Wednesday, March 31, 2010
Real estate investors are still doing well
I have spoken with a couple of other real estate investors working in the Tampa Bay area the past few days. Needing advice on a rehab, I was able to ask someone that has specialized in that area of investing for a long time. A meeting with another investor and friend to catch up on a few shared deals led to looking at several houses in Tampa and dinner.
The rehab specialist works mostly in Pinellas county. He has not had any problems finding distressed houses for good prices. Buyers for the updated houses have not been a problem, either. This investor likes to do “complete” rehabs, replacing all kitchen appliances and cabinets, bathroom fixtures and tile and all floor coverings as well as any windows, doors, etc… that are not in good repair. He likes to sell “the nicest house on the block”, no matter what it looked like when he bought it. Most of the work is done by the investor himself.
The other investor works mostly in Hillsborough county and used to mostly wholesale properties. He has transitioned into rehabbing most properties during the past six months, seeing it as a way to make the same amount of profit while buying and selling half as many houses. He also sees no shortage of good deals on rough houses or buyers for the repaired homes. The plan for these properties, though, is to do the least possible work to make the house presentable to a buyer and keep the selling price in line with short-sales in the area. All of the repair work is hired out.
Both of these investors noted that good labor is available at bargain prices now. The virtual halt of new home construction has left a large and idle pool of skilled workers looking for a job. This will not last forever but is helping real estate investors now.
The two investors also noted fewer properties on the market. Buyer demand has increased and they thought the flood of new foreclosures into the market had slowed slightly. Realtors I spoke with have noted this smaller inventory, too.