For the past couple of years we’ve been told that housing prices are so high, and bidding wars are so competitive because there is an incredible shortage of inventory. Yet, the data shows that there are actually millions of vacant properties across the US. Could these not only be the answer to retaining some affordable housing, but also fueling your deals as a real estate investor?

America Has 16M Empty Homes

According to a new report from Florida Trend in May 2022, the US has 16M vacant homes. Most of those are in Florida. Which has 1.7M, despite being one of the hottest states for buying activity.

This doesn’t count all of the vacant land and building lots out there which can also be used for housing. Nor, the enormous amount of no longer needed office buildings, and other commercial properties which are ripe for being converted to housing.

Affordable Housing

One of the big observations with all of these vacant houses, is that they far outnumber the amount of homeless in the country.

Official counts only put the number of homeless in the whole country at 500,000. Each could be given almost four houses each in Florida. Still, leaving over 14M empty homes across the nation.

More can be carved out either by government, private investors, or combinations of both in partnerships to retain a pool of truly affordable housing. That’s certainly better than spending over $500K a unit to develop new housing for the homeless as some governments are doing.

Of course, plenty more of this pool of properties can be sold wholesale to rehabbers and landlords to operate at market rates.

Finding The Deals

The discrepancy between the retail market and all of these vacant properties, is that they are not being publicly advertised for sale online. That doesn’t mean that they can’t be bought.

The key to unlocking all of this deal flow and profits is direct marketing to true off market sellers.

This can be done by mail, email, cold calling, and search engine marketing.

This is a great service to provide. You can help these owners liquidate all of these properties which are costing them money to hold every month, and turn them into cash.

On the flip side, you are providing much needed inventory to retail, rehabber, and landlord buyers. Like mining for diamonds or gold and bringing it to market.

 

Almost 65% of millennials now regret their home purchases according to a new Bankrate survey.

This may be a shame for all of those who got caught up in the home buying frenzy of the past year. Yet, it also signals some new opportunities for real estate investors as well.

Homebuyer Remorse Grips Millennials

According to the data the majority of millennials now regret buying homes.

Some of the top reasons they are giving for this distress include:

• Additional homeowner expenses like maintenance costs

• Buying a home that is too big or too small

• Home mortgage payments and rates too high

• Buying in a bad location

• Overpaying for their homes

It seems millions just jumped into the market on a whim, without really thinking the decision through, doing a budget, analyzing what was important in a home, or educating themselves about the market.

How Wholesalers Can Help Out

In many scenarios these homes have quickly become a burden for homeowners. It’s now just a big payment each month. One that prevents them from enjoying the life and freedom they really want. It’s stressful. For a lot of homeowners it may be unsustainable.

As a real estate investor you can help them out. Even if they bought at the peak of the market in the past year, soaring inflation and frenzied competition means those properties could easily have 20% more equity in them now. For some, that is enough money to make a decent profit on wholesaling them.

All many of these owners probably want is enough money out to go move into a nice rental.

Some won’t act in time, and unexpected maintenance, repair and property tax bills will bankrupt them. That can turn into nonperforming loan notes and REOs. Both of which can be buying opportunities for investors.

Wholesaling To Landlords

Equipped with this information and facing a changing market, investors may want to expand or change up who they are reselling properties to.

Many retail buyers are getting priced out of the market. It is true that interest rates are low. Yet, recent data shows that it will now take South Florida homebuyers 17 years just to save up a 10% down payment. That’s 34 years to save a 20% down payment. That could certainly lead to a decline in homeownership.

While many rehabbers have been sitting on the sidelines during the pandemic according to ATTOM Data, and will continue to due to hyperinflation of construction materials, other types of buyers are scaling up.

Buy to rent landlords are growing as fast as they can with cheap money, and in anticipation of a new wave of renters coming to the market. These end buyers may have lower profit expectations, and are likely to be bulk or repeat buyers too.

 

Wholesaling is a preferred real estate strategy for a variety of very obvious reasons. Yet, there also some very important benefits both new investors and veterans of other strategies will find make this play irresistible.

You are probably familiar with wholesaling being the low risk, no hammer needed, fast way to get paid in real estate, and enjoy large lump sum gains. Then there are the tax benefits and supersized returns.

