INVENTORY! Where are you?!

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INVENTORY! Where are you?!

Drew Nashmy
Investor · Wilmington, NC · Member since 2017 · 44 posts · 16 votes

I apologize in advance if I am beating a dead horse, but . . . . where is the inventory?~! And what are you doing about it? 

In my local market, things have completely dried up on inventory for possible fix and flips. What is available is easily 25-33% HIGHER priced than I am comfortable with. Does this mean that I will reap the benefit of that on the backside as well? Maybe, but there are so many factors that can affect that that are out of my control. 

Went to the courthouse this Monday in search of a property. My team and I had calculated our max bid to be $85k. It slowly inched it way there, and I continued to bid until about $92k. Minutes later, it sold for $122k! 

Are you seeing this problem as well? What are you doing about it? Any ideas on how to be creative? I am actually thinking about purchasing land to do new houses . . .

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Seth WilcockBusiness Member
Lender · Nashville, IN · Member since 2016 · 138 posts · 84 votes
5y

With interest rates where they're at, people are going to stay in their homes longer, which will ultimately continue to add to the inventory shortage and drive values higher.  If someone bought their home years ago, that means they were able to buy before seeing appreciation levels take off.  With interest rates dropping many are taking advantage of refinancing to get a lower payment.  Let's say interest rates go up to the high 3's and low 4's in the next few years.  It will be tough for a homeowner to want to sell their house and move into a higher payment that could easily be double what they are used to.  Sellers will need large enough motivation to want to sell & buy in a higher interest rate environment where homes are more expensive.  I don't see home price appreciation slowing down, especially as more and more millenials enter into the first time home buyer market.  We'll see first time home buyer numbers increase exponentially as millennials start having kids and start looking for homes in good school districts.

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  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    5y

    In Portland, that's the number one driver of appreciation, no inventory.

    Potential sellers are afraid they can't find a replacement.

    1Reply
  • Nicole Heasley Beitenman
    Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
    5y

    We're having the same problem. To kill time, we're selling off poor performers and continuing to build cash reserves. 

    5Reply
  • Seth WilcockBusiness Member
    Lender · Nashville, IN · Member since 2016 · 138 posts · 84 votes
    5y

    With interest rates where they're at, people are going to stay in their homes longer, which will ultimately continue to add to the inventory shortage and drive values higher.  If someone bought their home years ago, that means they were able to buy before seeing appreciation levels take off.  With interest rates dropping many are taking advantage of refinancing to get a lower payment.  Let's say interest rates go up to the high 3's and low 4's in the next few years.  It will be tough for a homeowner to want to sell their house and move into a higher payment that could easily be double what they are used to.  Sellers will need large enough motivation to want to sell & buy in a higher interest rate environment where homes are more expensive.  I don't see home price appreciation slowing down, especially as more and more millenials enter into the first time home buyer market.  We'll see first time home buyer numbers increase exponentially as millennials start having kids and start looking for homes in good school districts.

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  • Jason Norton
    Specialist · Huntsville, AL · Member since 2020 · 96 posts · 35 votes
    5y

    @Drew Nashmy

    Are you willing to think outside of the box of where you are and do a fix and flip or some type of resale property multi family units otherwise in a different area?

    2Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    5y

    Whoa. If there's no inventory in OH, we're all screwed. If looking. 

    Maybe all the scale to 200 units in 24 months talk is working.  Not everybody can own that many and the new people not feel the pinch.

    I'm thinking of selling more and reducing my inventory.  Just need a better process. The status quo of hire an agent and have random people and brokers tramp through sucks, especially if exchanging. 

    3Reply
  • Brian Buckingham
    Member since 2018 · 10 posts · 2 votes
    5y

    I thought I saw Inventory standing in line at the planning and Development office with its piggy bank shelling over its last quarter hoping that the wetland study comes back with good news before it goes bust.

