Learn How to Evaluate Neighborhoods to Wholesale Real Estate
Lower Class Income Neighborhoods
Lower income neighborhoods are best suited for wholesale flips to your buy and hold investors. Buy and hold investors are real estate investors who rent their properties out generating a positive cash flow each month building long term wealth through cash flow and appreciation. With the majority of the properties in low income neighborhoods being rental properties that are owned by other real estate investors, your best option is to control theses houses with the intent to flip them to these buy and hold real estate investors. These areas are fueled by some specific anchor establishments including hospitals, schools, shopping centers, and public transportation.
Middle Class Income Neighborhoods
When you invest in middle class income neighborhoods, your investing options change as you are able to continue wholesaling real estate. You can give your end buyers several exit strategies in these neighborhoods that will work; form buy and hold, renovate & rent, rent to own, or fix and flip. These areas differ from low income areas as the ratio of homeowners to renters increases.
Upper Class Income Neighborhoods
In higher income areas, there can be sometimes one renter to every four homeowners depending on the marketplace. The best exit strategy for your investor cash buyers as a real estate wholesaler in these neighborhoods is to rehab and retail the property. You are not going to find a lot of motivated sellers in these areas because of the income levels and most of these properties hardly ever come onto the market. In my marketplace most of these properties are passed down from generation to generation. But don’t let these neighborhoods scare you off if you do come across a motivated seller which will happen, if your in this for the long haul. And when you do come across one of these properties that are owned by a motivated seller make plans for a BIG PAY DAY!
Learn Your Marketplace Inside & Out
As a wholesale real estate investor you need to be very observant and know what’s going on in certain neighborhoods. You can do this by reading newspapers, surfing the internet, visiting your local planning offices and going to your local REIA (real estate investor association) meetings. You want to be in the know of the developments that are in the works, what the crime rate is like and if prices are going up or down. It may take some time to learn and be comfortable with your marketplace depending on the size of it. But once you do it will become very beneficial to you and your business.
I”ll See you at the closing table,
Marcel Umphery the “R.E.I. Successmaker”