out a way to hide these and the government can pay for them.
You know, it's like people what people need to understand is you're paying for that.
40:16
you know, you're and that's why that's why a lot of these cities like Chicago. They're they're they're like, "Oh, we got a $4 billion deficit on our budget." Well, I wonder why.
Because you just you you spend money like idiots, like drunken sailors, and you you have and
40:32
you don't look at cutting anything. It's just a matter of sitting here just keep piling on and then go back to the people and get more money.
This is just more inflation. That's all this is.
This is you guys, me and you and everyone else on the show paying for this. You know, what are you going to do with this guy?
40:48
So, if what so he just blows off his second mortgage and doesn't pay it and we let him stay. I mean, it just it doesn't make any sense.
You know, we got to protect the people. I understand that, but this is too much.
Just is. It wasn't long ago, and we may have even
41:03
spoken about it in the past, but it wasn't that long ago where they were pushing home equity lines of credit because they were saying, "Hey, you know, guys, you can you've got all this equity. Go ahead and get a second mortgage." Um, and and use that equity to continue spending so we can hopefully
41:20
continue. I haven't heard much about it.
I I don't know whether people took advantage of it. I know a lot of people have used it to pay off higher credit card debt.
So, they gave up their 4% or three and a half% mortgage to get a 7% mortgage because they want that some loan officer was slick enough to
41:37
convince them that, hey, you can pay down. It's worth it's worth refinancing your entire home and your credit card debt just to shave a monthly payment down on your credit card that you're paying 24 25% interest on per year.
So, let's take let's refinance your home to
41:53
satisfy that $10,000 debt, which is stupid. So, you lose your 3.5% mortgage.
You're now placed with a 7% mortgage, but we got rid of that credit card debt. And by the way, you don't even have to cut up your credit cards because once you wipe it out, you can just try again.
42:09
Maybe you'll pay them off every month if you try again. Right.
But pulling this article up, they make it seem like this is a good thing. And this is mortgage the for sure.
Yeah. they always present it as it's a oh this is the best thing since sliced bread.
It's like it makes
42:25
no sense man. This is where the allergic is completely gone at this point.
When it says in a recent attempt to address foreclosures on zombie second mortgages zombie it's like whoa zombie does that what does that mean? Yeah.
Yeah. The zombie that's the vacant
42:42
homes that have been sitting vacant that are that are in foreclosure and it's like Yeah. The whole thing is just insane.
Completely insane. So, but what do you think they'll only do it for the zombie second mortgages or you think that once they get this law
42:58
passed? Did he sign?
No, they'll expand that to everybody. I mean, that's the problem with all this stuff is that it expands and they once they get it in place, then it starts it starts, you know, absorbing everything else around it that that doesn't make sense that they shouldn't do.
And this
43:14
doesn't I don't care if it's a zombie bacon house second mortgage. Why would you do this, you know, this doesn't make any sense, you know, and and you know, failure failing to communicate and writing, you know, you read some of this why what they're why they're looking at this, then get rid of the lender.
You
43:31
know, if that lender failed to provide a notice of servicing transfer, get rid of the lender. Then, you know, quit bailing out the banks.
And that's been that started way back in 2008. That's why this is this isn't like Trump or Biden or Trump 1.0.
It's this has been going
43:49
on. This has been building for the last 17 years of just bailout city.
Tell us about this FHA investigations that you sent me. Okay.
Well, here if you look at, you know, I got them highlighted there obviously. Um, you just started not that
44:05
not at the top, the second one down. 2021 detached that's the type Aurora area 129 is the school district so Aurora is basically three school districts all right there was 632 overall closings in 2021 from January 1
44:21
December 31st 193 of those were FHA VA the delinquent ones were there was 36 out of the 193 so that's 18% all right so that's that's 2021 you go down to 2020 about notches
44:36
down to uh the 2020 detached Aurora 204 district. Okay.
392 overall closings. F FHAVA closings were 74.
18 of them were were are delinquent. And when I say
44:52
delinquent, that means two workouts or more since they took out that loan. Well, and a lot of these are four, five, six, seven del seven workouts.