However, the benefits don’t stop there. In fact, for wise entrepreneurs and experienced investors the following reasons may be even more vital and urgent drivers to choose wholesaling.

Scale

Wholesaling is not only an easy strategy to scale up, but also down. This can be incredibly important during rotating cycles. Done right, you don’t have to worry about laying people off, defaulting on office or storefront space, or carrying too much overhead.

You can also scale up and down on-demand, whenever you like. Do more when you want to boost your income, and scale down when you just feel like taking it easy.

Vacation Time

Landlords never get the luxury of vacations. Rehabbers certainly can’t afford to take time off in the middle of a project. They aren’t even getting nights and weekends off. As a wholesaler you can choose to hit pause any time you want. You can pause your offers, and take a long weekend staycation. Or pause for two weeks and go to Hawaii with the family. All without really putting much of a dent in your income.

No People, No Property Management

You can certainly hire a small army of remote staff to really scale your wholesaling business. Though you can also make some pretty good money doing it by yourself. You don’t have to be recruiting and managing a lot of people. You don’t have to deal with all of the headaches of property management or have to step in when they let you down.

Never Be Worried About The Market

Almost everybody is concerned about the market and where it is headed next. It is stressful, and 90% of the time leads to bad decisions. Wholesalers don’t have to worry about that. They are always in and out and paid before anything changes on them. When things are ugly out there, the deals get even better and more plentiful. When the market is on fire and accelerating fast it is easy.

Easy 100% Financing

Sure, there may be ways to get really creative with the paperwork and deal structuring and blending funding options to finance buy and hold rentals and fix and flips with no money down. Though it will always take a lot more work and energy, and is never guaranteed to close. In contrast wholesalers can finance 100% of their purchases with the easiest financing available. Even with no appraisals or credit checks.

 

So, are you wholesaling yet?

Your real estate business needs these six types of people to survive and thrive.

No matter whether you are a small house wholesaling operation, a construction firm, fund, rehabber, or landlord with hundreds of units, these are the separate individual roles you need to have filled if you are going to hit your goals and maintain your gains.

The Visionary Thinker

You need the big picture thinker. The one who sees the vision and casts it for everyone else inside and outside of the organization. They lay down the idea for the business, and spend their time on strategy and the highest level items. Eventually you may need these thinkers and strategists to lead all of your different departments too.

The Builder

This architect or or designer breaks down the visionary’s idea into the parts that are needed to make it happen. Like an acquisitions team, lead generation, vendors to facilitate due diligence, financing and closings, and more. They layout the organizational structure to bring the dream to life.

The Doer

Not everyone can be a thinker or dreamer, or nothing will ever actually get done. You need the workforce that is happy slugging away at the daily tasks required to move the needle and keep things working. They run customer service, admin, handle sales calls, scout for properties and more.

Social Butterfly

The above personalities aren’t always the most social. They are busy thinking, and grinding it out behind the scenes. Regardless of how technically excellent everything else is done, you still need someone who thrives on being social. This is a people business.

The Frugal Bookkeeper

It is essential to have a dedicated, unbiased bookkeeper who just focuses on the numbers. It is their job to make sure the business doesn’t run out of money. They have to be separate to other departments so that they aren’t tempted to say yes to things just to hit the metrics for other departments they are involved in. They keep everyone else in check when it comes to spending.

The Manager

Someone has to manage all of these people. This isn’t a good fitting role for the visionary. It needs to be someone who excels in managing others and the finer details of the operation. This person brings together the doers and thinkers to realize the company goals.

Summary

You simply can’t do all of these jobs yourself. If you try you are sabotaging your own potential and what your business could be achieving. Which roles do you still need to fill to fuel your real estate business?

 

40 million renter households in the US could be headed for eviction in the next 40 days. While epically tragic, it also brings great opportunity.

According to the latest data from the Aspen Institute this many tenants could be in the street by the end of September 2020. According to the Census Bureau, 34% of American renters didn’t have any confidence they could make rent in August.

Tip of the Iceberg

The truth is that there is probably a lot more distress coming. We are currently at a stage when most of the help seems to be over or at least frozen. Yet, especially renters have now burned through all of their savings and credit card balances waiting the virus out. Even those still employed are mostly probably seeing lower incomes, while expenses are up between hand sanitizer, masks, toilet paper and stocking up on groceries at inflated prices.

