The worst case scenario is that your chosen market turns out to be an absolute dog with fleas and never produces a single lead or result. Pack up shop with what you've learned and move to another market, knowing how to go about fixing the problem, and do well from there.
When buying wholesale houses, keep this and the following keys in mind:
1. If at all possible, look for wholesale real estate in your own backyard first.
This is a good rule to follow unless you already know right off the bat that it's a bad start. Why?
• You know what area of town the wholesale houses are in
• You can get in the car and go look at the wholesale houses
• You know what type of area it is, whether there's gang activity or in a beautiful area of town
• You may have access to realtors, photographers, etc, making things easier for you
2. Don't let preconceived notions deter you from a particular wholesale real estate market.
Just because you wouldn't buy in a particular area doesn't mean that someone else wouldn't buy in that area.
3. Gather as much data as possible.
Let the experts in the field give you data telling you whether a particular wholesale real estate market is good or not. Mortgage lenders, for example, have many statistics saying which markets are going up, down, sideways or any other way. If you're looking at a real estate market and the mortgage lender says, "We refuse to give a 100% loan", you might want to think twice about investing in that market.
Mortgage insurers are another place to find good data on a particular wholesale real estate market. They're very good at watching the mortgage and market trends. If a mortgage insurer says, "I wouldn't invest or insure there", again, you might want to think about the possibility of looking elsewhere.
4. If you're going to invest in a particular wholesale real estate market, make sure that the trend over the last twelve to eighteen months is flat, slightly increasing or slightly falling.
Rising or falling by more than 5% in the last twelve months is a good indication that your chosen real estate market is volatile – very heavily and highly challenged. Think about it before investing in those types of markets.
Investing in a market and buying wholesale houses can be a tricky situation; you may feel like you're walking a tight rope. However, following these four keys when picking your wholesale real estate market can help make all the difference on whether you succeed or fail.
Written by VirtualWholesaling.com. Copyright 2008. All rights reserved.