How many REIs are there anyways?

Investor · Mesa, AZ · Member since 2023 · 41 posts · 17 votes

You know how once you decide to go all in and start doing something it feels like everyone is doing it? Maybe it's just because now I'm a part of this community and I'm completely absorbed and enamored by all of this, but it seems like the more I learn and the more I know what to look for it appears that there are thousands if not tens of thousands of investors in my market alone. Even just talking REI with colleagues and family now I'm shocked at how many of them are flipping, wholesaling, or landlording properties or at a minimum educating themselves and trying to find or make a good deal. In fact, I went door to door in my neighborhood "walking for dollars" and was shocked at how many of my neighbors said they get flyers, business cards, post cards, fake handwritten notes, etc…

Maybe I’m crazy and it’s not that high. How many small/independent real estate investors are there? Am I getting started too late? Maybe it’s just my market. We are willing to move if there are better markets with less competition anywhere in Texas or Nevada.

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Evan Polaski

Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes

@Joshua Amezcua, it is not your market. I would have to guess there are millions. Social media influencers selling courses, HGTV making it seem like a flip is a simple way to make $100k in 3 months with no risk. It gives the general public the optics that real estate is just quick money. The ability to market yourself and your masterclass, with some decent marketing knowhow is very easy in today's world.

Add in realtors, wholesalers, syndicators, office and hotel and retail owners, the guy down the street that owns 5 rentals around town.

This is a highly saturated, hard to penetrate business to be in. I mean look at the number of people you see posting on these forums, then probably multiple it by 100+ for those that just lurk. Or I went to meetup many years ago, about 40 people there. Of those, I would say maybe 15 were ACTUAL investors and had done something. Another 15+ were wholesalers just trying to find deals, 8-10 were agents that "cater to investors". But this was just one small meetup in Cincinnati. There are many others in my market alone.

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Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
3y
@Joshua Amezcua, it is not your market. I would have to guess there are millions. Social media influencers selling courses, HGTV making it seem like a flip is a simple way to make $100k in 3 months with no risk. It gives the general public the optics that real estate is just quick money. The ability to market yourself and your masterclass, with some decent marketing knowhow is very easy in today's world.

Add in realtors, wholesalers, syndicators, office and hotel and retail owners, the guy down the street that owns 5 rentals around town.

This is a highly saturated, hard to penetrate business to be in. I mean look at the number of people you see posting on these forums, then probably multiple it by 100+ for those that just lurk. Or I went to meetup many years ago, about 40 people there. Of those, I would say maybe 15 were ACTUAL investors and had done something. Another 15+ were wholesalers just trying to find deals, 8-10 were agents that "cater to investors". But this was just one small meetup in Cincinnati. There are many others in my market alone.
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Joshua Amezcua
OP
Investor · Mesa, AZ · Member since 2023 · 41 posts · 17 votes
3y
Quote from @Evan Polaski:

@Joshua Amezcua, it is not your market. I would have to guess there are millions. Social media influencers selling courses, HGTV making it seem like a flip is a simple way to make $100k in 3 months with no risk. It gives the general public the optics that real estate is just quick money. The ability to market yourself and your masterclass, with some decent marketing knowhow is very easy in today's world.

Add in realtors, wholesalers, syndicators, office and hotel and retail owners, the guy down the street that owns 5 rentals around town.

This is a highly saturated, hard to penetrate business to be in. I mean look at the number of people you see posting on these forums, then probably multiple it by 100+ for those that just lurk. Or I went to meetup many years ago, about 40 people there. Of those, I would say maybe 15 were ACTUAL investors and had done something. Another 15+ were wholesalers just trying to find deals, 8-10 were agents that "cater to investors". But this was just one small meetup in Cincinnati. There are many others in my market alone.
This is great information. It has actually blown my mind the number of people I speak to on a daily basis that, at some level, consider themselves a real estate investor. I listen to the Real Estate Rookie podcast, and am so inspired by what I see and hear. I am perfectly fine with a 'slow and steady' approach to this. I have a solid W2 and my wife is about to return to work in 12 months when our youngest starts school. I am doing my best to drink from the hose so to speak, and plan on buying my first investment property before the end of the year.

