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5 Factors To Watch When Buying Wholesale Properties

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on Monday, 29 January 2018
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Looking for and finding low priced wholesale properties is one thing. Ensuring you have a viable deal, that comes with plenty of appeal for end buyers, and which they can actually buy may require a little more attention.

Make sure you are watching these factors…

Deed Types

There are several types of deed used to transfer real estate. Wholesalers need to know what type of deed they can get and provide. Savvy end buyers will, and should be wary of only being offered quit claim deeds. These really offer no protection or security. End buyers want to be confident in their investment, ability to get title insurance and resell in the future.

Unpermitted Property Changes

Many low priced distressed properties (and even some very expensive ones) are so much cheaper because they have illegal changes. That can be additions, garage conversions, subdividing units, and so on. Those can lumber new buyers with big fines, prevent them from re-selling or refinancing, and from obtaining a mortgage loan to buy your property. They can still be deals, just know the challenges. Make sure your buyers do to.

Realistic & Appealing Spreads

Offering a property with a $68,000 ARV for $48,000 doesn’t really leave much of a spread for the next investor. Not when you factor in 2 sides of closing costs and repairs. It may be a nice discount for a retail buyer, if they have the cash and want to spend it in that neighborhood, but make sure you know your buyers and what they want.

Changing Mortgage Rules

It is important to anticipate changing mortgage lending rules and programs. If they tighten, they could cut plans and deals short. Fortunately, we are are expected to be in a period of loosening mortgage criteria. Most analysts don’t expect Dodd-Frank to disappear yet, but it could be stripped down.

Who Pays the Costs

One of the quirks in the market since 2008 is more distressed property sellers trying to get buyers to pay the burden of past due property taxes, liens, and fines. Sometimes even there closing costs. Those costs can often exceed the purchase price too. Know who pays what.

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Wholesaling Real Estate: Get Ready For The Back To School Sale

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on Thursday, 13 August 2015
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Are you ready for some serious discounts on wholesale properties?

Forget the pennies to be saved on tax free days and at back to school sales. You’ll be able to buy the whole class some new threads and books with the profit on a couple of fast wholesale deals.

The sizzling summer mover season is done. There are fewer regular retail buyers in the market. That means less competition for house deals. While lagging data will take a few months to catch up, home prices normally soften during this period. Sellers get nervous because they aren’t used to dealing with seasonal fluctuations. All they get is that no one is showing up for showings. No one is making offers. And if they have one; their Realtors are getting hungry for commissions. This all makes for an excellent time to swoop in and score great discounts on house deals, and to negotiate the terms you want from a power position. It’s even a good time to go back to stubborn sellers and agents and get them to come down to your price. Which of course should be even lower now.

At the same wholesalers should find that buy and hold investors are back from vacation, and are getting serious about business again. This may be a short window to get them, before holiday madness starts, but this puts the icing on the ideal conditions for wholesaling.

So dust off your buyers list, load up on inventory, and flip it!

With a good transactional lender there is no reason wholesalers can’t enjoy a flurry of deals right now. And if you’ve still got time get involved with local backpack drives, and help others in the community that aren’t banking as well as you yet.

Want more tax free days? How about 365 days of tax free real estate investing? Check out next week’s post on how to slash your 2015 taxes by $10,000, and enjoy tax free returns all next year…

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

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US Foreclosures Surge As 10M Homes Still Underwater

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on Thursday, 07 August 2014
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New data highlights massive pool of wholesale properties available for investing…

While the US housing market has rebounded quickly, many real estate investors continue to seriously underestimate the amount of house deals available to them for flipping for quick, and sizable profits.

New real estate statistics firmly buck the media spin suggesting it is hard to find value and foreclosure properties in the US in the second half of 2014.

While thousands of American homeowners have been lifted above water thanks to rapidly rising home values and equity, millions more remain in distressed situations. 9,100,000 remain underwater according to the latest numbers.

Per figures from RealtyTrac over a third of Nevada homeowners still owe at least 25% more on their homes than they are valued at (even values are going up daily). This is only topped by one central Florida city.

Unsurprisingly Nevada remains one of the top 5 states for foreclosures in the US. The other top 4 states for foreclosure activity include; FL, MD, NJ, and IL.

RealtyTrac’s VP says the time it is taking lenders to foreclosure in Nevada has actually risen as of June 2014. It now takes 494 days to foreclose on average, versus just 420 days in 2013. That means many more foreclosure homes coming down the pipe.

In fact, the Las Vegas Review Journal reports NV foreclosure starts rose 56% year over year, and 66% month over month to June 2014. This puts 1 in every 138 homes in NV in the default process. Twice as many Florida homeowners in currently in foreclosure.

