How to Leverage Change in Housing Market | Housing Market Crash Is Here
Tend to be a wholesaler fixing flipper as well as a buy and hold. You just need to run your numbers correctly. And if you do that, then you’re gonna get deals then you’re gonna be able to make money
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Yo, yo, what is up everybody? Welcome back to the science of flipping podcast. I’m your host, Justin Colby. And this episode is coming right off me speaking in front of several 100 rentalpreneur investors. These are individuals that are focusing on buying rentals in today’s real estate economy. And so I have a lot to talk about. But it was an incredible event in Houston, Texas, by TJ to Johnny. Now, as always, these episodes are brought to you by Minutepages.com if you are a real estate investor, whether you’re flipping whether you’re wholesaling, maybe you’re even buying for your portfolio, make sure you have a website that gives you credibility, influence and authority in this space, go to minutepages.com and get your website now at a fraction of the cost. Okay, so I get asked the question, How am I changing my business model as we are going through some little correction in the real estate market. Now I was able to speak at this event, which is incredible. There were several 100 people in the room. And it was like energy, everyone was on point because I wanted to know what to be doing moving forward. So after I got off stage, I answered, you know, several questions, and a lot of them had to do with what markets Am I am where am I buying? Why am I buying? And why does it make sense? Now as we are experiencing some of this correction? Well, so let me answer this for you as well. If you aren’t just a wholesaler, and maybe you’re not even buying and holding the way I am, I would encourage you to think through who your buyers are. Okay. So this answer really is going to be the same for a wholesaler, it’s going to be the same for someone buying and holding and potentially even fixing, flipping. My answer is essentially, I really love the sunbelt states, right? So it goes basically all the way from North Carolina all the way kind of down south through the country going into parts of Texas in Nevada. But the reason why I love that that type of market is the price point. So my answer always came back to math, every single person I said is just math, if I understand what I can buy the home for and be all into the into the home with. And then I can get a 1% Rent ratio and have a decent cash on cash return. I like that as a rental. Now, how does this affect wholesalers? Well, you need to know buyers like myself how we buy? What’s our criteria? How are we changing it during some of these economic times? Are we changing it during these economic times? So for those of you that are out there actively marketing in more in the wholesale space, I would really urge you to stay into price points under $300,000.
That’s one thing I’ve preached to my students over and over again, is all my students, I tell them stay in 30% under the median market value, meaning right now the national median market values give or take $400,000. Well, I want to be in markets that are 30% under that price point, right. So as I told you, you know, North Carolina, I love it, Charlotte, I could buy homes for 120 $150,000 as rentals. That’s perfect. I’m looking at a four Plex in Killeen, Texas right now, for $170,000. That would be perfect. Those numbers allow you to buy and hold. Now, is that a good number for fix and flip? Well, that’s just a different model, because I’m not looking for the big margin in between. In fact, on some of these, I might even be paying close to retail. But I’m okay with that. Because it’s for the long term. And it’s not for quick cash or quick pops. So you need to know who are your buyers as a wholesaler, what are they buying for? And how are they you know, looking to exit. And then for all of you out there, if you’re trying to figure out what market you should be in whether you’re wholesaling, flipping, buying and holding. My first and foremost is I want to be 30%, under median price point, then I want to make sure it’s a good market. Is it a market that has potential for growth? Are there military bases? Are there sports teams? Is it in a place where there’s going to be an economy, right? And so those are things, small things, but things that really are important to me in terms of are there major colleges in the area? You know, because then the smartest people in the world have gone out to try to build, you know, universities, sports teams, military bases, these are places that they feel will have expansion and growth and there’s a viability in terms of economy. Those are real telltale signs of why I like to be in certain markets. And then it just comes back down to math. If I can spreadsheet it and it looks like I can have 1% right ratio.
That’s where I want to be. So if you’re trying to figure out what you need to be doing where you need to be doing it, I would really encourage you to maybe think outside out the box be a little bit more dynamic of doing it in your own backyard, you might be listening to this and you might be in San Francisco or San Diego or New York or Miami or some really expensive markets, well, I would encourage you to get a little bit more virtual, right, get a little more outside the box, I call it being dynamic and, you know, not being, you know, beholden to whatever your market might be telling you. Your market might be a great market for fixing, flipping, but maybe not buying and holding. So now if you are a wholesaler in that market, you’re really only going to be able to sell to the fix and flippers, Well, right now we can see that some fix and flippers are kind of being a little more short armed, they’re not being as aggressive at how much they’re buying right now, because they want to make sure they can sell their current inventory that is on the market. So long story short, I really encourage you to be somewhere in that Sunbelt, I’d really encourage you to use privy if you aren’t yet. And I’d really encourage you to just be in a place where you know, your buyers are willing to buy certain price points, the market is still moving, it is still a great time to be a wholesaler fixing flipper as well as a buying hold. You just need to run your numbers correctly. And if you do that, then you’re gonna get deals, then you’re gonna be able to make money. Hopefully this helped us that’s my answer to the kind of the all encompassing what am I doing? How am I changing, not really changing much. I’m offering a little bit deeper discounts when I’m offering on these homes. But essentially, I’m going to stay in markets that are great for flipping and holding for myself in my portfolio. Hope this helps again, go to minutepages.com for your webpage. Check it out. It is the best platform for all real estate investors to have a presence to have authority to have branding. Make sure to go to minutepages.com I’ll see you guys on the next episode. Oh yeah. And by the way, if you’re listening to this on iTunes, give me a five star review iTunes really starting to pump this out more. And if you’re not yet, make sure you’re over at my YouTube youtube.com forward slash Justin Colby. Make sure you like this video and make sure you subscribe. Talk soon
