Why the Savviest Investors Keep Buying in Hot Markets

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on Apr 08 in BestTransactionFunding

Why do the most sophisticated real estate investors continue to buy pricey properties in the hottest property markets?

While some newer investors are wondering if the market and competition is getting too hot, funds, fund managers, and notable individual investors appear to be on an all-out buying spree. They may be selling and restructuring portfolios too, but they are buying big.

In the last few months, just in NYC multiple price records have been set for condos, apartments, and development sites. In March 2016 Property Shark reports multiple transactions flipping for tens and hundreds of millions more than they were bought for in the last four years. This includes firms like Howard Hughes, and individual fund managers, while celebrities, and sons of celebrity real estate moguls are buying prime Manhattan homes and Brooklyn properties for redevelopment.

We all know the market is constantly fluctuating. So why don’t these pros care? What do they know that newer investors don’t? What’s the key to doing more deals in hot markets, with confidence?

They know that prices always come back up. There may be dips, but look at any historical graph of property values and rents, and they have consistently marched higher. The dips are used to shake the newbies out of the market, and for pros to grab good deals before selling them back at a premium later.

The experts also know that before real estate dips, other investments will crumble first, and that only boosts the demand for real estate, and its cash flow, yields, and asset protection.

The keys to profitably and safely investing in times like this can include:

Having end buyers lined up

The ability and funding to redevelop or remarket the property

Cash flowing assets that will pay for themselves till resold

Finding the Funding

Leverage is vital in these conditions. More and more big buyers are partnering up to take down bigger deals and spread risk. Many are finding capital from banks like Santander and Ocean for developing projects. All that others need is access to a great hard money lender or transactional funding. And you don’t need great credit, or mountains of assets to access these sources of capital.

 

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

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