New to Real Estate 路 Ogden 路 Member since 2014 路 107 posts 路 19 votes
I see so many motivated sellers from small towns but I know finding a buyer would be difficult. Where are the best places to wholesale besides obvious Daytona, del ray beach Florida, st Louis MO, OH, AZ, ETC.
What are the options, if any, with these small town deals? Any input is appreciated馃檰
Investor, Entrepreneur, Educator 路 Springfield, MO 路 Member since 2009 路 21k+ posts 路 12k+ votes
11y
OMG, another coach........
Good question as to population.
Demographics effects value and marketing time.
Consider a larger area, is the small town a bedroom community of a larger city, or is it miles away having to survive on its own population?
Go to the courthouse and ask at the Recorder's Office how many deeds were filed last year and year to date in that town. If they say 185 and 121, as an investor, I'd run! You have a very inefficient market.
Prices will reflect that, but buying dirt cheap means selling dirt cheap in a small town that isn't "related" to a larger market.
Study real estate basics, location, market influences, inventory turn over, economic factors that effect value. If you can't define the market you can't define the price.
Finding cash buyers can be rather irrelevant, a cash buyer in a very inefficient market will most often require a lower price. Small town transactions are loaded with seller financed deals to improve marketability, but that doesn't ad value to a property. Why tie up your money in an inefficient market?
Also consider the rental market, that is most likely going to be your activity. What demographics do you have there? Stable employment, rental inventory, what is the utility of the property? Population increasing or decreasing? Is the town near broke or is it in good financial shape? Is it dependent on one industry or is the economic base diversified?
That's why investing in larger areas, such as you named, are a better investment. Real estate is an inefficient market compared to other financial investments, but even in an inefficient market place you need the most efficiency or activity that you can find.
Understanding the basics will answer most of your questions. :)
Investor, Entrepreneur, Educator 路 Springfield, MO 路 Member since 2009 路 21k+ posts 路 12k+ votes
11y
OMG, another coach........
Good question as to population.
Demographics effects value and marketing time.
Consider a larger area, is the small town a bedroom community of a larger city, or is it miles away having to survive on its own population?
Go to the courthouse and ask at the Recorder's Office how many deeds were filed last year and year to date in that town. If they say 185 and 121, as an investor, I'd run! You have a very inefficient market.
Prices will reflect that, but buying dirt cheap means selling dirt cheap in a small town that isn't "related" to a larger market.
Study real estate basics, location, market influences, inventory turn over, economic factors that effect value. If you can't define the market you can't define the price.
Finding cash buyers can be rather irrelevant, a cash buyer in a very inefficient market will most often require a lower price. Small town transactions are loaded with seller financed deals to improve marketability, but that doesn't ad value to a property. Why tie up your money in an inefficient market?
Also consider the rental market, that is most likely going to be your activity. What demographics do you have there? Stable employment, rental inventory, what is the utility of the property? Population increasing or decreasing? Is the town near broke or is it in good financial shape? Is it dependent on one industry or is the economic base diversified?
That's why investing in larger areas, such as you named, are a better investment. Real estate is an inefficient market compared to other financial investments, but even in an inefficient market place you need the most efficiency or activity that you can find.
Understanding the basics will answer most of your questions. :)
Broker 路 Logan, UT 路 Member since 2013 路 1k+ posts 路 1k+ votes
11y
I've had some success buying in rural Utah (towns with under 25 sales per year).
I sell them through lease/options. What I've found is that there is a tiny tenant pool that wants to be close to family, etc and have no rental options. They got hit with divorces or are returning from a failed attempt living somewhere else. They tend to be very long-term tenants if they don't perform and are frequently interested in buying. Vacancies can be months.
The key is the properties must be very cheap. Your after repair cost should be less than 60% of "market" (whatever that is). And your exit should include longer term financing taken out by an optionee. This will be years.
I have not tried to package these because, even though the numbers are pretty good, there isn't a very big market for investors looking at cash flowing properties in the sticks.
And there's a big difference between small towns in Utah, but most tend to be driven by agriculture.