I am simply stunned by the number of houses in my market that were purchased late 2022 or early 2023 and are back on the market at a 40-50% markup. I've walked a bunch of these houses just to talk shop and see what I'm up against and the quality of work is pretty good. I do my own renovations as I grew up fixing and updating houses with my dad. I just feel like I am seeing things in slow motion and curious how anyone getting started stays ahead of the millions of other investors.
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Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
There are many in my market, yet I can get as many deals as I want,10 a week come to me without even asking. Once you have a rep of closing AS IS cash, deals come to you,., Its ALL about your network,
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Joshua Amezcua
OP
Investor · Mesa, AZ · Member since 2023 · 41 posts · 17 votes
3y
That is awesome. Unfortunately in my market "AS IS" cash would mean needing half a million dollars cash for purchase plus repairs. I'd either need private capital or to change my market for that strategy. I'm considering using my VA secondary entitlement for a second home, then in a year taking the equity of both houses combined and using that to fund our first all cash fix and flip. Either that or moving to the Midwest or central TX with about $300k cash in hand.
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Konstantin GinzburgPro Member
Member since 2021 · 376 posts · 242 votes
3y
@Joshua Amezcua
It's not just you. There has been a rush of new investors over the last few years (that includes me since I only jumped in 2 years ago). There have been a lot of factors that contributed to it. Low interest rates making real estate a more lucrative investment for both small operators as well as corporate investors. The prevalence of inflation and rising home prices on the news has also encouraged people to jump on the bandwagon. AirBNBs and other STRs have also attracted real estate investors as the travel industry really took off after the pandemic. There are many factors that contributed to this. I wouldn't say you are too late to the market. You simply need to be patient and don't rush into a deal. Educate yourself by reading and listening to podcasts to ensure you are able to identify a good deal when you find one and then be persistent in searching for a deal and be ready to make an offer when a deal is presented to you. Good luck and don't get discouraged. Real estate is a marathon, not a race!
3 Reply
Ruchit Patel
Bay area, CA · Member since 2021 · 383 posts · 306 votes
3y
As long as you have money, and right network, don't worry about saturation. USA is too big and has too much money, everybody can win for now.
2 Reply
Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @Joshua Amezcua:

You know how once you decide to go all in and start doing something it feels like everyone is doing it? Maybe it's just because now I'm a part of this community and I'm completely absorbed and enamored by all of this, but it seems like the more I learn and the more I know what to look for it appears that there are thousands if not tens of thousands of investors in my market alone. Even just talking REI with colleagues and family now I'm shocked at how many of them are flipping, wholesaling, or landlording properties or at a minimum educating themselves and trying to find or make a good deal. In fact, I went door to door in my neighborhood "walking for dollars" and was shocked at how many of my neighbors said they get flyers, business cards, post cards, fake handwritten notes, etc…

Maybe I’m crazy and it’s not that high. How many small/independent real estate investors are there? Am I getting started too late? Maybe it’s just my market. We are willing to move if there are better markets with less competition anywhere in Texas or Nevada.

There are about 2,000 members in AZREIA.org in Arizona. I'm told it's the largest REIA but who knows for certain? Meetings all month long and about $20 per main meeting once a month. Along with that, you have everybody else who thinks Phoenix is the market it used to be. It isn't. Now you have to work to actually find a good deal. 6 of the largest wholesalers in the country are in Phoenix/Mesa. Because it is so oversaturated, a lot of people are trying markets in the midwest and deep south where they can compete.
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Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
3y
@Bob S., to clarify your comment: you have a network that delivers you 10 properties for sale per week or 10 deals that you actually pursue and buy? I am on a handful of wholesaler lists, and see a few properties per week, but I wouldn't consider any of them deals worth pursuing. Some I wouldn't touch for any price, and others simply want way more than they are worth.
My comment on saturation is exactly what you prove, though. There are a lot of established players in the space that have reputations with wholesalers and cash to buy. Can Joshua, or anyone else starting out, get to that point? Of course. Being a saturated market and being impossible to penetrate are two completely different things.
My point is: there are a lot of real estate investors out there. The surest way to get deals to start building a reputation is to pay more than everyone else with a surety of closing. Cash, no inspections is the easiest way to create surety of closing, but is typically not feasible or advisable for someone starting out. Paying more than someone else means you either see something others don't see, have a more efficient way of executing at lower costs, value the risks lower than others (meaning lower return threshold) or profit is not the only motive, i.e. trying to begin building a reputation with brokers/wholesalers/sellers.
If this is the industry you want to be in, great. Go for it. Take a leap. You will never get anywhere without taking action. And, come in with eyes wide open. Real estate is a both low risk and very high risk. The high risk comes from it being a capital intense business. I can pick stocks with $10 at risk. The deals I have gotten in relative recent history involve hundred+ thousand of dollars at risk.
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Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
Out of the 10 about 7 I would close on, I CAN'T close that many per week anymore. I have done about 500, about 350 of them were in a 3 year span. Its all about your network. All are cash as is and NO I do not pay more than others but I ACTULLY close, vs the clowns that just put it under contract with the hopes of closing .

