Recent trends have suggested that we may see home prices fall another 5-10% before the close of 2011. If this does happen what does it mean for real estate investing and in particular how will it affect those that are wholesaling?
It certainly doesn’t mean that real estate investing through flipping contracts or wholesaling homes will be any less attractive. For a start if you are buying properties at 30-60 cents on the dollar there is clearly plenty of room to take a 5-10% cut and still make serious profits. Secondly the fear mongering going on in the media and a continued slight slide in home values will certainly fuel sellers and banks motivation to sell properties quickly and on even better terms. So in fact bigger discounts could easily match if not exceed any small declines in the market.
Those who can hold on to their properties until the end of the year should be in an even better position and will be able to scoop even larger spreads as the market rebounds. Despite more foreclosures on their way and mortgage rates rising 2011 is still predicted to be the turnaround year for the housing market that everyone has been hoping for.
However one thing is for sure and that is it is those real estate investing companies that are harnessing the best marketing techniques and are operating at the highest ROI and profit margins that will come out the winners. These are the players that will be perfectly positioned to explode their real estate investing businesses as more buyers and investors return to the market. In addition to better margins enabling you to reach out and get your properties in front of more prospects quickly, the brand benefits of having come through these ‘tough’ times will put you far ahead of any newbies or those choosing to reestablish themselves after the dust has settled. Consumers interested in real estate investing and buyers looking for rent-to-own deals want to do business with a company that has stuck through the worst of it and won’t disappear when things get tricky.