The Profits and Pitfalls of being a Wholesaler in today’s real estate market
No matter where you are in America being a Wholesaler in today’s real estate market is challenging. Foreclosures are at an all time high and property values are decreasing daily as a result. Creating enough equity in a property that is underwater ( the home owner owes more than the home is worth) is difficult unless you short sale the property and then wholesale to an end buyer. Unfortunately short sales are extremely time consuming and not something that an average wholesaler has the experience or time to take on. Therefore many of these homes, though they are vacant and the home owner is motivated, are not profitable for today’s wholesaler.
However on the flip side we are witnessing the end of the so called “Post-World War II baby boom”. In the years after the war, couples who could not afford families during the Great Depression made up for lost time. There are an estimated 77.3 million Americans who were born during this demographic boom in births (between 1946 and 1964). What does this mean for today’s wholesaler? The “Baby Boomers” are now the elderly of America. Sadly many of them are now passing leaving behind their homes and estates. These homes are prime picking for today’s wholesaler since most of them are paid off leaving no mortgage balance and PLENTY of equity for the wholesaler to create a great deal and make a great profit. I am not trying to be morbid and say that we need to profit from someone’s grief of losing a loved one. I am saying that these families need to sell these homes in an effort to pay off nursing home or funeral expenses. With the economy in such a turmoil many of these families are finding it hard paying for these expenses. By selling the home, even at a discounted price, they are able to pay off these expenses and possibly be left with a profit to split among the beneficiaries. There are 4 times as many probate properties currently on the market than there are foreclosures. (continued below)
The pitfall for today’s real estate wholesaler is that the current market is filled with foreclosures and low property values leaving no room for profit. Many wholesalers will agree with me when I say that at least 7 out of 10 motivated sellers that I contact are in need of a short sale. Even though I have learned to leverage the short sale market and now have a team in place to negotiate my short sales this is not a task that every wholesaler is capable of taking on. This leaves many wholesalers frustrated and not profiting from the greatest market in history to profit from.
However the probate market is filled with opportunities like never before! According to foreclosurelistings.com There are currently 2,178,073 foreclosures listed on the MLS in America that means that there are currently over 8,000,000 probate properties available. That is an ASTOUNDING number of properties! It is time for wholesalers to switch gears and begin to dig out these properties. Check the news paper obituaries, funeral home websites or county probate records. You will need to do some research and find the beneficiaries but I have provided enough resources on this website to help you do that effectively. Start with zabasearch.com
Do your research and contact the families. You may have to wait for the probate process to take effect but at least you will have made contact and the family knows to contact you when the process is complete. Remember to be com[passionate with the family they have just lost an important part of their life. Don’t focus on your profit but instead focus on your helping them out. This will help you to stay focused on their feelings.
Another way to find real estate leads is to use lead generation websites that will provide real estate leads. Many of these leads generation website will provide bankruptcy leads, foreclosure leads and some will even give you moving leads. Moving leads are a great way to find people who may be selling their home or need a home to buy. There are many lead generation companies out there that will provide you with property leads. I do allot of online lead generation since I do all of this from home. I also use a short sale lead generator when I need leads. Many of these lead generation companies give you unlimited leads for a small fee. I suggest that you find your own property leads by scouting your neighborhood first but buying leads from online lead generation companies is a great way to find leads as well. There are times when I need leads in another state for a buyer so I will access my online lead generation company to find leads for a property that my buyer may be interested in.
A great wholesaler is always able to adapt to an ever changing real estate market. Change your focus when necessary, see what properties are a pitfall and which will provide a profit and then stay focused and persistent on those that will profit. The foreclosures will end eventually and the market will stabilize but until then you need to refocus and find out what is going to profit you in today’s real estate market.
Filed Under: assigning real estate • make money • Uncategorized
Carol, I hope I get to meet you someday! You never cease to come up with ways to help us with this REI. For those of us having a difficult time you have yet another angle to accomplish our goals. I appreciate all your help.
Thank you
Karen
http://www.foreclosurelistings.com/