Unless there is a major historic change in these dynamics quickly, then it seems a tsunami of evictions is inevitable. It could end up being a whole lot more than 40M. Just think about the impact of 1 out of every 2 or 3 American households facing eviction.

Where’s The Help?

There have been promises of help and a new executive order from the president. In reality that help isn’t being spread out equally and many aren’t getting it. Many landlords and lenders aren’t willing to help, or they are no longer financially able to.

There have been new promises of eviction and foreclosure moratoriums. Not all are obligated to them. There is a lot of confusion between federal, state and municipal levels.

To compound the problem with evictions is where they will go. Affordable housing was already at crisis point before this. Many landlords won’t see the sense in re-leasing to someone else right now. For most it may just make the most sense to cash out.

Much the same is true for homeowners and foreclosures. There will likely be a sizable wave of distress sales in play.

The Flip Side

The flip side is that demand for purchasing properties is massive and urgent. End home prices are up, interest rates are low. Millions are moving for a variety of reasons.

Then there are also rehabbers and institutional landlords to sell to.

While it is tragic for many households. It is a huge opportunity to help many others. It is the perfect opportunity to help and boost your income too. That’s true whether replacing other income from a lost job, or scaling an existing real estate business. No one is ready to buy that many deals, and there are plenty to go around if investors move quickly.

Check out our VOD service to make more offers and land more deals fast.

 

Are you about to make one of these deadly marketing mistakes?

This is looking like a fantastic year for real estate wholesalers. There are millions of motivated sellers. There is plenty of money for deals. Landlords and rehabbers are still looking for inventory. However, to connect all the dots requires marketing. As a new company just a year or two old you might be spending just $10,000 a month on this. If you’re moving fast you might have over a billion dollars to grow your business through marketing this year. No matter what your budget, the key is getting the most out of it. Fail to do that for a couple of months and you could be facing bankruptcy.

Here are the five top mistakes not to fall into now…

1. Copying Tactics That Don’t Work

The number one mistake real estate investors are making is copying tactics they see others using, but don’t really work. Or at least don’t work well. Just because someone looks successful, doesn’t mean their marketing is really working. At least it may not be working on anyone but you. They might have just put their last dollar in marketing to you, and are a week away from going broke.

If you don’t know the returns they are getting you really don’t know. This can apply to investment strategy, websites, videos, ads, the length of your content and podcasting.

Test and watch your data before you go all in.

2. Cheap & Flawed SEO

Trying to get noticed by the search engines and to rank high on Google can have great advantages. Yet, most get it horribly wrong and waste lots of money on these efforts. Most actually do more harm than good to their rankings and visibility.

The most common reasons for failure here, include:

• Hiring cheap SEO companies

• Keyword research by people who don’t really understand the real estate industry

• Copying outdated online suggestions over putting yourself in your customers’ shoes

• Ignoring common sense when picking keywords

• Not reviewing and updating keyword research and SEO on a monthly or quarterly basis

3. Taking Bigger Competitors Head On

You wouldn’t try to take a semi head on if you were driving a Prius on the road, right? Yet, many investors do this every day with their marketing. You can’t directly take on competitors who are spending $30,000 on blog content a month, or who are happy to throw away 4 billion dollars on online ads this year just to drive you out of business. Not if you are only investing $10k a month in your own marketing. You have to be creative and find a competitive edge and unique way to stand out.

4. Not Providing The Communication Options Your Ideal Customers Want

You might really want to get motivated sellers on the phone for a live pitch call. For all the same reasons they really don’t want to do it. You can spend $1M on ads to drive traffic to your website. Yet, if your only option is to call or use Facebook Messenger, you might only convert 1 in 1,000 hot leads. The rest are onto your competitors’ websites looking for other options. Like emailing, texting for help and live chat features. Remember, it’s not about you. It’s about them. Recognize that the last thing distressed sellers want is yet another person on the phone reminding them of how desperate their situation is and pressuring them.

