Beware of "Killer" out of town deals...

Okay, let me take you back a few years to the good old days- when anyone could make money in this business...

As many of you know, 5-8 years ago we were in the golden age of wholesaling. In my area, Baltimore, you could get just about anything under contract and make money on it- or so it seemed. If you couldn't unload your property then the joke was... raise the price and advertise it in The Washington Post or the New York equivalent. I don't mean to insult those buyers, but they really didn't know our market. They were coming from a different market and using their "home market" perspective. They scooped up properties in Baltimore that would have been great deals in DC, or New York, or California. Unfortunately for them the deals often times weren't deals at all and they ended up getting their butts handed to them.

That brings us to today... I have recently been asked by a relatively new investor what I thought about some supposed "killer deals" located out of state. My answer is this- if the wholesaler has to go 500 miles to find a buyer then it probably isn't a deal. Doesn't that make sense? If the locals that know the area don't want it then it must be a different kind of "killer" deal. The kind that will kill your business.

If you live in an area where you can't really buy properties that cash flow well and you want to take your business out of town out of neccessity, please do a lot of homework. Don't cut corners and don't just listen to the people that want your money.

Best of luck...

Mark