Large institutional investors cause for worry or not?

Question

Interested to hear others thoughts on this topic…

As a handyman I have been working largely with many real estate investment firms getting their homes rent ready for their future tenants. Doing this I am seeing them purchase hundreds of single family properties around my city Charlotte NC. As a handyman it’s great for business but as a future wannabe investor this worries me. With already low supplies of housing nationwide, how difficult is it going to become for smaller/rookie investors to get into the real estate market competing against home buyers and large investment firms? Also how may this affect experienced investors?

Paul Marthaler · Answer

I've been in the CLT market for 15 years and Wall Street $ is turning markets across the country on end.  They've been driving up prices of properties higher than if they weren't involved which is bad if you want to invest and/or buy to live in.  On the flip side, they seem to be also setting the bar quite high for rent so investor can make more $.  I don't think their impact is healthy for the market and I'm sitting on the sidelines the next year to see how things shake out.  In many areas of CLT you're looking at dropping $330K-$350K just to secure a SFR and it's a bit hard to make the #'s work based on the rents the market can afford.  I'd recommend saving up a chunk of $ and look for off market deals or fixer uppers. Most investors lose in the bidding war; just stick to a minimum ROI you want, don't forget to factor in repairs and long term cap improvements/repairs and go from there.  There's a lot of people on BP saying there's always a good time to buy investment property.  I ignore their advise.  Don't fall into the trap of FOMO. There will be a time, but recommend not risking it for now.