Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
13y
I am guessing that is probably happening in a lot of markets with a 30k-60k purchase price. That price range allows a larger segment of the population to purchase for cash. In L.A I am even seeing homes around the 250k range bought for cash by rehabbers. There is definately a lot of cash floating around. Where else can someone get the returns that they can get in real estate.
I am wondering for the 30-60k homes what about of rehab is getting put in to get the 130k-160ARV.. maybe it is worth it to bid a little more to get the deal? Of course it all depends on your profit.
Involved In Real Estate · Omaha, NE · Member since 2012 · 140 posts · 34 votes
13y
@J Scott Have you always been in a larger market like ATL? Ive been contemplating moving to a much larger city but I'm a bit uneasy about diving in and competing with the big dogs such as yourself. I have about 80k people in my city and a 5 square mile area that fits my investment style, not exactly a sprawling metropolis.
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
Depends on what you are looking for. For the rehabber it's slim picking. Very few REOS. My area has several foreclosure sale buyer teams who buy anywhere from 3 to 10 houses a month but their margins have become so slim I don't know how they do it. They get almost everything rehabbed (most do minimal rehab) and back on the market and sold in weeks. The biggest advantage I think they have going for them is 1) there are so few straight sales for buyers ready to buy, and 2) their appraisals are coming out OK. Appraisers are assigning highest values to straight sale "rehabs" even if the rehab is very minimal. The bulk of the listings are short sales and the same house that goes as short sale sells for considerably less than the rehab with only paint and carpet.
Out-of-area landlord buyers (from areas way more expensive in So Cal) are now showing up at foreclosure sale in my areas. They'll pay $120K for the house the rehabber is looking to get for $90K. No serious rehabber competes with that.
IMO, for owner-occupant buyers, this is the time to make offers on short sales and wait them out. There are some good deals for those have patience to wait out a short sale and don't mind making more than a few offers.
I'm with J Scott. Anything could happen so it's hard to plan for what will make inventory flush again. Other than cash on hand, which always works.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Brian Beadle:
@J Scott Have you always been in a larger market like ATL?
I'm in a suburb of Atlanta, not in the city.
The area I focus on has about 100,000 people and covers about 35 square miles.
I like the suburbs because the houses are newer and more uniform. And my area is about as far as I'd be willing to drive on a regular basis (about 30 minutes from home).
Investor · Reston, VA · Member since 2011 · 683 posts · 191 votes
13y
Inventory is extremely low in Northern Viriginia. There are bidding wars on anything decent for a buy and hold, let alone flip. I went to the court house a couple of weeks ago and saw some large crowds. I think the court house is good for buy and hold and owner-occ. I was interested in a new personal residence (downsizing). My sale was cancelled.
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
13y
This mirrors my recent thread on Flippers and Phoenix market. The actual flippers and rehabbers I've seen lately are being forced to sell for a smaller margin OR try and convince end users that their overpriced product is a "good" deal. I see this getting worse in 2013 and beyond for the near future. Rich
Investor · Reston, VA · Member since 2011 · 683 posts · 191 votes
13y
Rich Weese, inventory is clearly pushing prices as demand is robust. In my region inventory is down 34% YOY. I think it will be a good couple of years+ for price appreciation and rent increases.
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
13y
Cheryl- time will tell as I've said before. I agree on the rental increases and am seeing it where I have properties. I think those will continue. I'm not as positive about prices. When the crash started, it went like wildfire-this time (whenever) will probably be the same. I have a couple simple rules.
1. When Everyone is getting on the investment wagon, I get off.
2. When everyone is getting off the wagon, I get on.
These have served me well. I'd rather be too early than too late. It allows me to live another day... Rich
Residential Real Estate Agent · Chandler, AZ · Member since 2009 · 1k+ posts · 928 votes
13y
Inventory in Phx is going up, but at a slow rate. We are still very low compared to historical averages. Foreclosures filings are holding steady at 125-150 per day. We are in our slow buying season so prices appear to be stagnate, but I think we will see good appreciation again next year. The big bulk buyers have now left but competition is still extremely high. Everything is very hard to get right now due to our ramp up in pricing. Banks are coming back with extremely high BPO's which no one buys and they end up going to foreclosure.
