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How are Short-Term Real Estate Investors Profiting in Today’s Market?

The cap rates for income properties are at all-time lows, creating extremely high valuations. The sale price per square foot for residential properties is at all-time highs.

It is difficult for investors to profit from short-term real estate investments in what seems to be an overvalued market.

Through my experience arranging financing on all types of real estate transactions, I have learned the kind of short-term investors who are capitalizing on the inefficiencies in the market and making a profit.

Here are three types of real estate investors I see profit in today’s market:

  • Investors with development/construction expertise who can add value to properties, e.g., assembling parcels, creating higher density, transitioning property to its highest and best use.
  • Investors with the financial wherewithal to perform fast in purchasing a property, a property purchased in a matter of days with little to no contingencies often will come at a discount.
  • Investors with the right relationship connections to acquire properties that are discounted, e.g., properties that never hit the open market, firsthand knowledge of distressed sales, etc.

The long-term real estate investor has inflation on their side to help offset this current high-valued market. But the short-term investor needs specific expertise, the financial means, and the relationship connections to profit into today’s market.

Are you a short-term real estate investor? How are you navigating this high-priced market?

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