So that's 24%. Next one down, 2021.
I mean, this is just giving you a feel for 2021 204
45:09
476 closings, 62 FHA, VA, and you know, 13 of them delinquent 21%. But you can see the ones that I've highlighted anywhere from 15 up to 24%.
And you know, I I'm just now starting on
45:25
uh Fanny and Freddy on a conventional loans. I haven't even looked at any conventional loans.
This is just Faj. And you can see some of these numbers.
I mean there, you know, there's very few of these that are less than 15%, 20%. You know, but and so these are the these are the years
45:42
completed. So, and then what the delinquency is the current state of delinquency.
So, the loan was made in 2020 and that's the current of that. Yeah.
Yeah. These are these are Yeah, these are basically the delinquencies
45:57
like like the 2020 detach 204 district. Um, if you look down, you know, the third one down, it's highlighted.
Okay, you got 74 closings of FHA VA only. Uh, of those 74, 18 are delinquent.
Two or
46:13
more workouts to loan out, one in four delinquent. Anywhere from one in four, one in five and and what you're showing here of these FHA, I mean, that's huge.
Or delinquent. And these would be foreclosures.
And so when a lot of
46:28
people are looking at it and they're saying we'll never have another repeat of 2008, we might have a silent 2008 and and just see the actual results of price deductions in housing. We won't one thing that if unless they start
46:45
changing in the Obama administrations really who started this uh selling off bundles of loans to investors during in 201 I think 12 11 and 12 they really gave Wall Street the appetite for being in the single family housing industry
47:00
where historically they've only had apartment complexes or multif family or commercial um real estate investments. But now what we're looking at is just because we're not seeing the fact of a lot of foreclosures hitting the market,
47:16
we have supersized the bubble from ' 06, from the bubble of 06. It was kind of the peak back then.
We've supersized this bubble and now as a result just because we're not seeing a foreclosure. So a lot of people are like, well, we won't see a home price crash because we
47:32
we don't have the foreclosures that we had in 08 in the crisis. But but we've got an affordability crisis now to where the home prices are so unreasonable.
Plus, we've got a stock market bubble.
47:47
So, the people through the when they lost their minds in the pandemic boom and started giving their kids, you know, $100,000 gifts to buy overpay for a house. Now the the now that they're starting to see that the actual economy
48:03
is showing up and it's not roses like they're being told because they're seeing it. These parents aren't going to be very quick to just go ahead and kick over that over price spending cash for overpric spending.
I don't think that
48:20
they did before. Do you do you think they're going to do it again?
I don't I well and a lot of that money is from COVID from all the rescue money and PPP and you know that money that's starting to get its way out of the system. Throw that chart back up though.
I want to show you something if you would. Uh you
48:38
know this is this is two I've got West Chicago North Aurora Aurora Bavia. Okay.
That's only four cities. Okay.
This is this is let's let's call it on average let's say even if it's 17%. That's this is only four cities in
48:53
little old Illinois. This is this is the le this is the trend.
Okay. I mean that's why this is this is all over the place.
You know this isn't just here. I mean you know yeah okay it's only one in five but it's one in five probably and and there's
49:10
areas that going to be a lot worse. But this is everywhere.
How are you aggregating this? How do you aggregate this?
Well, how do you what do you mean? How do you grab this data?
How are you collecting this? You go to the MLS and most any agent can do, I hope any agent can do it.
In my
49:26
MLS, I can go into all the closed properties that were from, you know, January 2021, January 1 to December 31st, closed, detached only. Um, and then you can go into finance code, which when you close these, when they're
49:43
closing them in 2020, they're putting what the finance code was, conventional, FHA, PA, cash, and that's all there to be had. And then you can also go into uh um like school like I do with school district, stuff like that.
That's I mean I mean that's to me that's near perfect
50:00
information, you know. And then how do you come up with the delinquencies?
