Is Phoenix, AZ still viable for wholesale property?
Is Phoenix, Arizona still a viable market for investors looking for wholesale homes?
Phoenix was one of the first major US housing markets to really recover. This meant that it attracted a lot of investment dollars and investors from all over the world. After becoming incredibly competitive, many began looking to other markets. Now, many investors are wondering if now is a good time to return to Phoenix, if there are any deals to be found, and if so, for how long?
Some wholesalers looking to return to Phoenix to sell homes have found that the market has changed a bit. Some report having difficulty finding viable opportunities to wholesale MLS properties. However, many experts and analysts predict that the best days to make money in the Phoenix real estate market are yet to come.
Home prices may have risen significantly in this region over the last few years, but analysts estimate that they will rise 50-150% over the next 10 years.
A recent report by the California newspaper UT San Diego places Phoenix, AZ in the top 10 fastest appreciating US real estate markets in August 2013, meaning it is still alive and offers fantastic conditions for sale of wholesale houses.
Perhaps most significantly, however, the CCIM Institute sees Phoenix as a rising ‘secondary market’ for global commercial real estate investors with deeper pockets. This indicates more business and job growth on the way, which is exactly what is needed to generate real growth in the region.
At the same time, major hedge funds and behemoth private equity firms have announced that they will withdraw from pursuing REOs as rentals, instead offering their cash for smaller investors to borrow as working capital. In addition to an increase in transactional lenders, this provides wholesalers with more than enough leverage to do significant volume.
True, price ranges may have changed, but this means little to wholesalers who use cash, short-term financing, or stick to contract assignments.
The ability to find viable agreements depends on the strategies that are implemented. There may not be as many foreclosures or REOs out there and wholesale MLS property requires some extra knowledge to make it work.
So if you’ve been considering flipping homes in Phoenix, Arizona, go for it. Just be smart with your wholesale marketing, be flexible in your prospecting tactics, and you’ll find a significant flow of business available.
