Some real estate investors have been getting frustrated with an immense amount of competitions from private equity firms and giant bulk buyers scooping up masses of distressed properties, while others are loving it and are still making plenty of money from real estate investing.
4 Reasons to Hug One of These Competitors Today
1. They Are Fun to Play With at Auctions
Few real estate investors make their money at public foreclosure auctions today and the competition has definitely grown stiffer with reps from big buyers showing up armed with bundles of checks and spending millions. Often they will out bid everyone else and wind up far overpaying what they should. While solo real estate investors should avoid being baited into bad habits like these it can be tons of fun to go and make these buyers sweat and overpay. Thank them for the entertainment.
2. Thanks for Pumping up Home Prices
Home prices in markets like Phoenix and Atlanta which are so popular with these big firms are seeing home values shoot up by high double digits. This means boosting profit margins for all and piling on equity to the personal residences of investors too. This deserves a really big bear hug.
3. Thanks for Making Your Returns Look Even Better
Most of the big players are severely encumbered by structure, layers of decision making and ridiculously high overhead. This kills their net returns. This makes the returns wholesalers can offer private mortgage lenders and turnkey real estate investors way more attractive.
4. Thanks for Biting the Bullet on Those Ugly Houses
While it appears some bulk buyers are doing more due diligence they are also certainly eating it big time by acquiring hundreds of dead beat homes which will become dead weight, dragging down over all returns, many of which will have to be turned around and sold, perhaps sometimes even at a loss. This is great for the little guy and every one of these properties rehabbed brings up the value of neighborhoods, increasing the value of the holdings of other investors too.
You don?t need a trunk full of checks to compete. With easy access to transactional funding and hard money lenders making a comeback and begging for investors to borrow you have access to all the cash you need. You don?t even need to go head to head at auctions or over REOs with them either. There are other and today perhaps better ways to find real deals, a lot easier.
So get out and hug one of these private equity firms? reps today ? then go out and make a killing with a smile?
Source: http://www.cthomesllc.com/2012/10/real-estate-investors-why-hug-a-hedge-fund-buyer-today/
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