    1Reply
  • Jaquetta T Ragland
    Real Estate Agent · Winston Salem, NC · Member since 2014 · 486 posts · 303 votes
    5y

    @Drew Nashmy yes I recently bidded on a property expecting it to go to $85k max and it went to $193k. It was a house in NC. I guess it was someone wanting a home and not an investor. It was ridiculous.

    3Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    5y

    @Drew Nashmy similarly here in Columbus OH it seems as though inventory is flying off the market. When something hits, its like a mad house to see it, even if its not priced "to sell". 

    Though I am cold calling about 100 people a day to try and source off market deals. So far ive been able to put 5 in contract with very little competition.

    5Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Steven Foster Wilson:

    @Drew Nashmy similarly here in Columbus OH it seems as though inventory is flying off the market. When something hits, its like a mad house to see it, even if its not priced "to sell". 

    Though I am cold calling about 100 people a day to try and source off market deals. So far ive been able to put 5 in contract with very little competition.

     Yeah off-market deals are where it is at. Another thing that I have found that works in Columbus, Ohio is creating a list of Realtors, Wholesalers, Contractors, Property Managers, etc. and texting them every two weeks. While you cannot make as much commission on these deals I find they are easier to put together and the volume is greater than working with sellers directly.

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  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    5y

    Plenty of inventory here in Tolèdo.

    2Reply
  • Drew Nashmy
    OP
    Investor · Wilmington, NC · Member since 2017 · 44 posts · 16 votes
    5y
    Originally posted by @Jason Norton:

    @Drew Nashmy

    Are you willing to think outside of the box of where you are and do a fix and flip or some type of resale property multi family units otherwise in a different area?

    Absolutely. I have put feelers out in NC, GA and AZ at this point. Trying to come up with an overall plan here. One item I am considering is actually developing, though I have never done that. 

    0Reply
  • Drew Nashmy
    OP
    Investor · Wilmington, NC · Member since 2017 · 44 posts · 16 votes
    5y
    Originally posted by @Brian Buckingham:

    I thought I saw Inventory standing in line at the planning and Development office with its piggy bank shelling over its last quarter hoping that the wetland study comes back with good news before it goes bust.

    Hopefully that study comes back with good news!

    1Reply
  • Drew Nashmy
    OP
    Investor · Wilmington, NC · Member since 2017 · 44 posts · 16 votes
    5y
    Originally posted by @Account Closed:

    Plenty of inventory here in Tolèdo.

     Toledo is not terribly far at all. . . Might have to start a search there. 

    0Reply
  • Drew Nashmy
    OP
    Investor · Wilmington, NC · Member since 2017 · 44 posts · 16 votes
    5y
    Originally posted by @Steven Foster Wilson:

    @Drew Nashmy similarly here in Columbus OH it seems as though inventory is flying off the market. When something hits, its like a mad house to see it, even if its not priced "to sell". 

    Though I am cold calling about 100 people a day to try and source off market deals. So far ive been able to put 5 in contract with very little competition.

    Glad to hear you have a strategy that is still working for you. Although I have heard of that before, cold calling for houses is not something I have any experience with. Love to learn more. 

    1Reply
  • Account Closed
    Rental Property Investor · Glens Falls, NY · Member since 2016 · 176 posts · 169 votes
    5y

    If you find it, let me know. 

    2Reply
  • Cheryl MackPro Member
    Real Estate Agent · Wake Forest NC · Member since 2017 · 40 posts · 26 votes
    5y

    @Michael P. yes, there is still good inventory in Toledo. But unless the property is a total dog, it sells fast. In better neighborhoods a move-in ready house can sell for over asking price due to competition.

    1Reply
  • Victor Vella
    Flipper/Rehabber · Cleveland, OH · Member since 2014 · 173 posts · 121 votes
    5y

    @Drew Nashmy

    Hey Drew let’s connect. I flip in Cleveland and couldn’t agree more. Inventory is tighter then it’s ever been.

