40 million renter households in the US could be headed for eviction in the next 40 days. While epically tragic, it also brings great opportunity.
According to the latest data from the Aspen Institute this many tenants could be in the street by the end of September 2020. According to the Census Bureau, 34% of American renters didn’t have any confidence they could make rent in August.
Tip of the Iceberg
The truth is that there is probably a lot more distress coming. We are currently at a stage when most of the help seems to be over or at least frozen. Yet, especially renters have now burned through all of their savings and credit card balances waiting the virus out. Even those still employed are mostly probably seeing lower incomes, while expenses are up between hand sanitizer, masks, toilet paper and stocking up on groceries at inflated prices.
Unless there is a major historic change in these dynamics quickly, then it seems a tsunami of evictions is inevitable. It could end up being a whole lot more than 40M. Just think about the impact of 1 out of every 2 or 3 American households facing eviction.
Where’s The Help?
There have been promises of help and a new executive order from the president. In reality that help isn’t being spread out equally and many aren’t getting it. Many landlords and lenders aren’t willing to help, or they are no longer financially able to.
There have been new promises of eviction and foreclosure moratoriums. Not all are obligated to them. There is a lot of confusion between federal, state and municipal levels.
To compound the problem with evictions is where they will go. Affordable housing was already at crisis point before this. Many landlords won’t see the sense in re-leasing to someone else right now. For most it may just make the most sense to cash out.
Much the same is true for homeowners and foreclosures. There will likely be a sizable wave of distress sales in play.
The Flip Sharkz Side
The flip side is that demand for purchasing properties is massive and urgent. End home prices are up, interest rates are low. Millions are moving for a variety of reasons.
Then there are also rehabbers and institutional landlords to sell to. Possessing the knowledge and experience to handle these potentially complex transactions is altogether different.
While it is tragic for many households. It is a huge opportunity to help many others. It is the perfect opportunity to help and boost your income too. That’s true whether replacing other income from a lost job, or scaling an existing real estate business. No one is ready to buy that many deals, and there are plenty to go around if investors move quickly.
What’s your plan?