Is there an "investor boom" taking place?

Question

Is it just me or does there seem to be a deluge of people jumping into the investing landscape right now?

I've only been doing this for a little over 5 years now and was wondering
if some of the more experienced people could share with us how this time period compares to the flipper boom that occurred 7 or 8 years ago.

Do you see the same growth in investors?
Do you see any issues coming with everyone buying these properties
as buy and hold rentals? 
Can you compare the number of investors that you saw back
in the flipping boom with the number you're seeing today? Is it 
a concern? Is it starting to approach those numbers?

Or does it just seem that there is some significant growth given that there was hardly any competition in investing the last few years and we're just seeing
a little bit of a bounce back finally?

Account Closed · Answer

I cannot figure it out from the link.  You tell me.   My opinion still stands though.  Real estate in the U.S. is currently on sale to the entire world.

Account Closed · Answer

Tara,

Fortunately, the big boys haven't come to the Silicon Valley yet.  I guess our prices are too high for them to form a REIT as their exit strategy.

The theme at the auctions have been buy high, sell higher. It has worked for the flippers in the recent months. Deals are rare, and it there are more investors day after day.  It seems like real estate in the U.S. is on sale to the entire world. Only the native here haven't figured it out yet.

Account Closed · Answer

So true.  Quite a few BP members fit this profile.  :)

JImarcus Blanding · Answer

I agree with Joel, we haven't seen anything yet. My take on it is that more people are entering due to other investment returns are extremely low(stock, 401K, cd's, etc.) and word is out that it is a buyers market right now. I know in atlanta, I have seen several people make that leap, and I myself have got back into the market but this time as a full blown investor controlling my own deal vs. just putting in money and someone else gets more on the return.

The education and awareness is higher and more accessible as well in my opinion than before or maybe my interest is, LOL. I'm no expert but I hope to be sitting heavy on many properties when it turns to a seller market. If I haven't learn anything from my past dealings I have learned when every is buying sell, and when every is selling buy a discounted rates with several exit strategies.

Xing Zhu · Answer

Minh:
I cannot figure it out from the link. You tell me. My opinion still stands though. Real estate in the U.S. is currently on sale to the entire world.
----------------------------------------------------------

I wouldn't know either, but I guess quite a few.

This is part of the capital globalization process. In the last 20 years, US has focused  on manufacturing houses. Now the price level is so attractive to the whole world that many foreign financial entities and individuals consider this as an opportunity they can't afford to miss, especially when the money printing machines of central banks around the globe  are running 7/24.

I remember that Greenpan was supporting the idea of subprime loan before the crisis; he was wrong. Then he said after the crisis that  a good solution to solving the housing problem was to set a fire; he was wrong again:)  People will buy assets with good value.

Xing Zhu · Answer

Minh: It seems like real estate in the U.S. is on sale to the entire world. Only the native here haven't figured it out yet.
----------------------------------------------------------------------------

How many units has this girl bought in the following link?

https://www.facebook.com/photo.php?fbid=281786008610319&set=a.208408852614702.41700.208371489285105&type=1&theater

Tara G. · Answer

And we are seeing CA based entities bringing hordes of cash to county auctions.. Been outbid now a couple of times.. Mom and pop outfits ,like me, just cannot compete with big guys.. This entity has been buying at pretty much every auction.. They can live with razor thin margins, i guess. With small timers like us, the risk gets too high, especially for courthouse auctions.

Bummed at being outbid:-(

Xing Zhu · Answer

Flippers are market makers.
Investors are rental property owners.
I myself is a speculator:) I prefer properties in prime condition and get very little rental return. I bet on appreciation mainly.

Glenn Espinosa · Answer

I've definitely noticed an investor boom in my area. Everyone and their grandmother has a rental property, is looking for a rental property, learning how to flip, actively doing a flip, etc.

I can't complain as I'am a fairly new investor also.

My question is how are you guys separating yourselves from these new investors? Profit margins aside, a lot of flips in my area feature very similar fixtures, design elements, etc. Everyone is doing open layouts, granite, and neutral colors.

I've talked to a few investors in my area and what they're doing is buying up 2/1's and doing bigger rehabs that require large additions. New investors don't usually touch these type of flips as they require more rehab experience.

Lipstick foreclosures are hard to come by and are usually bid up to the point where profit is slim to none. Im looking at new acquisition techniques that others in my market have yet to capitalize on.

Also, I'am researching ecofriendly and sustainable technology and will hopefully implement the two in my future flips.

These are just a few of my ideas... How else are you guys differentiating your businesses from the newbies and what strategies and niches are you seeing?

Rob K. · Answer

I think it's like when poker first came on TV and everyone ran out and started playing. Then when real estate shows came on TV, everyone jumped on that bandwagon. I went to a few storage auctions about ten years ago. Hardly anyone was there bidding. After it came on TV, I went to one and it was packed. I imagine there's all kinds of people looking to ship people's stuff across the country or mine for gold in a foreign land. The sheep see something on TV and they want to do it.

I know several people who have jumped on the real estate bandwagon. My neighbor has a rental house. My carpet guy bought two houses. His mailman bought three. My furnace guy is looking to buy one. My roofer has about fifteen.

What I don't understand are the people who work a job making their boss rich and have a few rentals on the side. It baffles me that they don't buy more when they see the returns that they're getting.

When I started buying in the mid 90's, you didn't have as many people flipping as you do now. Anytime it was talked about, some Debbie Downer would have to pipe up about how their friend/cousin/nephew went bankrupt trying to flip a house.

Things have changed. You also have WAY lower interest rates now, which makes it easier.