I'm in the Greenville SC market and this is an aggressive market with so many people migrating to the area from the northern and western US.
I'm eager to get into fix-and-flips and I have some amount of capital to invest, however, the analysis' that I've done on potential deals in this area just don't make sense to me, for the following reasons:
-Fixer-uppers are selling for big dollars (we're in a bubble at the moment), compared to prices pre-pandemic. They are selling at high dollars through all channels: MLS, auctions, off-market, etc. It's very aggressive.
-Given the comps on these properties and the cost to rehab, I can't figure out how investors are making money unless they are operating on razor-thin margins with high risk. Perhaps they are pursuing a different strategy that might yield more, however, even then I'd think it would be tight and risky.
-I suspect we're at the top of the bubble right now, though since we haven't seen a building boom I suspect it will last quite a bit longer. People coming here need a place to live and so if the inventory isn't there yet, I would suspect the bubble will last a while longer even if prices don't continue to increase.
I've thought about trying to get into the guerrilla marketing game instead, however, that's a crowded market around here as well since the real money is finding the deals and wholesaling them at the high prices available these days and there are companies in this area that have been full-stride in that game for 10-15 years already and so competing with them could be effort better placed elsewhere. I'd prefer to do the fix-and-flips so this was a passing consideration anyway.
So, the magic and common question so many others have asked is does anyone have any advice regarding how to jump into this game in this kind of market? I desire to get my first deal done and learn from it and move on, but I don't know what I don't know. Some might suggest I just pull the trigger, however, analysis paralysis isn't my issue since I'll jump the moment I see a good deal - my challenge is I just don't see what I would call good deals in this market right now.
Anyone with suggestions or insight regarding how you might have overcome this barrier in your past? I'm receptive to thinking differently, so listen I will!
You are really answering your own question. You explained all of the reasons that Greenville is at an all-time high right now and flooded with investors. Do you want to pay up to join the herd or focus on areas adjacent or farther out, or other markets, until your hometown calms down? When a market is steaming hot on price and supply is low, it's a terrible time to start investing unless you have your own lead flow that can get to owners who don't look at their rising Zestimate every day.
I appreciate the response, Jonathan. That helps to validate I'm not missing anything obvious and it might be best to not try and swim with the sharks, but better to look for calmer waters.