    0Reply
  • George Munoz
    Real Estate Agent · Fort Lauderdale, FL · Member since 2018 · 360 posts · 213 votes
    5y
    Originally posted by @Steven Foster Wilson:

    @Drew Nashmy similarly here in Columbus OH it seems as though inventory is flying off the market. When something hits, its like a mad house to see it, even if its not priced "to sell". 

    Though I am cold calling about 100 people a day to try and source off market deals. So far ive been able to put 5 in contract with very little competition.

    Same As @Steve Wilson,  @Drew Nashmy , 

    This month along I closed on 4 deals (OFF MARKET) Pure cold call, follow ups on old leads and direct calls from direct mail. All of them between at a .70 and .75 multiplier of ARV.. (SUPER Hot and competitive market ) CRazy competitive, ridiculous. But is possible man. I have a very good Friend that I met here on BP @Redha Laafia, He is part time cold calling and text msg and he have gotten a few deals (is impressive what you can do with persistence and dedication ) Love that guy!  Pretty much self taught that is awesome.!!

     Is out there man , is out there!

    4Reply
  • Drew Nashmy
    OP
    Investor · Wilmington, NC · Member since 2017 · 44 posts · 16 votes
    5y
    Originally posted by @George Munoz:
    Originally posted by @Steven Foster Wilson:

    @Drew Nashmy similarly here in Columbus OH it seems as though inventory is flying off the market. When something hits, its like a mad house to see it, even if its not priced "to sell". 

    Though I am cold calling about 100 people a day to try and source off market deals. So far ive been able to put 5 in contract with very little competition.

    Same As @Steve Wilson,  @Drew Nashmy , 

    This month along I closed on 4 deals (OFF MARKET) Pure cold call, follow ups on old leads and direct calls from direct mail. All of them between at a .70 and .75 multiplier of ARV.. (SUPER Hot and competitive market ) CRazy competitive, ridiculous. But is possible man. I have a very good Friend that I met here on BP @Redha Laafia, He is part time cold calling and text msg and he have gotten a few deals (is impressive what you can do with persistence and dedication ) Love that guy!  Pretty much self taught that is awesome.!!

     Is out there man , is out there!

     George, thanks for the insight and encouragement!

    0Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Account Closed:

    Plenty of inventory here in Tolèdo.

    I've never heard of it...

    0Reply
  • Randall Weatherall
    Real Estate Agent · Memphis, TN · Member since 2019 · 261 posts · 253 votes
    5y

    Memphis seems to have a decent amount but some of these sellers (both off-market and MLS) are a little too pie-in-the-sky for a lot of my clients. We see a decent trickle of off-market units still and the MLS is pretty healthy overall, but many of the sellers of 90, 120, 150+ day-old listings are still holding out, rejecting reasonable offers, thinking they can get someone to pay their absurd number given to them by a residential agent that agreed to list it for 5% and overshot the value by 20%+.

    Welcome to 2020

    1Reply
  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    5y
    Originally posted by @Zeke Liston:
    Originally posted by @Account Closed:

    Plenty of inventory here in Tolèdo.

    I've never heard of it...

    It’s located south of Canada and north of Mexico 

    2Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Account Closed:
    Originally posted by @Zeke Liston:
    Originally posted by @Account Closed:

    Plenty of inventory here in Tolèdo.

    I've never heard of it...

    It’s located south of Canada and north of Mexico 

    Ohhhh yes, Toledo, very nice place. Houses for the same price as a used 2000 Toyota Camry.  

    0Reply
  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    5y
    Originally posted by @Zeke Liston:
    Originally posted by @Account Closed:
    Originally posted by @Zeke Liston:
    Originally posted by @Account Closed:

    Plenty of inventory here in Tolèdo.

    I've never heard of it...

    It’s located south of Canada and north of Mexico 

    Ohhhh yes, Toledo, very nice place. Houses for the same price as a used 2000 Toyota Camry.  

    It’s all supply and demand. If I remember college correctly that means Toledo has a very high demand. 

    2Reply
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