Still, home builders don’t appear to be fazed and are still rolling out new projects. The market is heading up, and great times for real estate investors are ahead. However, there are still millions of great opportunities now, for taking advantage of spreads, and rapidly rising home prices. It is just a matter of honing in on the best locations.

Armed with fast cash from Best Transaction Funding real estate wholesalers should find no limits on deal volume, expect what they can personally handle.

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Tips For Tapping Bulk Buyers For Flipping More Homes

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on Wednesday, 18 June 2014
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How can real estate wholesalers tap in to more buyers and well capitalized bulk buyers for more volume now?

New data has shown endless tracks of discounted homes and foreclosure properties still available. Armed with the Best Transaction Funding the only thing in between reeling in bigger profits and where wholesalers are now, is tapping into more highly qualified buyers.

So how can you find them?

1. Source Cash Buyers from Recent Purchases

One of the most common ways of finding cash buyers to wholesale properties to, is by sourcing those which have recently purchased area homes for cash. This is often followed up with a direct mail campaign.

2. Buy to Rent Lenders

Numerous ‘Buy to Rent’ lenders have popped up in 2014. They are well capitalized and eager to put their money to work, funding buy and hold investors in making new acquisitions of single family rental homes. Many of these lenders may be only happy to make introductions in order to create new lending opportunities for themselves.

3. Title Companies

As with lenders, title companies will often share their records and lists of buyers with real estate investors in order to drum up more business. Work on developing relationships with these reps.

4. Local Meet Ups

More and more private money lenders are reportedly attending local real estate investor meet ups. As a wholesaler these in person networking events can be gold mines for finding buyers and putting together deals on the spot.

5. International Property Shows

International property shows are frequented by deep pocketed real estate investors with billions of dollars up for grabs. Top international shows can provide a great combination of vacation getaway, competitive research and direct networking with serious cash buyers.

6. iBeacons

Apple iBeacon technology is specifically being rolled out for the real estate industry, enabling brands to push alerts to passing mobile devices, alerting users of deals.

7. Mobile Push Notifications

A vast number of retailers now use mobile push notifications to alert consumers to new deals and sales. Why not use the same strategy for marketing hot wholesale property deals?

8. Blog, Blog, Blog

 

Too few real estate investment firms are taking their blogging seriously. This is an essential pillar of inbound marketing, and is a must, especially for those not embracing the most edgy technology.

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How Successful Real Estate Wholesalers See Vendors Differently

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on Thursday, 15 May 2014
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The most successful real estate wholesalers see vendors, service providers and business partners distinctly differently than others. In fact, it is one factor which can often create dramatic in results.

This is a characteristic which is also seen among the wealthiest and most sophisticated buyers and investors, as well as leading CEOs. Put simply, it is the value put on quality services and business relationships.

This is not just about recognizing the importance of larger, long term gains and success trumping unsustainable short term gains. When considering the potential liability of being too cheap and churning through low quality vendors and reliability become almost priceless.

One of the most common ways in which this is seen in the industry today is when it comes to sourcing help and wholesale properties. One of the most ironic ways this rears its head is when some refuse to cough up for valuable third party services. This applies to the MLS, outsourcing platforms, online platforms for sourcing help, and other brokers. The argument by some is why should they pay for a third party middle men. Perhaps they are forgetting that they themselves as wholesalers are technically third party middle men. All too often they are happy to use the services, they just don’t want to pay for them. The fact they are used at any level shows the value they have.

Cost is the second part of this. It is wise to look for good deals and cost effectiveness. Unfortunately, the short sighted often believe that means cheapest.

One of the greatest examples of this in the real estate investment arena is house prices. Some of the cheapest homes of the moment can be found at Detroit’s foreclosure auctions. Some of the homes might sell for $1,000. After the fact they can cost many tens of thousands to repair or even tear down, and some will likely never see the rents or values other properties will. A most expensive property might actually end up delivering far higher returns and require less cash money out of pocket.

The same applies to wholesaling businesses hiring copywriters or designers. Cheap can often mean sabotaging future goals, losing advantages in speed to market, and more expense needed for constant do-overs.

When it comes to choosing real estate attorneys the savviest wholesalers, investors and business owners get that a low cost attorney or ‘pre-paid’ legal service can often ultimately cost more due to increased billing hours and substandard results. What they achieve in a week might be accomplished in 30 minutes by a real estate attorney with a higher hourly rate.

Could you imagine Warren Buffett and Berkshire Hathaway achieving such results and reputation over such a long period of time if they only hired the cheapest staff and acquired the most depressed businesses?

