Wholesaling Strategy: Cashing in on the Next Big Thing in Real Estate
There is a new trend in real estate which many investors have been overlooking, yet could answer a lot of their problems and deliver more profits…
A recent Fox News report calls multigenerational housing the ‘next big thing’ in real estate, and the numbers seem to back it up.
Multigenerational Housing and Your Wholesaling Strategy
The recent weak economy and foreclosure crisis has forced many families to move in together under the same roof. This isn’t just a case of college kids heading back home after school because they can’t find a job either. It is true that 25% of 24 to 34 years olds may be unemployed today according to recent stats, but now many are also having to accommodate their parents and even grandparents too. This is leading to a dramatic rise in housing units occupied by three or more generations.
According to recent research and historical data, this number has now ballooned to tens of millions of households across the U.S. and resulted in a 25% rise in demand for this type of housing in the last 2 years.
However, we are still way under the percentage of multigenerational households seen after the last great depression, leaving room for this trend to at least double in the next couple of years.
In fact, whether the economy begins to improve or not, many families will continue to choose this type of living arrangement for many years either just because they are being more frugal and want to save or because so few can qualify for mortgages any more.
The question is how can you tweak your wholesaling strategy to capitalize on this trend?
4 Ways to Cash in on Multigenerational Housing Demand
1. Identify Motivated Sellers
Many are giving up battling to keep their homes and will move in with family. In many cases, they are underwater and don’t care how little their homes sell for as a short sale. What they need is speed. Help them out and take these properties off their hands quickly and lock in spreads.
2. Flipping Multifamily Properties
Of course this trend not only means people selling, but buying properties which will become multigenerational properties sooner or later. Multifamily properties are a great choice for those who want to shave expenses and live close to family, but maybe not give up too much privacy. Two to four unit properties can enable couples to take on bigger homes and offset expenses with rent until their kids grow up or parents need a place to stay and occupy the other units. Find them and flip them.
3. Larger, Older Homes
Other buyers are looking for affordable deals on larger homes which they can remodel and adapt as their housing needs change instead of constantly moving. Older, larger homes can be ideal for them. Flipping these houses in their current state can be a great move and sure beats improving smaller homes and losing money on rehabbing, as so many other investors are doing.
4. Lots with Multiple Units
The wholesaling strategy or acquisition strategy of so many others is to solely focus on 3 bedroom ‘bread and butter’ homes, creating a lot of competition for them and driving down returns. How about finding properties with multiple units on them, which can be used as separate living quarters, and flipping those for less competition and bigger profits?
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