To be successful in this business you have to constantly stay in touch with what your market is doing. And since all markets are local, that doesn’t mean watching the national news and hearing what some expert says about the U.S. housing market, you need to know exactly what’s going on in your local market right down to the zip code.
With that being said, what I’m about to share with you is what is working in my market in Northern Virginia and what I know is similarly working with other investors around the country.
First off, wholesaling is still very difficult to do. I realize all the gurus still tell you that you can flip properties overnight and make a cool $20,000, but the chances of that happening are very slim. You can wholesale deals between $5,000-$10,000 but the frequency and opportunity is nowhere close to where it was when the market was hot.
Here’s what you should do…
If you happen to be a brand new investor who was planning on making your millions from wholesaling I would make sure you also learn other methods of doing deals. The methods that I would learn are lease options and subject-to, if I were you.
Since the economy is still depressed, there are a lot of sellers out there who are interested in doing a lease option or subject-to deal. There are also a ton of landlords who are sick of the rental properties they picked up a few years ago and a few of them have enough equity worth doing a deal. (Not many, but they are out there.)
If you can pick up these properties I would plan on holding them for the long term. I wouldn’t try to “flip” any sub-2 deals, I would plan on buying quality rental properties and holding them for the next 10 years, if not forever.
After all, everyone knows that true wealth is made by owning rental properties.
You can never go wrong buying a good house in a good neighborhood with positive cash flow. I know several investors who have consistently bought rental properties over the years… paid off the mortgages… and now own 60, 80, over 100 houses free and clear.
The bottom line is, real estate prices in my area and in most of the country are depressed and houses are being sold at bargain prices. If you can pick up several rental properties that you don’t sell for a long time… then in my opinion that’s the best way to build wealth today.
Of course, you can do the occasional wholesale deal when it comes along, but if you’re serious about getting rich, you’ll think long term and start making plans of how many houses you want to own free and clear one day… and… you’ll become an expert on lease option and sub-2 deals as soon as possible.