Does wholesaling exist in Loudoun County?

Question

Hey BP family, I am wondering if anyone in the Loudoun County area is actively wholesaling in our specific area? If so, how many deals a month or year are you doing? Is any town better than the other (Sterling, Ashburn, Leesburg, Purcellville, Hamilton, etc.) What marketing strategy has worked best for you? Is it even possible in our county? How far outside of the county do you wholesale properties (winchester or eastern WV panhandle)? I want to raise capital in order to not touch my savings. It would also provide me a way to learn how to find a deal and work with other investors.

Russell Brazil · Answer

If anyone is getting wholesale deals out there it would probably be @Andrew Michael...but its by no means a hot bed of wholesaling activity. Loudon County is the richest county in the entire nation as measured by median household income....so not a lot of people in distressed situations there.

Russell Brazil · Answer

@William Brown Very desirable areas with higher price points like Loudon Co, Fairfax Co, Montgomery Co typically lend themselves to lower profits in terms of flips, as well as lower cash on cash returns for rentals. The reason for that is that the price point on lower end homes gets pushed up higher due to high demand to be in good school districts. So that spread between a non-rehabbed home and a rehabbed home shrinks or even becomes non-existent.  You will find better returns for flips, and cash on cash buy and holds in say PG county, where the non-rehabbed homes sell for considerably cheaper than the rehabbed homes. Gentryfying neighborhoods in DC offer large price spreads as well.

Though if you are a long term buy and hold investor who is more concerned with your total return, or internal rate of return, those high income counties will typically have higher IRR's, as the demand remains high over a long timeline pushing prices up higher and higher over time.  Median priced homes and below more so, and those above the median price and above the conventional loan limits less so, as they have a more restricted pool of buyers.

Andrew Michael · Answer

@Russell Brazil Thanks for the shout.

@Christopher Nerio As Russell said, very far and few between out there.  Mostly due to the fact we do not actively market out there.  If you are interested in that area give it a try.  You will not have as much competition as you would say in DC.  The flip side is that there will not be as many buyers either.

For marketing I still think direct mail and cold calling are best.  As I always say, all marketing attempts are worthless unless you have an adequate system in place to process, vet, and follow up with them.

Andrew Michael · Answer

@Christopher Nerio

I do not have much experience in those areas so it would be misleading for me to give you advice one way or another.

I assume it is the lower price points that are attracting you to the areas you mentioned, is that correct?  It has been my experience that wholesalers/ investors in those areas come and go quite often.  I think people are attracted to the low entry points but later realize the low prices and weaker economies are for a reason.

In areas like you mentioned you can go on the MLS and still find discounted properties fairly easily.  This makes for a challenging wholesale environment.

Since you are familiar with Leesburg I would start there and work your way towards DC rather then further out.  Just my opinion though.

Christopher Nerio · Answer

Thanks @Russell Brazil and Andrew, I figured so, like you said not too many people in distressed situations. @Andrew Michael what about Winchester or the eastern panhandle of WV like Charles Town, Jefferson County area?

Does wholesaling exist in Loudoun County?

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