January 20, 2021

What Does the Distressed Market Look Like Post-COVID?

I get this question asked all the time… What are we seeing in the market in terms of inventory, and how much more inventory are we going to see? I always want to remind people that prior to covid, there were already 4M to 4.5M loans that were 12 months or more delinquent already on their payments. This is pre-COVID, so now post COVID we’ve got another 5.5M to 6M loans that are delinquent, which is 9-12 months or more on payments, and yet have been put into foreclosure.

So, when you ask me what’s the inventory look like… to me, I think that the pipeline today is only going to be added to the 4M to 4.5M loans that were already there pre-COVID. We’re talking 10M+ loans that are already a year behind on their payments. I don’t see that product actually hitting the street for another three to four quarters. They’re going to try and work through that as we go into 2021 and get past this election.

I’m seeing this runway in terms of product and opportunity for YOU to get into this space to buy houses & buy hundreds of them at least for another 3-4 years strong. Why? Because how could they bleed through and liquidate 10M+ homes that are a year or more behind on their payments in the next year or so, can’t happen. It would actually constrain the market and actually really force values of houses to really dip… something I don’t see happening.

The opportunity is now… and we see the runway for this opportunity to be years from now.