How Can Investors Profit In A Sellers Market

Dated: November 10 2017

Views: 133

For the past few years the market trends have been tougher and tougher for investors. Year over year September 2017 numbers state that closed sales are down 18.2% and new inventory on the market down 25.8% The lower inventory is pushing prices up 7.6% over the last year. These changes can make it difficult for investors to find what they are looking for. It is almost impossible to find a flip, I agree. It takes months of looking and quick offers on properties that may come through different avenues than your typical bank owned flip. What about those investors that are used to paying for a $100K single family home and getting 1300 a month and getting a 10% cap? The prices on those homes are now around $150K. With the same numbers (because rent has been relatively stable) the cap rate has been decreased to 6.6%. That’s a lot of cash left on the table. My suggestion is to look at some smaller multifamily solutions. An investor may be more likely to find a 2/1 duplex that can be bought for $160K with income of at least $900 per unit. With similar calculations, that investor can get at least the 10% return they are used to and still be making income when there is the inevitable turnover. Happy Property Hunting!

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