Cash deals drive Baltimore's housing market
Want to guess what percentage of homes selling in Baltimore are purchased without bank financing?
More than half.
Yeah, you read that right.
Real estate investors plunking down cash for purchases -- their own or from other investors -- are a major part of the buying pool in the city these days. Today's story gets into some of the causes. Effects TBD. One question is whether this group of investors will fare better than the many who got caught by the housing bust, leaving rentals and half-finished rehabs for the banks -- and neighbors -- to deal with.
Though many investors these days expect to buy and hold as landlords, riding the wave of rising rents, there are still "wholesalers" at work who get homes under contract and then flip the contracts for a fee to other investors -- landlords and rehabbers who don't want the bother of dealing directly with homeowners. Here's a video with wholesaler Mark Whitten of The Equity Depo, who says he's done more than 150 wholesale deals since he got into the business in 2008:
Whitten, 29, calls himself a "hustler" by temperament, and he's certainly using his marketing degree to good effect. His van is a moving advertisement, wrapped with his photograph, his telephone number and "Mark Buys Houses" in big letters. He's got videos on YouTube, email blasts with the properties he's hawking ("Granny wants out!!! Minor Cosmetics!!!") and a coaching program for others wanting to give wholesaling a try.
He says he's doing about six wholesale deals a month.
I tagged along with him to see a vacant rowhouse in Woodbourne-McCabe in North Baltimore last Thursday, and he declared himself interested after checking out why the person who had inherited it didn't want it -- boarded-up windows, gash in the ceiling, problems with the roof. He figured it wouldn't be hard to fix up as a rental, and the block struck him as desirable, with occupied homes all around and a grassy expanse of open space across the street.
"I'm going to make an offer and try to get this property under contract today," he said, adding later: "A property like this won’t last long at all. I could probably sell this thing in a day, mostly because of the neighborhood."
Reached by email later, he said he did just that -- got the contract and assigned it to another buyer that very day.