All the best
0 Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
3y
@Joshua Amezcua
I think you've hit on something - in the last few years, especially when interest rates were low, a lot of investors were pushed into all sorts of investments - wine, crypto, NFTs, real estate - searching for yield that they couldn't get in savings and bonds. And yes, everyone with a house to sell (and lots without) are getting marketed to.
With that said, though, I think a lot of people come in with a lot of enthusiasm and aren't willing to put in the time or the work. For example, it took me a year to find my first BRRRR, and 3 years to find my first seller finance deal.
So - I don't see a lot of posts from people saying "I'm ready to spend the next 3 years being patient and saving up." They all want to buy NOW. If you can stay patient, save up, be conservative, and hang on, you'll get way ahead.
2 Reply
Noah CorwickPro Member
Realtor · Phoenix, AZ · Member since 2021 · 271 posts · 115 votes
3y
I'm in Phoenix as well, and it certainly has been feeling that way for at least the past 3-4 years. As others mentioned, AZ used to be this hidden west coast gem that you could get in at a low price and walk out pretty nicely deal wise. "If you can't afford to invest in Cali, invest in AZ" is how I sum it up.

I think the rates dropping to 3% brought additional awareness. I believe this made people stop and ask "why don't I just buy a house and then eventually rent it" without even knowing house hacking has been used for a while as a strategy.

Also AZ is a huge testing ground for new "innovations" in real estate. Tech companies test out real estate software and use Phoenix as a playground. Also from a real estate law standpoint, they use PHX to test the waters a lot as well.

Not to mention that people are flocking to get their real estate license left and right (and then most will leave in 1-2 after they struggle to find leads).

AZ is definitely a bit congested. We just need to let it run its course.

[email protected]602-834-4617
3 Reply
Julien J.
Investor · CO · Member since 2016 · 757 posts · 1k+ votes
3y
A lot!
The Seattle is saturated with investors. However, very few stick it out long enough to be successful and even less scale it up.
2 Reply
Joshua Amezcua
OP
Investor · Mesa, AZ · Member since 2023 · 41 posts · 17 votes
3y
Quote from @Nicholas L.:

@Joshua Amezcua
I think you've hit on something - in the last few years, especially when interest rates were low, a lot of investors were pushed into all sorts of investments - wine, crypto, NFTs, real estate - searching for yield that they couldn't get in savings and bonds. And yes, everyone with a house to sell (and lots without) are getting marketed to.
With that said, though, I think a lot of people come in with a lot of enthusiasm and aren't willing to put in the time or the work. For example, it took me a year to find my first BRRRR, and 3 years to find my first seller finance deal.
So - I don't see a lot of posts from people saying "I'm ready to spend the next 3 years being patient and saving up." They all want to buy NOW. If you can stay patient, save up, be conservative, and hang on, you'll get way ahead.
I have spent the last 2 months lurking, reading every book I can get my hands on, watching YT and learning to separate the gurus from the ones who actually know what they're doing and have their viewers' best interest in mind. I am in a great spot to start, and yeah I definitely know I'm picking a tough market to get my feet wet in. I'm willing to put in the work and not afraid to get dirty. Being a father and a homeowner I am not afraid to "unclog a toilet" as I read so often on BP.

I honestly think what I am missing at this time is a mentor. Someone who could look at our financial situation and say, "If I were in this position here is what I would do and here's why I believe it's the right approach." Or maybe not even that much. There is just so much information out there, and I am intrigued by so many different aspects of REI that it can be overwhelming to know which direction I should go. My goal is cash flow. At this point I couldn't care less about being "wealthy" or getting rich. I just want to make my money work hard for me and not the other way around.

I appreciate your time and feedback!
1 Reply
Joshua Amezcua
OP
Investor · Mesa, AZ · Member since 2023 · 41 posts · 17 votes
3y
Quote from @Julien J.:

A lot!
The Seattle is saturated with investors. However, very few stick it out long enough to be successful and even less scale it up.

If you could choose one quality or trait that separates those who succeed from those who bail, what would you say it is?
0 Reply
Joshua Amezcua
OP
Investor · Mesa, AZ · Member since 2023 · 41 posts · 17 votes
3y
Quote from @Ruchit Patel:

As long as you have money, and right network, don't worry about saturation. USA is too big and has too much money, everybody can win for now.
Thank you for the encouragement! What would you say is the most effective/efficient way of growing my network?
0 Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
3y
@Joshua Amezcua
just being honest - I don't think you 'need' a mentor. just keep reading, listening, etc. and ask any questions you have here in the forums.
go to REIA meetings and ask lots of questions and network and make friends.
i think RE investing takes time, money, and patience...
1 Reply
Julien J.
Investor · CO · Member since 2016 · 757 posts · 1k+ votes
3y
Quote from @Joshua Amezcua:

Quote from @Julien J.:

A lot!
The Seattle is saturated with investors. However, very few stick it out long enough to be successful and even less scale it up.

