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How Real Estate Investors Navigate a Spooky Market


With Halloween around the corner, some investors are reflecting upon one of the kookiest and spookiest real estate seasons ever. These two years have presented many challenges for residential real estate investors, from depleting inventory to increased bidding wars. Depending on their investment strategy, investors have faced unique challenges. Let’s explore some of these challenges below.

Challenges for Turnkey, Buy and Hold Investors:

Real Estate investors faced bidding wars with potential primary homeowners and other investors. Low inventory presented a unique set of challenges for this investment strategy. This is on the heels of an unprecedented spike in demand for single family property and cash savings. Inventory is low and there is major competition from primary homebuyers seeking single family homes. The “cash is king” method that most investors with this strategy deploy, is coming face to face with homebuyers who also have cash and are ready to spend above asking price, to secure a home for their family.

Challenges for Build for Rent Investors:

The rise in material cost, construction cost and labor shortage, along with permit delays in some municipalities has made new home development a game of Start, Pause, Begin Again… Repeat. The ultra high demand for rentals has also intrigued residential real estate investors and steered them to building entire communities of single-family rentals or demolishing existing structures to build new state of the art, single family homes.

Challenges for Fix and Flip Investors:

If you are a fix and flipper, even a haunted house may be on your radar. Opportunities to buy and rehab a property to its original glory, is what fix and flippers are looking to capitalize on. Recently, fix and flippers have experienced the benefit of lower market turn times due to lower inventory. The challenge has been finding deals that will meet profit margins and the aforementioned costs in material, construction and labor to complete the property remodeling in a timely manner.

Given these challenges, how are investors finding success?

Marketing

Many investors have put on their creative hats when it comes to sourcing opportunities. Investors are investing more money in marketing to generate distressed seller leads. In the race to scope out a potential deal first, it’s important for investors to know of an opportunity before it’s listed publicly and made visible to other real estate investors.

Wholesalers

Sourcing deals through relationships with wholesalers who are constantly on the prowl for opportunistic deals can bear delicious fruit. This is, of course, in the form of below market prices and cashflow with profit for all.

REIA (Real Estate Investors Associations)

Actively participating in local REIA has proved lucrative and flush with opportunities for some investors. They connect with fellow investors to uncover hidden opportunities.

Bigger Pockets

Like REIA, connecting with a broad community of real estate investors is a great way to source new deals and engage in potential joint venture opportunities. This vast online community also provides connections to potential contractors, lending and a complete support team for residential real estate.

Roofstock

Roofstock is a marketplace for new and seasoned investors to purchase and sell residential investment properties on a national scale. Using this platform and its tools, investors have access to cutting edge technology and innovation.

SVN’s SFRhub

According to SFRhub, they introduced the “first-to market digital commercial real estate fully transactional platform. With over $1 billion of active SFR/BFR portfolio listings, they are dedicated to single-family residential and build for rent investment portfolios.

Hubzu

Described as “real estate auctions made easy”, Hubzu presents its platform as a better way to buy and sell homes. With thousands of available single-family homes, from online foreclosures to bank-owned REOs, Hubzu is a place investors can potentially find unique properties at fair prices.

Auction.com

Per Auction.com, they are the nation’s largest online auction marketplace. They help real estate investors reach their goals by offering the largest selection of REOs and foreclosure homes. With $52 billion in sales over the last decade, spanning all 50 states, this resource strives to provide investors with technology and data science.

As investors reflect upon and navigate this Spooky season, they keep in mind that while harder to find, the deals are out there. The resources above are just some of the ways investors that I speak to on a daily basis are finding deals and eventually closing their loan with us. It’s all part of the process, and I can help. For your next investment financing opportunity, give me a call. Michelle Suiter at 949.541.8972 or email michelle.suiter@cvest.com and GROW with CoreVest.

Sources: https://www.roofstock.com/about-us; https://www.sfrhub.com/about-us; https://www.hubzu.com/about/about-us; https://www.auction.com/lp/about-us/

 

 

 

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