As an investor in Detroit, there are many great reasons to buy properties in bulk. That said, there are a number of things you will need to watch out for too. Learn more about buying bulk properties in Detroit in our latest post!
Buying in bulk can get you in over your head whether you are talking about real estate or groceries. It’s important to know how it works and what you can expect after closing on a transaction with multiple properties. Buying property in bulk can be extremely rewarding. If one property ends up making you a fortune, it is more than worth it to clean, process, and resell the properties that are just average. Investors often sell in bulk because they don’t want to deal with multiple transactions, or they have some bad properties they can’t get rid of and the only way to do so is my lumping them in with some higher quality properties. Buying and selling in this method can have perks for everyone involved.
Lower Your Vacancy Rate
When you are the owner of several rental properties, having a vacancy in one isn’t going to break the bank. However, when your rental income is tied to one property, that same vacancy means that you are instantly bringing in nothing each month until the property is rented out again. Without any rental income, you’re not only missing out on profits, but you will also find yourself paying the monthly utility and maintenance costs that had previously fallen on your tenant. When you have multiple properties, purchased via a bulk sale, you won’t have to worry so much when a property becomes empty.
Diamond In The Rough
When buying properties in bulk, you can typically expect to find properties at both ends of the spectrum – both great deals, along with a few duds. The goal is to offload the bad properties ASAP while putting your time, money, and energy into the ones that will generate a profit for you. Look for these diamond in the rough properties. Finding the right one can justify a bulk purchase, even if all of the properties included aren’t up to your standards! Just make sure you have a solid plan for the properties you don’t plan on keeping. If possible, work with other buyers, so you can quickly sell the ones you don’t want.
When you buy multiple properties at once you can go from a non-investor to a mogul overnight. Of course, we don’t advise buying properties in bulk if you have never invested before, but you are prepared and you know what you are doing, you can quickly find multiple properties to flip or rent out all in one transaction. Instead of spending years acquiring multiple rentals, you can do it in only one transaction. Just make sure you know what you are getting into when it comes to repairs, costs, maintenance, and finding the right people to live there.
There is typically much less competition when buying bulk properties in Detroit. Most buyers are looking for property for themselves. Most investors are looking to buy one property at a time to build their portfolio step by step. Fewer buyers are looking to purchase multiple properties at once. Many are concerned with the costs or potential headaches, however, once you understand the process, you can simply go through the motions to separate the bad properties from the good ones, focusing on the properties that are going to generate income for you.