Article by:
Hank Miller
“We’re like roaches; when it’s good we eat, when it’s bad we feast”. My long time friend Rob dropped that pearl a good 25 years ago. He successfully flipped homes around Atlanta before it was a “thing”, through the crash, and a good decade after. Flipping homes in Atlanta is for apex predators, it's the majors in every way. Rookies and HGTV Rangers are prey, few people understand just how difficult it is to be successful flipping homes. "Investors” are vilified, especially by the MSM who blame them for anything and everything that ails the housing market. It’s a disingenuous and lazy take, regularly taken out of context. As for "Wall Street", if they didn't gorge during the crash, we'd still be awash in listings and things would be much different. They cleaned up the calamity - and you could argue they caused it but that's another conversation.
For the most part, investors compete with other investors for inventory. The “normal” buyer isn’t chasing homes in need of major repair, subject to various obsolescence, or those in “transitioning” areas. Reasons vary; most buyers don’t want / can't financially handle projects, but many lenders will not allow for that. FHA and VA have strict lending and appraisal requirements. Conventional lenders might be more lenient but “project” homes often fail to make the cut. Buyers with the cash and or gumption to do work are infrequent of late, "sweat equity" is out of style in the current, instant gratification society.
The vast majority of “investors” are not corporate giants, they are Mom and Pop owners. Most have fewer than ten homes, self manage, and must be very deliberate when selecting homes to chase. Math is the basis of every decision, there is no room for emotion. Most consider real estate investing for diversification and additional income. Those doing it for a living are the true professionals. There are three main options for investors. Read more...
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