The Biggest Challenge for Real Estate Investors Ahead
All indicators and statistics point to 2013 being a record year for U.S. real estate. Home prices are going up, home sales and even pending sales are increasing and homes are selling faster. So where will real estate investors run into the biggest challenges ahead? One of the biggest roadblocks to flipping more houses in the last few years was finding enough home buyers to fuel all of the volume investors wanted to do. With increased confidence in the market today and interest rates remaining low everyone wants to upgrade or buy a home if the can. Plus, with huge demand for rentals and increasing appetite for U.S. housing from overseas buyers there is no shortage of buyers in most areas. Many have pointed to mortgages as the one missing piece of the puzzle from a full on real estate boom. However, even lending is easing for many borrowers. Perhaps not for the bulk of the public, but definitely for more affluent home buyers and real estate investors looking for short term funding as well as financing commercial properties. Most also expect lending to continue to ease as banks become more confident in the housing market and compete against each other for originations. So if buyers and financing aren’t the biggest challenges in 2013, that leaves finding deals. At least in terms of flipping a high volume of homes. Everyone wants in, yet wholesalers and rehabbers more than anyone need to continue to lockdown undervalued deals. Fortunately there are many other options besides direct mail to struggling homeowners or attending foreclosure auctions. Instead or at least in addition to the above consider acquiring REOs and discounted properties from credit unions and corporate asset managers, look for opportunities to take down properties as non-performing notes and embrace the new mobile marketplace.
What’s the biggest challenge facing real estate investors in the next 12 months?