Banks are bracing for many clients to default on loans or to try and sell distressed notes due to hardships experienced in 2020. The pandemic posed a number of challenges in both the commercial and residential sectors, and some people simply could not keep up with payments. While analysts outside of the commercial real estate market thought this trend signaled a downward turn, the reality is that distressed notes created more opportunities for property investors.

Property Flippers and Distressed Notes

There is a lot of activity in the residential property market right now. The demand for renovated single-family homes and condos is very high. Potential home buyers are looking to move out of apartments and urban areas into houses they can call their own and grow their families. At the same time, people are offloading their houses, either because they defaulted on loans, their job situations have motivated them to move or scale down, or because hardships resulted in them being unable to keep up with mortgage payments. Banks are looking to mitigate their losses, as well as eliminate a situation where they are holding onto properties that aren’t generating revenue. This opens up a number of opportunities for house flippers who want to acquire properties at a low price, put in the renovations home buyers are looking for, and then sell those homes for a profit. Distressed notes can become a very valuable source for fix and flip projects.

Commercial Properties and Distressed Notes

2020 disrupted a number of small businesses. Some establishments took their operations online and embraced e-commerce, while others simply could not adapt and shuttered. As with residential homes, banks were left holding onto many commercial mortgages as businesses filed for bankruptcy. Since banks still consider commercial real estate to be a high-risk area, they are motivated to find property investors who are willing to take properties off their hands. Since restrictions are being lifted and COVID-19 vaccinations are on the rise, the economy is poised for an upswing. This means property investors can lease or sell commercial properties to emerging and expanding businesses.

Financing Distressed Notes

At The Capital Rams, we offer a wide range of financing solutions to property investors nationwide. Contact our offices today to get started.