Anyone else having a big decline in deals?

Question

Hey everyone, thanks for taking the time to read this.

i've been in wholesale in texas for a few years, my team of 7 has been averaging 25 deals a month for years. for the past 6 months or so we have been seeing an uptick in unrealistic sellers and getting by on about 5-6 deals a month. The market here has been CRAZYY for a while now (seller's market). I'm wondering if anyone else is experiencing this?

i know our inventory on market is really low, should it be the same for off market though?! Please let me know if anyone is seeing the same, and if you're powering through, how are you doing it?

Scott E. · Answer

The past 12 months of finding deals have been the most challenging 12 months I've experienced since I got started over 10 years ago.

Active inventory is low, and motivated off-market sellers are few and far between. Homeowners have become more sophisticated and many understand that it is usually foolish to sell their home off market compared to going to market and stirring up a bidding war.

Along with that, less homeowners are interested in selling due to rates are going up, plus if they sell now many ask the question "with housing prices having gone up so much lately, if I sell, where would I go?

Rodney Sums · Answer

I hear you. People seem to love getting new, bigger, better or getting what they think is a "deal". And those realtors would have to get you that referral fee. I know realtors I work with love doing those pocket listings especially if they are comfortable being a dual agent. If someone lived in an old house or in a bad neighborhood, I could see enticing them to sell to you, and getting in to contingency on a new buy. If you ever use that I'd love to hear how it worked out!

Rodney Sums · Answer

I'm no wholesaler but I was curious about how you could deal with your situation. Do you ever connect with many selling agents and ask them to let you know about a property before it goes to the MLS so you can get a potential seller to "upgrade out of their current home and right in to this newer home that's not on the market yet" that way when they ask where can they go, you have the answer, you get a deal and so do your agents in network? Too much work?

Matt Devincenzo · Answer

I remember a very similar sentiment a few years back...maybe 2016ish? It was as the market really took off after it's 2010-2014 recovery period, and deals were thin. Eventually though the market stabilized a bit and stopped the seemingly break neck appreciation, and buyers/sellers adjusted expectations to the new price point. The problem with the current market is you/I may pass on a deal that only works if the market continues to appreciate. In hind sight I wish I had closed on a half a dozen potential projects the last year, but I just couldn't justify the risk that things wouldn't continue. Even a normal appreciation market could have made those projects bad deals...but 15%+ appreciation made them great. So eventually things will stabilize and sellers will be more willing to negotiate, and I'll feel more confident in the actual value and there will be some more projects to actually do.

Raquel Nolen · Answer

That's actually a pretty brilliant idea. I get that question a lot. Although it's not the answer to ALL the problems wholesalers face right now, it's a great answer to about 25% of deals we come into. Thanks for the response!

Dustin P. · Answer

Not seeing a downturn in Phoenix. I'm doing about 10 a month just me and my team as a whole doing 25-30 a month. All MLS/pocket listings, no marketing costs

Buyers seem to be adjusting to the higher % and just seem content on making less on deals, or they are shifting focus to higher price deals. I had never done a deal above $600k before this year and now I've done a $699k, a $950k, a $1.03M etc

David Lee Hall, III · Answer

Unrealistic sellers are the biggest thing I have run into. Especially if a lipstick/paint and carpet rehab. I was at one place yesterday, ARV $180-$190 and they wouldn't go lower than $150 and another today that wanted $205 or they would just keep it (and market value as is was probably about $160k and ARV around what they wanted). Between people that think $5,000 is a discount and folks that reject selling below market value in this low inventory environment has me struggling to find anything that isn't a 6-figure rehab. Those are plentiful (yay?!?).

Adam Macias · Answer

It's all about motivation. Does someone have a need.

Bria Johnson · Answer

@Daniel Leonardis where in NE do you invest Daniel? I live in NE so I’m curious about what deals you find Denice I am search of a 4 family

Anyone else having a big decline in deals?

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