If you could choose one quality or trait that separates those who succeed from those who bail, what would you say it is?

Persistence
1 Reply
Joshua Amezcua
OP
Investor · Mesa, AZ · Member since 2023 · 41 posts · 17 votes
3y
Quote from @Noah Corwick:

I'm in Phoenix as well, and it certainly has been feeling that way for at least the past 3-4 years. As others mentioned, AZ used to be this hidden west coast gem that you could get in at a low price and walk out pretty nicely deal wise. "If you can't afford to invest in Cali, invest in AZ" is how I sum it up.

I think the rates dropping to 3% brought additional awareness. I believe this made people stop and ask "why don't I just buy a house and then eventually rent it" without even knowing house hacking has been used for a while as a strategy.

Also AZ is a huge testing ground for new "innovations" in real estate. Tech companies test out real estate software and use Phoenix as a playground. Also from a real estate law standpoint, they use PHX to test the waters a lot as well.

Not to mention that people are flocking to get their real estate license left and right (and then most will leave in 1-2 after they struggle to find leads).

AZ is definitely a bit congested. We just need to let it run its course.

This is great information. I know I can't go back in time to get started when rates were 2-3%. My first VA home loan was 2.25%, current one is 3%. I am definitely happy to own a good property with a solid rate and a low payment. I don't plan on giving that up. I'm trying to devise a plan to put our equity to work in this current market. If I have to wait a bit longer, so be it. But man am I motivated and wanting to get started today!
0 Reply
Noah CorwickPro Member
Realtor · Phoenix, AZ · Member since 2021 · 271 posts · 115 votes
3y
Quote from @Joshua Amezcua:

Quote from @Noah Corwick:

I'm in Phoenix as well, and it certainly has been feeling that way for at least the past 3-4 years. As others mentioned, AZ used to be this hidden west coast gem that you could get in at a low price and walk out pretty nicely deal wise. "If you can't afford to invest in Cali, invest in AZ" is how I sum it up.

I think the rates dropping to 3% brought additional awareness. I believe this made people stop and ask "why don't I just buy a house and then eventually rent it" without even knowing house hacking has been used for a while as a strategy.

Also AZ is a huge testing ground for new "innovations" in real estate. Tech companies test out real estate software and use Phoenix as a playground. Also from a real estate law standpoint, they use PHX to test the waters a lot as well.

Not to mention that people are flocking to get their real estate license left and right (and then most will leave in 1-2 after they struggle to find leads).

AZ is definitely a bit congested. We just need to let it run its course.

This is great information. I know I can't go back in time to get started when rates were 2-3%. My first VA home loan was 2.25%, current one is 3%. I am definitely happy to own a good property with a solid rate and a low payment. I don't plan on giving that up. I'm trying to devise a plan to put our equity to work in this current market. If I have to wait a bit longer, so be it. But man am I motivated and wanting to get started today!

Trust me, I shake my head once a week for waiting so long in my life to start investing myself haha.
You have a really solid foundation already in place with your two homes and the ability to utilize VA benefits. I agree in keeping your current homes and tapping into the equity you have. Assuming you have at least 20% equity in them, utilizing a HELOC might be a logical move to consider.
I'm curious, are you leaning towards a strategy in investing in rentals or flips?
Overall you are definitely ahead of the curve compared to most who are just starting out, so major kudos for that. The bones are there.
[email protected]602-834-4617
2 Reply
Ryan ThomsonBusiness Member
Real Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
3y
Look up the "frequency illusion"!
The Baader-Meinhof phenomenon, also known as the frequency illusion, is a cognitive bias that causes people to see something they've just noticed everywhere.

The Assumable Guy544 Reviews
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1 Reply
Joshua Amezcua
OP
Investor · Mesa, AZ · Member since 2023 · 41 posts · 17 votes
3y
Quote from @Noah Corwick:

Quote from @Joshua Amezcua:

Quote from @Noah Corwick:

I'm in Phoenix as well, and it certainly has been feeling that way for at least the past 3-4 years. As others mentioned, AZ used to be this hidden west coast gem that you could get in at a low price and walk out pretty nicely deal wise. "If you can't afford to invest in Cali, invest in AZ" is how I sum it up.

