Wholesaling Houses: Where Are The End Buyers Now?
The market has changed. Where are the end buyers for your house flips and wholesale deals now?
The real estate investors who come out of 2020 on top are those who are the most flexible and quick to adjust to the changing times.
You may need to be more careful about the deals you buy, to ensure there is an end market demand for it, with able buyers. Know the buyers, and you’ll know your exit strategy before you get in, and the types of deals to be taking on now.
Wealthy Home Buyers & Buy And Hold Investors
Just a couple of weeks into the COVID-19 mess and Chase bank slashed availability of mortgages. Now requiring at least 20% down and a 700 plus credit score. That is going to eliminate a large portion of the population as potential buyers.
In contrast, many wealthy individuals and families are pulling their money out of the stock market, retirement plans and the banks to put their money into real estate. Some are buying half a dozen units or more to protect their wealth.
They have all cash, or can put down 50% and still get a mortgage relatively easily.
Movers Escaping The City
We are being told that even if quarantine restrictions are temporarily eased that we face another coronavirus outbreak in the winter, and it could be worse. Some are warning this could be a multi-year pandemic.
Who wants to be stuck in a condo in the city, with fast rising crime during times like these?
Expect more buyers cashing out their urban homes and moving to smaller towns and rural areas. Especially now that the office has gone the way of the dinosaur and remote work is here to stay.
Those in this group who act quickly can still walk away from their properties with cash to buy something else.
Real Estate Syndicators & Funds
Real estate syndicators and fund managers are also having to pivot and diversify in order to deploy capital and deliver on promises to their own capital investors.
You can serve them wholesale deals. Even better if you can pull together portfolios to provide the bulk buys they need to make efficient transactions.
Property Owners With High Amounts Of Equity
With the exception of transactional funding for real estate wholesalers, it is getting much harder to find loans to purchase real estate out there.
One exception to this may be homeowners and rental property investors who can refinance or offer high equity properties as collateral and gain bridge loans to make new acquisitions.
COVID-19 Heirs
Even before this virus we were in the middle of one of the biggest wealth transfer periods of our history. It’s a tragic situation. Yet, many of those who have passed on in this crisis may be glad to see their heirs now able to use their inheritance to go buy homes in safer areas, or use their legacy to go invest and create new streams of income and businesses in real estate which will keep providing for future generations of the family.