5. Not Getting A Marketing Coach

Even if you don’t have other types of coaches and advisers yet, you already know that the best in every field has one. Given that 90% of your business relies on marketing, this is the most important part of your business to get help in. You don’t have to spend $40,000 on a cheesy coaching program full of fluff, but it pays to have an expert adviser to help you leap pitfalls and get right to winning in this area.

 

 

It looks like a new real estate correction is already in the works. It’s just the news many experienced investors have been waiting for. Now it’s time to get busy putting money into action and wholesaling those properties.

The New Housing Correction

The data is clearly showing a correction. It may not have arrived in your market yet. Though it is probably coming in the next couple of years. Your market may experience a spring in new growth and capital as investors ditch markets that have already peaked. Or yours could have already passed the peak and see some sellers letting properties go with steep price cuts.

Why It’s a Good Thing

Many investors have been waiting years for this moment. It may not feel good in the medium term for those that get caught slacking on protecting their recent windfall in equity. Though it can be cashed out or leveraged now, and it will bounce back.

Even more important than the return of better pricing and more negotiability for buyers is the certainty this data brings. As Fuquan Bilal of NNG Capital Fund puts it, now investors know where they are in the real estate cycle. They have a clearer vision of what is ahead. They can make moves with confidence.

It is very difficult for even the most experienced pros to perfectly time the market. You don’t have to. If you negotiate deep enough discounts you can still flip for a handsome profit with a decent discount left for your end buyer.

We may not be near the bottom yet, but historical data on your local markets will give you a great idea where that will be. For some this is now the ideal time to sell and cash out. For rehabbers, home buyers, and landlords this can be a better time to buy due to access to capital and rates. The wholesaler in the middle can profit while helping both parties.

 

Looking for more real estate wholesaling leads?

There are many ways to find wholesale house leads today. There is one which is frequently overlooked and can provide some of the easiest to close and most profitable deals.

Leads for Real Estate Wholesalers

With the booming housing market investors are enjoying right now even the MLS can produce house deals to wholesale and flip quickly. Then there are bulk REO and note buyers that frequently have volumes of properties they hope to shed, as well as new software and list sources which help pinpointing off market prospects. Plus, it’s never been as easy or affordable to run inbound online marketing campaigns.

No wholesaler should be coming up short on deals right now.

Tap into Rehabbers

While there are plenty of sources of potential deals and lots of properties being floated and passed around as deals today, wholesalers still need to make sure they are contracting on house deals that really offer good spreads and are getting a good overall ROI, including their marketing.

This makes today’s house flippers and rehabbers one of the best and most overlooked sources of quality leads.

Fix and flippers are putting a lot into marketing directly to owners for deals. They are mailing, cold calling, emailing and running ads and signs. Most only end up being able to do a fraction of the leads that come in. Most rehabbers have tight criteria for the homes they will work on, and have limited capital and time to work on fixer uppers. That means they are typically left with dozens (if not more) motivated seller leads each month. Most just let them collect dust, because they don’t know what to do with them.

As a wholesaler this is your chance to step up and create more win-win-win scenarios. You can help the sellers actually sell their home, the rehabbers to monetize those leads and do more marketing and your buyers list to get more deals. Plus, you win too.

How to

There are a number of ways to tap into this lead source, including:

• Responding to their mail pieces

• Networking at REIAs

• Pick up the phone and call

• Get on their email lists

There are many ways to take down these deals too:

• Visit job sites and make offers on rehab houses before the work is complete

• Arrange to buy excess leads in bulk

• Co-wholesale them together and split the profits

• Take assignments and close with your transactional funding

• Take live referrals on deals they can’t handle

If you aren’t coming up with all the deals and dollars you hoped to from wholesaling try tapping into this lead source.

 

Who can you be flipping your wholesale homes to now?

If you want to wholesale more properties, wholesale faster, and make more profit, it helps to know who the most active buyers are in the market. There is more than one type of buyer for wholesale houses. Bulk up your list with them.

Rehabbers

Rehabbers and fix and flip investors are still one of the top buyers of wholesale homes. They need this inventory to fuel their businesses and incomes. Having a consistent source of wholesale deals allows them to stay focused on what they do best (fixing). This is becoming even more important as house flippers look for new areas to work in, with more opportunities.

Rental Property Investors

Rental property investors also need to keep their pipelines full of new acquisitions. They are needing to dig deeper and deeper to find house deals where numbers work. Some may want to make renovations and improvements, others won’t.