I think the rates dropping to 3% brought additional awareness. I believe this made people stop and ask "why don't I just buy a house and then eventually rent it" without even knowing house hacking has been used for a while as a strategy.

Also AZ is a huge testing ground for new "innovations" in real estate. Tech companies test out real estate software and use Phoenix as a playground. Also from a real estate law standpoint, they use PHX to test the waters a lot as well.

Not to mention that people are flocking to get their real estate license left and right (and then most will leave in 1-2 after they struggle to find leads).

AZ is definitely a bit congested. We just need to let it run its course.

This is great information. I know I can't go back in time to get started when rates were 2-3%. My first VA home loan was 2.25%, current one is 3%. I am definitely happy to own a good property with a solid rate and a low payment. I don't plan on giving that up. I'm trying to devise a plan to put our equity to work in this current market. If I have to wait a bit longer, so be it. But man am I motivated and wanting to get started today!

Trust me, I shake my head once a week for waiting so long in my life to start investing myself haha.
You have a really solid foundation already in place with your two homes and the ability to utilize VA benefits. I agree in keeping your current homes and tapping into the equity you have. Assuming you have at least 20% equity in them, utilizing a HELOC might be a logical move to consider.
I'm curious, are you leaning towards a strategy in investing in rentals or flips?
Overall you are definitely ahead of the curve compared to most who are just starting out, so major kudos for that. The bones are there.
That is a great question, and one that I'm not entirely sure of the answer yet. When I show people before and after pictures of our first house and our current house, their initial response is typically "holy ****" followed by "you should flip houses". But the thing is, I did these renovations slow and steady, finding good deals on supplies and only working on one project at a time and only on the projects with the most ROI. Taking on a full gut, or even just a 30 day flip where I'm just swapping flooring, painting, cleaning up the landscaping, etc. feels very stressful to me. I easily become paralyzed when multi-tasking on our house projects. But strangely I have a very hard time letting go and letting someone else do the work. I also have been reading that investors are getting crushed financially in AZ right now due to the higher rates and people not necessarily wanting to buy. I haven't researched enough to fully understand the financial or legal implications of getting stuck with a property that won't sell at my expected ARV.

All of this is to say that BRRRR feels like the right strategy. At this time I would say I'm on the fence, but my feet are hanging over the BRRRR side. On the other hand, it may be foolish not to capitalize on our renovation skills to flip a few houses, raising capital for a few rental properties. Then we go back to the original question of, how many investors are there in this market and how likely am I to actually find a good deal or have one present itself to me.

^a lot of this is me thinking out loud :)
0 Reply
Joshua Amezcua
OP
Investor · Mesa, AZ · Member since 2023 · 41 posts · 17 votes
3y
Quote from @Ryan Thomson:

Look up the "frequency illusion"!
The Baader-Meinhof phenomenon, also known as the frequency illusion, is a cognitive bias that causes people to see something they've just noticed everywhere.

I didn't know this was a thing, but it's definitely something I understand and experience often in my life. I was a background actor in Hollywood for 6 months after graduating high school. That career has absolutely ruined movies for me. My brain notices a prop or a person, then magically watch those things teleport around the set in subsequent shots. I can't even watch movies normally anymore.

I have also experienced it in every side hustle I've ever had. Imagine me learning about Amazon arbitrage, thinking I'll just walk into Target, Kohls, or Home Depot finding items that are on sale in my store and selling for more money on Amazon, just to see 25 other people each day with their phones out on the same apps looking at the same products!
1 Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
3y
@Joshua Amezcua
BRRRR is great, at the moment though BRRRR is more of an equity strategy than a cash flow strategy.
2 Reply
Joshua Amezcua
OP
Investor · Mesa, AZ · Member since 2023 · 41 posts · 17 votes
3y
Quote from @Nicholas L.:

@Joshua Amezcua
BRRRR is great, at the moment though BRRRR is more of an equity strategy than a cash flow strategy.

I hear that and I completely agree. Running numbers 10+ times a day I can see that cash flow, especially in AZ, is almost entirely out of the picture unless I do a full gut or get a great off market deal.
2 Reply
Josh YoungPro Member
Rental Property Investor / REALTOR® / Property Manager · Gilbert, AZ · Member since 2023 · 384 posts · 421 votes
3y
@Joshua Amezcua there are lots of investors, but that doesn't mean you are in competition with all of us/them. I would focus more on the market and remember that high tide rises all ships. Also, it sounds like you have a strategy already, don't switch to BRRR or 30 day flips, just keep doing live in flips, so you can be patient doing the work yourself and get owner occupied financing.
[email protected]802-274-8121
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