Wholesaling Homes: Capitalizing on the Surge in U.S. Investment
The U.S. is set to become the world’s top real estate investment destination in 2013. However, in order to cash in on this surge in demand and massive influx of capital those wholesaling homes must understand how to best serve foreign investors.
According to recent surveys, the most active international investors and investment institutions place the U.S. as their top choice for investing in 2013.
Previously popular destinations from the last few years are quickly losing their appeal and no longer offer what today’s real estate investors need the most.
Leading foreign destinations like London, Paris, Hong Kong and Canada – which were, until recently, delivering attractive returns and were regarded as safe havens for protecting wealth – have turned on the investment community. Unfortunately a chain of government moves to limit foreign investment in these old hot spots, such as high tax levies on luxury homes has begun to cool them rapidly. As we all know and have seen again and again, soft landings are virtually impossible to arrange in the real estate market. When you cut the engines, there is an inevitable crash.
This is forcing international real estate investors to snap to attention and get ready to act to protect their wealth. Protecting capital may be the most critical primary priority for all investors. However, just stuffing money under the mattress isn’t the answer either. Every individual needs to be achieving a reasonable amount of return and many absolutely need regular income too.
The U.S. is attracting this surge in attention and capital primarily because of the current position in the housing cycle. Those tuned in to wholesaling homes already know that most of the country has already hit bottom and is climbing back again. According to historical housing cycles that puts us on an upward trend for the next 10 to 15 years. Of course, in the meantime, while investors pile on equity, the cash flow spreads from rentals are great, delivering superior yields.
Of course wholesalers and buy to hold investors are often completely different breeds and we need both. For those wholesaling homes, this is a perfect marriage. Affluent buy to hold investors don’t want the hassle of prospecting for homes, negotiating or finding tenants. They just want them served up on a platter and to run and they don’t mind paying for that.
That’s a great match for what those wholesaling homes do best. As a wholesaler, you find the deals and turn them over to long term landlords and let them deal with the management, while taking a nice ‘finder’s fee.’
However, this doesn’t just mean you can stick to business as normal. In order to cash in on this opportunity and the wave of incoming foreign investors, those wholesaling homes must tailor their product correctly.
At the most basic, this means picking the right homes in the right areas and making sure the numbers work for the end investor. Those who are really serious about conquering this niche will tailor and target their marketing well and reach out to set up overseas referral partners.
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