Because you what happens is when you go into these properties in the MLS, you click on the finance, you know, there's there's sections in the MLS, you can look up parts of that property and you can go into all the title uh uh all the
50:17
title stuff that's been levied against that property and all the mortgages show up and and when they do these workouts, 20 27,000, boom, it shows up as which we we kind of looked at that in your uh when we did that on the last show when you brought that up. you can see the mortgages, you know, the these these
50:34
quote unquote equity loans that they're giving them that keep showing up every year as you're moving along. But that that information is literally near perfect.
I mean, assuming your MLS can do it or anybody else's, it should be. I mean, it's not like it's, you know, wow, this is really deep info.
I mean, it's all there to be had. It's just stats,
50:51
you know. What are you seeing, John, with um you know, and I'll say that we have uh a lot of houses that are active on the MLS are rehabbed.
An investor bought it, paid too much, spent way too
51:08
much money on the renovation, and now they're sitting on the market. Beautiful renovations, a lot of them, but people aren't falling for it because it's too much.
or they did about 90% and they left 10% which really you you could see
51:26
um I had a situation where I was out with a buyer this past weekend. We were looking at um this one renovation and outside it looked like a dump.
They had just bulldozed all of the looked like building materials or supplies. is they grubbed out a bunch of trees and all the
51:41
stuff was just buried and it looked terrible and probably tens of thousands of dollars in cleanup which if they hadn't done that it wouldn't result in that now. Um but they just said no I'm not interested in this and the house was overpriced in my opinion too.
Um but
51:57
what are you experiencing right now with rehabers? I mean you're still doing that are these foreclosures.
Are you seeing any rehab activity? Any investor activity?
flippers coming in wanting to buy stuff. And what's what does that
52:12
look like? By me, it's rehabbers buying to rent.
They're not you. You get a few rehabers going out there, but they're lowballing stuff right now because they know these prices are not, you know, they're not recapturing what they want to recapture on this stuff.
It's a lot of these are
52:28
just going rental is what I'm seeing. They'll buy them, rehab them, rent them, you know, because they can do minimal on that.
You know, they can do paint, carpet, you know, fix the porch, whatever. rent it out.
And that's kind of what that's what I mean. This my market here is still it on on, you know,
52:44
from from the sniff test, it's still good. But, you know, with being what me and you do, we can see the cracks in it as you start moving along through it, you know.
But, yeah, there there's there's a few rehabs coming out here and there, but a lot of them are just they're renting them. They're buying
52:59
them and renting them. And are you seeing where the numbers make sense?
That 1% rule. So if they're all in for 300,000, they can get $3,000 a month.
You know, the um it's like, you know, who's not buying are the institutional
53:14
ones like the American Homes for Rent. Um you know, those are the guys are are not buying stuff right now.
It's the local guys that are start that are buying this stuff up. And you know, yeah, it just depends on where it's at, you know, but but you know, usually they can get them to cash flow usually.
But
53:31
you know, the the whole that's what I mean. The they're coming in and the ones that need work, they're they're definitely giving them the once over, you know, enough times where they're not going to overpay for it.
Yeah. Where before they would have just bought anything.
Yeah. you know, the buyers would have
53:47
that's one thing, too, like like you know, first-time buyers, whatever. They're they're not buying, you know, it needs it needs, you know, the carpet shot, the PL, the cabinets are old, roof needs a roof, and they're paying full price.
That's not happening now. That's not happening unless it's just, you
54:03
know, magnificently underpriced. But you, we're not seeing that right now.
We're seeing them sit and the market times are getting longer. You know, I think we're we're probably pushing about 55 days.
It was 40 month and a half ago. Yeah.
You know, and people are like, "Oh, well, it's summer time." It's like, nah,
54:20
this is a little bit different. This is a little bit different.
You know, we had no spring whatsoever, right? You know, neither did we.
And that's why, too, it's like this. Well, it's like, too, it's like this interest rate, you know, it's like, oh, he's going to lower the rates in September.
It's like that's not going to do anything.
54:35
Yeah. Okay.
Nothing for real estate. Good.
