SMALL TOWN INVESTING/ WHOLESALING POPULATION 4,000 OR LESS

[Henrietta M.]

I see so many motivated sellers from small towns but I know finding a buyer would be difficult. Where are the best places to wholesale besides obvious Daytona, del ray beach Florida, st Louis MO, OH, AZ, ETC.

What are the options, if any, with these small town deals? Any input is appreciated🙆

Thanks!

[Bill Gulley]

OMG, another coach........ 

Good question as to population.

Demographics effects value and marketing time. 

Consider a larger area, is the small town a bedroom community of a larger city, or is it miles away having to survive on its own population?

Go to the courthouse and ask at the Recorder's Office how many deeds were filed last year and year to date in that town. If they say 185 and 121, as an investor, I'd run! You have a very inefficient market. 

Prices will reflect that, but buying dirt cheap means selling dirt cheap in a small town that isn't "related" to a larger market.

Study real estate basics, location, market influences, inventory turn over, economic factors that effect value. If you can't define the market you can't define the price.

Finding cash buyers can be rather irrelevant, a cash buyer in a very inefficient market will most often require a lower price. Small town transactions are loaded with seller financed deals to improve marketability, but that doesn't ad value to a property. Why tie up your money in an inefficient market?

Also consider the rental market, that is most likely going to be your activity. What demographics do you have there? Stable employment, rental inventory, what is the utility of the property? Population increasing or decreasing? Is the town near broke or is it in good financial shape? Is it dependent on one industry or is the economic base diversified?

That's why investing in larger areas, such as you named, are a better investment. Real estate is an inefficient market compared to other financial investments, but even in an inefficient market place you need the most efficiency or activity that you can find. 

Understanding the basics will answer most of your questions. :)