Other Wholesalers

While it’s important not to get tied up in long chains, other wholesalers with bigger buyer lists, and who can handle more volume may be some of your best contacts. These may be other pure wholesalers, investors looking to owner finance and create new mortgage loan notes from these properties, and even funds.

Retail Home Buyers

Regular home buyers are increasingly looking for wholesale house deals too. Too many other properties are being overpriced, and inexperienced and unrealistic agents and sellers are overpricing and have little in the way of negotiation skills. Today’s buyers want to feel as if they are getting a good deal. Some may take more work than other wholesalers, but they may pay more too.

Non-Profits

Nonprofits and not for profits are also looking for affordable housing supply to supply their users with, or to house workers and those they help. They may even buy your deal in bulk.

Home Builders

Small builders are often finding it more profitable to acquire existing properties and fully renovating them instead of building from the ground up. It can be greener too. Even larger builders often need to piece together larger parcels to put new communities and projects on. It’s much easier for them to work with wholesalers than regular homeowners.

There is a horde of opportunities out there for real estate investors this Halloween.

Zombie homes, vacant homes, and distressed properties are running rampant out there. There are still thousands of them. At the same time there is a huge appetite for investment properties and housing. Some cities still have tens of thousands of vacant homes, while investors battle over sparse inventory and the rental market and affordable housing inventory remains incredibly tight.

This means huge opportunities for fast moving real estate investors who get out there, take down some of these zombies, and recycle them.

The thing is that many distressed homes aren’t being publicly marketed. They aren’t on the MLS and they don’t have signs in the yard. Many end buyers either don’t have the know-how to find the owners and make viable offers, or they just lack the time and hustle.

Those investors that are motivated and put in the effort to take action and learn the tactics for finding and contracting to buy these properties have a lot to gain. According to RealtyTrac home flipping profits are up to new highs, and more investors are looking for rehab deals. With homeownership at an incredible low, and more millennials maturing to prime home buying age there is a strong and profitable resale market. Plus, recycling these properties can do a lot of good for young professionals and families and their communities. Real estate wholesalers in particular will find the timing right to do big numbers, and have a big impact.

Thanks to Best Transaction Funding you don’t have to be limited in deal volume based on how much liquid cash you have available right now. Using this transactional funding investors can find, fund, and flip ugly and even scary zombie homes to rehabbers, turnkey providers, and retail buyers fast, while interest rates are low.

These next few weeks are the perfect time to ramp up your business too. With Halloween comes plenty of seasonal real estate marketing opportunities from online content marketing to property tours. Make it fun.

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

One of the top bankers in the US has said not to put new money into the stock market. So what do we do now?

While the world’s financial markets continue experience the rollercoaster ride kicked off by the Brexit, former CEO of Wells Fargo Richard Kovacevich told FOX Business he didn’t think people should be adding new money to the market right now. So if such a high profile and experienced analyst is taking this stance, what should the rest of us be doing with our money and investments?

At the same time bonds have fallen to terrible and even negative yields, gold prices have been pumped up by fear, and tech stocks have been looking frothy for quite a while. How do we keep making money with 3 or 4 of the major market options overvalued, ripe for a correction, and potentially delivering negative returns?

Wells Fargo’s former CEO says he’s piling up cash on the sidelines while waiting for a dip in prices. That’s not a bad strategy if your only alternative is to invest in depreciating assets with negative yields. Fortunately, there is also real estate to consider as an investment, and many are. Even if fluctuations happen in property prices in the future house flippers can still make money by getting in and out at the right prices, or locking into rental income which can provide steady yields regardless of the rest of the market.

So what to do? Keeping cash for value opportunities may be wise. Of course inactive cash also devalues by itself. House flippers and rehabbers can beat this by putting money in to value add deals and getting out again quickly. Real estate wholesalers can feed both rental property investors and rehabbers by using 100% financing from Best Transaction Funding, and get in, out, and paid with low risk, and massive ROI. Any cash that does need to be put to work can then be spent on marketing and growing the business to increase volume and revenues.

How will you invest?

 

Authored by Best Transaction Funding - the leading source of transactional funding for real estate wholesalers in the US.