Okay. Which if you're which if you're a home buyer, this is actually good news for you.
you should be definitely getting prepared to strike while the iron's hot because um sellers that are listing their houses right now, a lot of them,
54:50
they're desperate to sell for whatever reason. It's important that you look at when they bought their home because if they bought it in 21 or 22, you're probably not going to get a deal.
But if they've been in the house for 10 or 15 years and they're selling it now, they probably have equity that you can get a good price cut and get them to also do
55:08
things like allow you to have a home inspection. They'll do repairs, replacements, and also give you um some cash back for closing costs.
So, you can take advantage of this downside. John, what give us your thoughts on I mean, you've been serving the industry for,
55:23
you know, as long as I have essentially on the sales side of things. What What do you predict we'll see with home prices, regardless of the rates dropping to 5 a.5%, which I don't personally see, neither do you.
If it does, five and a
55:41
half% is not going to do anything. It would need to be, in my opinion, lower than 4%, which I just don't see.
But what do you think is going to happen over the next 12 to 18 months with home prices coming down even by mean Northeast? Even Even there, it's coming
55:58
down. There's no you you just you you can't maintain this.
You can't m this is not it can't sustain itself and it's not going to. and you know lower okay even if they lower the mortgage rates they can't afford it they still can't afford it you
56:15
know I a lot of people you know a lot of the old-timers I guess they go man I bought my house in 1980 whatever I paid like you know I paid 12% you know but you bought that house and you you it wasn't like oh my god this rate's so high that's what I mean we have historically low rates even at 7 and a2
56:34
and we're at 6 and a2 and people are you know it's Like that clip you played earlier. It's like, you know, these rates need to come down.
No, we're at historically low rates. The prices have to come down.
Everybody wants to talk about not talk about the all in the room, which is these ridiculous prices,
56:51
you know, and and and these ridiculous prices create the ridiculous tax bill you get, you know, and and this is all just feeding onto each other. And it's like it's like people's, you know, okay, we lower the rate.
They So that means that the house prices go up again, they
57:07
can't afford them now, you know, even if even if you put it at four, I don't think they can afford Most people can't afford it, period. Yeah, they're coming down.
I don't I don't I I'm I've had bets with my buddies around the, you know, around the campfire. Hey, next
57:22
next June, keep an eye on it cuz that's where that's where I think like next June, July, like into next later next year, that's when you're going to see it where you'll talk about it with people around the water cooler. That's where I think you're that's where you're going to start seeing it in the public eye
57:38
because right now this is all just smoke and jobs are oh we greatest economy in the world and we you know real estate is great and it's like yeah just wait man just wait what really be the telltale sign where
57:55
I think people will realize that us being in this industry have a clue to this. So, if you're going to buy right now, you want to try and buy at a next year price or or or somewhere between where you think next year may be and now.
You want to get in
58:10
front of it. Obviously, that if the price continues to drop, if you want to buy now, your lease is expiring, but you just want to buy now.
Or if you have tons of money and you don't care, then buy a house, whatever. You find something that comes on the market, right?
Yeah. I mean, you'll always have that.
Yeah. But if you, you know, if you're
58:26
kind of like you are budget conscious, you need to save, watch your P's and Q's, then, you know, still look at these houses while sales are slow and then go a go ahead in with what you think the house is worth to you and buy it now so
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that if it does continue to go down before it goes back up and I promise you eventually 10 years from now, we're going to see higher prices than we see today. It because that's just the way it works, right?
because of inflation. But I do think there's going to be an
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opportunity here for you to buy less than your buddies have. Pay less than what your buddies did over the last several.
Yeah. And you know, so just be smart.
Just be mindful to what you're doing. Get So what you're saying, John, is and and I agree with you.
Um if you're
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selling a house, you have to be listening to what the advice that we're giving buyers. If you're selling a house, what you said is that we may see some kind of a bottom or a much lower price point in a year from now or less.
Um, what do you tell the seller that's
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thinking, well, I'm going to wait till spring, the spring market, like it didn't exist this year. What do you tell the seller that says, John, what should I wait till spring?
