Investing In Urban Areas

Author: Darral Simmons

SMART WHOLESALE INVESTING
Investing in urban areas of your city is a smart real estate investment. Most cities are rehabbing their urban areas. With gasoline prices at over $3.00 a gallon, developers and cities are pouring money into redeveloping urban cores. Urban areas are close to the city so driving distance is cut down and the older housing is well built quality housing.

SUPPLY OF BUYERS
People are moving back to the urban centers of their cities to be closer to their jobs. The future is in urban developments. Developers are building supermarkets, retail stores and restaurants in these areas so that you can live and work and not have to leave the area. There are a lot of buyers and investors who are interested in buying urban real estate properties. Lofts are increasingly popular. Wholesalers are rehabbing urban properties and adding them to their portfolios because there is a large pool of buyers and tenants who want to live in these types of properties.

WHOLESALERS IN CHARGE
I believe in the future that wholesalers will be the majority in charge of the real estate industry. The reason is that a large majority of people are not being responsible with home ownership. There is a great opportunity for wholesale investors to earn income buying and selling rental real estate in urban areas.

CHANGE YOUR MINDSET
A key to successful wholesale real estate investing is not to look at properties that you want to live in and fix up with granite and whatever else. You want to buy low and sell high. Start with median price homes. They are easier to flip and there is a greater pool of investors and buyers that you can market to. You can always move up to higher end properties later if you want. Keep in mind that higher priced properties are going to sit on the market longer because there is not enough investors that deal in fast flipping of those types of real estate properties.

THREE BEDROOM HOMES
From my years of experience wholesaling real estate three bedroom, two bath homes is the best investment. They are easiest to sell. Traditionally, two bedroom, two bath or one bath properties are more difficult to sell because there is not enough square footage. Consider a two bedroom one bath that can somehow be converted to a three bedroom, two bath as a good commodity also. What we call these types of properties is investment grade homes.
However, during the last 5 years, I have had some success wholesaling two bedroom homes because many single first time buyers have purchased these types of properties for investment and to live in.

KNOW THE VALUE OF YOUR INVESTMENT
It is important to know the wholesale value of any real estate investment that you make. Run your numbers, do your homework. A lot of information on sales of comparable properties and rentals can be obtained for the local MLS or your Realtor or other programs. Having the right information and being able to analyze and project is the key to your success. Decide before you invest whether you will rehap the property to flip it or whether you will hold on to your investment, letting it appreciate and receive a positive cash flow from your rental income. Buy smart, this is a business. Keep your emotions out of play.