How Will Forced Diversity Impact Wholesaling Properties?
How will HUD’s new federal tracking and ‘Affirmative Housing’ plan affect wholesaling properties for real estate investors?
Is this social engineering initiative threatening to bring down homes values in some neighborhoods and will it allow the feds to invade property owners’ privacy even further, or does it open up fantastic new real estate investing opportunities for those wholesaling properties?
Fox News coverage of the new Housing and Urban Development department’s new “Affirmatively Furthering Fair Housing” policy and ruling which enables the feds to track diversity across American neighborhoods suggests the outcome will be forced social engineering which enables the government to determine who lives where.
A representative of the American Enterprise Institute points out that past efforts like these resulted in the subprime crisis via FHA style low down payment loans and slack underwriting standards. A New York attorney has also stood up to layout the concern that this type of policy can affect zoning laws and force more residential construction in areas where municipalities would prefer to grow commercial zones. In other countries this type of philosophy has played out in property and estates being seized from private parties and given to lower income individuals.
Of course many also see all of these potential side effects as positive moves that will increase equality. Though most importantly for those wholesaling properties it does mean more opportunities for those with a little creative thinking.
Even if the policy is taken to the extreme it means the availability of more detailed data for investors, as well as backing by the government for acquiring and developing more properties, while increasing the appeal and benefits of wholesaling homes as a strategy over buy and hold.
Obligations to approve more zoning changes to residential or mixed use versus strictly commercial can also help forward thinking investors to make sizable profits from acquiring the right parcels and boosting their value with re-zoning.
With fed backing wholesalers could also find much easier entry to investing in some more upscale areas, and get better deals on properties, with the potential for tax breaks for helping local governments and communities comply with their obligations.
Investors can throw their weight behind whichever policy they support and back up their preferred lobbyists, but there is probably little most individuals can do alone to change the direction of this machine. So perhaps the best move is just to look for the opportunities it creates and capitalize on them.
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