Should I wait for rates to come down? Yeah.
I don't I've got a a investor that owns he's selling some of his stuff off
59:47
right now and and he he I you know I mentioned you he's like oh I heard we're going to drop the rate in September. I'm like it's it it's not going to do anything.
It's going to raise the rates and then you're going to have tough time getting buyers. I'm like if you're going to sell and what I'm finding too and I don't know if you're seeing this you
00:02
know some of these properties on like this investor I'll give him a price in May and it'll be like yeah you know probably you know 3 375. Okay.
And then he's like, "Okay, I did all the stuff you wanted me to do to it. Now it's uh August." And I'm like, "Yeah, uh
00:18
350 3609." Well, you said, "Yeah, it's not. It's that's what I'm I'm seeing right now is this thing's changing on the fly right now." And that's when you know it's getting unstable.
Yeah. Because that's movein condition.
00:33
That's moving. That's the That is what people want.
They want that fresh rehab move in condition. not lipstick on a pig, but a good rehabber that did things right, pulled the permits, you know, spent good money.
That's the inventory that people want. And and that's what I
00:49
was saying earlier. I'm seeing this rehabbed inventory sit and it's like, wow, man.
These build So now the investors are like, when do I cut my losses? Should I just go ahead go there now and it'll cost me 10 grand or 20,000 bucks?
Is that the best case scenario?
01:05
At least I get most of my money back and I get to lick my wounds, wait a couple months until I can make it up on a better priced rehab where I got burned four, five, six months ago with my distressed purchase,
01:22
right? And and it's like some of them are like, "Yeah, I'll wait till the spring.
We'll get more money for it." It's like, "No, you won't. You most likely will not.
And you're paying more tax less money you spend today, right? You're paying taxes.
You're paying insurance with Tomo. Homer's insurance is a freaking joke.
Ha. HOA.
01:38
I mean, you you do not This is This is not If you want to sell, get it priced right and get rid of it now. Don't mess around because this can change.
This thing's changing quarterly right now. I'm seeing quarterly.
So, my price in May is like, uh, okay. Sorry.
Sorry
01:54
about that. You know, guys, because it was right in May, now it's wrong.
And it's like that when you when it's doing that where it's starting to go back and forth and wild and choppy like that, then you know that trouble's brewing. Guys, this is coming John Hoffman.
All of his information is in the show notes.
02:11
This is coming from a fellow broker and and these conversations where we were having with him uh just several months ago, not even six months ago, John was saying that his market was still firecracker hot. And so we're getting a different report now uh here just a
02:29
couple months later. And so for everybody out there that's saying, "But not in my neighborhood and not in my area." If you're going to say that, make sure you put your area in the comments so that we can fact check you.
John, it's always a pleasure, my friend. Any parting comments or words?
02:46
Just be on the lookout, man. It's coming.
You know, I' I've been doing REO since 2007, and sorry, but the last three, four years has been really pulling the wool over everyone's eyes, and this stuff is going to come through somehow someway. They they they can only
03:05
inflate it away for so long. Okay, pe people are struggling.
Mortgages, cars, credit cards, everything, you know, and I'm seeing it firsthand, and it's like it's coming. Just be ready.
you're gonna buy something, make, you know, do your homework. Be make make all the right
03:21
moves and if you're selling, sell it now, you know. Anyways, all right, my friend.
Well, it's always a pleasure. We appreciate you being a returning contributor to our channel and uh and reaching the public.
I know everyone appreciates you. And if you're in that Chicago, Illinois area and
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you're looking to buy or sell, uh reach out to John directly. Again, all of his information is in the show notes.
I'm waiting for you to start your channel up, man. You got a YouTube channel and I think the last video you did was you were the Santa Claus hat or something.
I got too many uh I got too many uh
03:54
distress sellers right now I'm trying to work through. Trying to get the trash.
Right. Right.
Totally. But uh yeah.
Well, good to see you, man. We'll see you soon.
Always a pleasure, my friend. Talk soon.
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