As I was reading a report last week on the status of real estate investing in different markets around the United States, one number kept jumping out at me - the percentage of real estate investors paying cash was huge! In some markets around the country, real estate investors paying cash made up more than 75% of the transactions. Since real estate is a hyper-local industry, with each individual market able to vary wildly from the next, keeping an eye on the trends of investors before making assumptions is a huge task.
About a year and a half ago, the owners of MemphisInvest.com recognized a trend taking place in the investment real estate market and adjusted the way the company marketed to clients. Gone were the days of no money down and cash out re-financing. These marketing buzz phrases attracted investors who wanted to invest out of necessity, needing to change their lives which is a dangerous route to take. We were looking for the long-term investor who had cash and was savvy enough to see through marketing ploys and understand how to determine true "value" in an investment deal. It would appear today that we were right in our assumptions.
Real Estate investors who are using cash to close transactions make up nearly 65% of our clients. The typical cash investor that we deal with today are looking for a solid yield, but understand how to accurately calculate the yield. They also calculate service into their value equation and are less likely to get hung up on numbers as they are timely reporting and access to data and personal. They want to be kept informed not only of the condition of their investment, but also the trends taking place so they can make solid decisions about future purchases. These were the investors we wanted to find 2 years ago and the fundamental shifts in thinking within our company have bore out fantastic results.