Brian, I just noticed you are from Saginaw. I grew up there and wanted to start looking at that area to invest in. We should talk some time.
Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
13y
Where do you guys see the opportunity in today's market? If prices are just starting to go up ....a new frenzy/bubble starting I could see the advantage being that one can see their house quicker and for a higher price if you are looking to rehab/flip because of demand ...but the issue is getting deals.
Despite it being harder to get loans on investment properties there is a lot of cash out there picking up inventory ,and all the institutional buyers /hedge funds purchasing properties in bulk which I'm not sure we had as much of during the last frenzy.
Involved In Real Estate · Omaha, NE · Member since 2012 · 140 posts · 34 votes
13y
A shrinking inventory seems to be the majority trend.
In a market with small inventory and even smaller margins, is your strategy going too involve hammering out multiple low margin deals or hold out for the rare home run deal?
Rehabber · Alexandria, VA · Member since 2011 · 446 posts · 171 votes
13y
Inventory in my area seems to be about the same as last year. The problem I see though is that a lot of the houses in my price range (30-60k purchase; 130-160 ARV) are routinely going for thousands above asking. I'm wondering if a lot of these are going to buy, fix, and hold buyers as the rental market here seems to be doing pretty well.
Its made me rethink my business model and look closer into buying and holding anything I can purchase and fix for under 68% ARV.
Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
13y
I am guessing that is probably happening in a lot of markets with a 30k-60k purchase price. That price range allows a larger segment of the population to purchase for cash. In L.A I am even seeing homes around the 250k range bought for cash by rehabbers. There is definately a lot of cash floating around. Where else can someone get the returns that they can get in real estate.
I am wondering for the 30-60k homes what about of rehab is getting put in to get the 130k-160ARV.. maybe it is worth it to bid a little more to get the deal? Of course it all depends on your profit.
Investor · Paradise Valley, AZ · Member since 2012 · 361 posts · 214 votes
13y
I agree with Justin about the Phoenix market. REO pricing here is through the roof crazy high. Thing about it is that fannie or freddie buyers can buy these expensive REO's for 3% down and if they use Fannie/Freddie lenders no appraisal is needed so the comps just keep going up. This is our slow season but I expect prices to shoot up in the spring. Our inventory is still low based on historical averages. I made two short sale offers in the past week which were accepted. Assuming the bank accepts my offer I will flip them in the spring.
Property Manager · DeLand FL · Member since 2012 · 860 posts · 243 votes
13y
Pretty steady and available in all price ranges and styles, SFH, double, duplexes, even plenty of commercial. Also ranges from very little work to complete guts. We even have tons available throughout the Niagara Falls area, including commercial only minutes from the falls if you can believe it.
I see no real changes for 2013 and in fact probably see some better deals that require less work coming onto market as well.
Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
13y
Western New York area seems like it's still a good place to be especially for cash flow. It is amazing what you can buy per square foot. I had done some deals there in the past. How are the vacancy rates in the area? Have you noticed any improvements/gentrification in any neighborhoods?
Whitefish, MT · Member since 2011 · 12 posts · 0 votes
13y
In the area I like to work, Pierce County WA, right now their are two HUD homes that I can bid on and zero Fannie Mae properties, and only a handful of bank owned properties. The inventory is very low and its killing me. Spending way too much time trying to find a project. And the prices I'm competing with are crazy and leave little or no profit potential.
Rehabber · Alexandria, VA · Member since 2011 · 446 posts · 171 votes
13y
Inventory in my area seems to be pretty high. A lot of houses on the MLS are going for way over asking. I've noticed that competition is really ramping up these last two months of 2012. It's kind of discouraging as I thought more investors would be sleeping, enjoying the holidays and getting fat around this time of year.
I guess I wasn't the only one who thought about capitalizing on deals this time of year.
As for 2013, every realtor I talk to says spring time is going to be big. I've noticed houses that were picked up by investors in September and October are listing for 5-10% more than what I thought they would be listing at. If they sell then that's a good sign for my market. Then again, I tend to list my houses lower than the competition so that may just be me... Either way, I'll be sure to get my slice of that pie for this Winter season and for Spring next year.