What Deals Should Real Estate Wholesalers Be Focusing On Now?
What are the best deals for real estate wholesalers to be working now?
As the market continues to change and revolve, where can wholesalers find the deals? Where can the good deals be found? What moves might you not want to make?
Foreclosures
Foreclosures have been growing again. While the actual number of foreclosures is relatively small on a national basis, there are pockets of higher activity.
ATTOM Data says foreclosure filings rose almost 130% over the past year. Still, with only 25,000 or so filings in a given month they can be snapped up quickly by a hungry market.
However, there are cities and zip codes where 1 in every 300 to 400 housing units is receiving a foreclosure notice. Those are 2008 level numbers.
These areas include Cleveland, OH, Kissimmee, FL, and West Palm Beach.
Distressed & Motivated Sellers
Banks still seem to be holding very few REOs. They are being auctioned off first, or sold fast.
Wholesalers may find better deals, and less competition if they market directly to distressed and motivated sellers.
This may include leads on homeowners who have large amounts of consumer debt. Those who have fallen behind on credit card and car loan payments, or small business loans.
HOA Properties
Rampant inflation is everywhere. Recently property owners have been complaining that their condo or home owner associations have raised their dues by 300% to 400%. That means many won’t be able to afford to keep their units.
If you are in and out fast, and can flip them to more affluent buyers these could be great deals.
Commercial Real Estate
It’s no secret that the residential market is heated and hyper competitive. Switching to commercial properties could lead to less competition, and bigger paychecks.
Consider which properties are most in demand by end buyers, which types are being liquidated, and which will do well in a new crisis.
This can include self-storage, multifamily, and office buildings.
The Deals You Have Pre-Orders For
The smartest and most profitable way to wholesale is not to speculate, but to simply fill orders for your end buyers. This way you don’t get stuck with properties, and you can use transactional funding to finance your entire purchase price.
Find volume buyers who will stick with you through the changes.
Moves Not To Make
With the way the market is evolving some wholesalers have considered fixing and flipping, buying and holding, or getting into Airbnb properties. This can be a huge mistake. It means moving down the food chain to more labor intensive and higher risk deals.
You do not want to be stuck with properties that have peaked.
If you looked at who survived previous crises best, it seems to be those that stuck to wholesaling.
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