We are entering a new boom in the U.S. housing market. Using BestTransactionFunding wholesalers can look forward to turning substantial volumes of properties for years, for high profit margins. However, all the money in the world might not keep those which don’t prioritize wise counsel, solid business relationships and quality team members in the game.
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House Flipping Profits Soar 30% In 2014

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on Thursday, 08 May 2014
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Market conditions and profits improve by double digits for real estate investors in 2014…

New data shows all the stars aligning for property wholesalers. According to data from foreclosure monitor RealtyTrac:

• Average gross profit per home flipped topped $60k in Q4 2013
• For Q1 2014 unadjusted ROI on flipped houses averaged 30%
• The average time to rehab and flip houses dropped almost 20% to 84 days

So profit margins, and annual returns are improving nicely for U.S. real estate investors. However, so are conditions for flipping and wholesaling even more homes in the second half of 2014.

Quarter over quarter a new 2014 U.S. Home Flipping Report shows the percentage of American homes sales which were flips dropped to just 3.7%. Some might find this surprising. However, savvy wholesalers likely recognize this as great news. It certainly somewhat reflects the recent dips in available housing inventory and decline in publicly available foreclosures and short sales.

However, it also suggests more competition, and specifically heavy weight institutions with bigger pockets are moving out of the way for smaller investors. Plus, as an experienced, veteran wholesaler knows, a hot and healthy market can be even better for flipping and profits thanks to rapid home price increases and end buyer demand. This is backed up even further on news that all cash home purchases hit a new high in Q1 2014 at 42.7% of all residential property transactions.

There are still a multitude of potential wholesale properties out there, with more coming online daily. In Detroit alone hundreds of new foreclosure homes are going to the auction block for as little as $1k a pop.

For those seeking more liquidity to ramp up volume and flip houses faster check out what BestTransactionFunding.com can do for you today...
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Hottest Markets For Flipping Houses Right Now?

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on Tuesday, 01 November 2011
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So where are the hottest real estate markets for investors flipping houses today?

Some of the hardest hit markets like Phoenix, AZ and Las Vegas, NV are starting to attract a lot of attention, especially from Canadian buyers. With many home prices in Las Vegas down 60% and similar discounts available in Arizona it is hard for many to resist the urge to buy. With bargains this great there is definitely plenty of room to flip wholesale properties or turn them into turn key rental properties with tenants and management provided for those looking for hands free, cash flowing investments.

Recent statistics released by the California Association of Realtors show that available REOs appear to be drying up, suggesting that higher prices should be on their way soon. Though with such a large state you have to really take a close look at data on a local, zip code level before jumping in.

However, real estate investors who are looking for a faster turn around and bigger spreads may be more interested in areas which are already seeing the biggest rebounds. Parts of the country like southwest Florida, especially around Ft. Myers have continued to lead in terms of home price increases, yet offer amazingly affordable deals. With such low prices and great spreads on rental income the potential buyer pool is massive and flipping to other investors is easy too.

However, it is Miami that is really standing out for rapid growth with both transaction volume and property values rising. Inventory has dropped 65% from its high, condo sales are up 76% and it is believed that by the end of the year Miami will see a new record set in volume, which even exceeds that set during the height of the bubble.

Of course savvy real estate investors who can screen properties quickly and have access to a great transactional lender can find deals all over the country but these markets may well be worth checking out.
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The Most Cost Effective Way To Find More Properties

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on Tuesday, 04 October 2011
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There are all types of complicated Internet marketing strategies and sales funnels that you can set up today but perhaps the most cost effective of all for finding more wholesale inventory has nothing to do with the world wide web at all.

There are distressed homes to be grabbed up all around us. In addition to bank owned REOs and the properties being peddled by other wholesalers there are thousands of homeowners becoming delinquent on their mortgages as well as many homes needing to be sold quickly due to divorce and probate.

Of course exactly how many homes are in foreclosure or are in a distressed state in your area can vary, but taking a look at some of the numbers from data compiler Realty Trac it is likely an enormous figure. In August alone 1 in every 266 homes in Lee County, Florida received a foreclosure notice. In many parts of Los Angeles this rate is around 1 in every 100 properties. In Las Vegas, NV some zip codes are saw 1 in 19 or even more foreclosure filings in August this this. This of course doesn’t count all of those who have already fallen into default in the last year or two and who still need to sell their homes.

This means that you must certainly personally know quite a few people who need to sell. More importantly perhaps, it means that everyone you know also knows a number of people in need of help. Just through personal contacts alone you should easily be able to find more than enough inventory to keep you busy flipping homes for quite a while. The question is are you reaching out to them and do they know that you can help? If you simply traded contact details with everyone you ever come into contact with and told them what you do, you should have more than enough homes to make millions.
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