Why Wholesaling Real Estate Remains The Best Strategy For 2021

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on Apr 01 in BestTransactionFunding

 

Wholesaling real estate remains the best investment strategy for investors this year. Check out how it is stacking up against other real estate plays that may not be as attractive anymore.


Many real estate investors are searching for and debating the best moves to make in this uncertain environment. While all traditional real estate investment strategies can still work, and are for some investors, more are looking to lower their exposure to risk, increase their upside, and stay ahead of the curve.


New Construction

While many builders and developers are still busy building, construction material prices are up significantly, and only appear that they will continue to rise in the near future. That in turn means the prices of new properties are up significantly. This is risky as a builder. Pre-construction investors investing in individual units have also found sellers changing terms and prices on them after a contract is signed, or are terminating contracts to sell for more to someone else, eliminating all of the returns they were counting on.


Rehabbing

Construction costs are also hitting rehabbers and fix and flip investors. This is on top of the volatility of not knowing how local markets will continue to perform and the direction they will trend in. Unless flippers are in and out in days instead of months this leaves them very exposed to changes which could derail their planned exits and profits.


Rentals

While some types of rentals are certainly performing, and should continue to do so, the events of the last year have shaken up rental property investors. They never expected they would see mass eviction bans at this scale. They are worried that if this was possible, anything could be possible in the future. It’s not the safe or secure play it was before 2020.


Tax Liens

Tax liens used to be a lesser known real estate strategy. Now between big funds using them to access inventory, and gurus turning masses of novices onto it, investors are reporting auctions are overcrowded, with no appetizing profits to be made.


Mortgage Notes

Much the same of the above applies to institutionally originated mortgage notes. There are exceptions for privately originated mortgages. Though investors are still scared the government could change the rules on them too.


Wholesaling Real Estate

Wholesaling offers high returns, the ability to get in and out before the market changes, and access to leverage. There are both motivated sellers and buyers. If you don’t buy in until you already have an exit it is really hard to lose with this strategy.

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