Real Estate Marketing & Beyond
Many housing experts have predicted a slowdown in investor activity this year, but investors don’t appear to be fading away from the market. They might just be shifting their focus to different types of properties, as distressed inventories dry up in many markets.
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“There has been a clear rebound in investor participation in the housing market,” says Thomas Popik, research director for the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, which showed strong activity among investors in December 2013.
“The statistics for the housing market, particularly the non-distressed segment, remain generally strong, but investors still are increasing their activity.”
Investors are increasingly targeting non-distressed properties, reports RISMedia. This can be taken as a sign that investors are increasingly creating demand for full-price homes on MLSs, rather than distressed sales alone.
In November, investors accounted for 13.2 percent of purchases of non-distressed properties based on a three-month moving average. That's up from 10.5 percent in August, marking a seven-month market share high for investors, according to the HousingPulse survey.
Investors had started pulling away from the market in March 2013 as home prices soared, with their overall market share dropping to 16 percent, according to a survey by the National Association of Realtors. But by December, they bounced back, ending the year strong with a 21 percent market share — about the same level at which investors’ presence peaked during the foreclosure crisis.
Wow, I'm not sure that I agree with all of this.
If investors are buying non-distress properties and they don't know what they're doing, they are really banking on appreciation and they better be certain about the cost of operating costs of property such as vacancies and repairs. Many people never take that into account.
Personally, I have focused on high-equity sellers for my business because then I have multiple exit strategies. I can hold the property long-term and I will be buying at a discount or I'm buying at a significant enough discount that I can rehab and flip the property and make a five-figure paper paycheck right then.
I know there are different schools of thought behind buy and hold as opposed to flip and rehabbing. I myself have been able to make an excellent living at flipping and rehabbing and I also pick up rental hold properties along the way. It has worked well for me for over 12 years now.