In the real estate investing game, it’s called “driving for the money,” an approach that involves physically visiting certain neighborhoods or communities and looking for properties that aren’t on the market, but whose owners might be open to an offer to sell. And these days, in the midst of the tightest upstate real estate market in memory, Bill Clark is driving a lot.

“There is definitely a problem finding properties,” said Clark, a Spartanburg resident who has been investing in real estate for nearly 40 years. “I go to Anderson, I go to Walhalla, I go to Gastonia (NC), I go to Lincolnton (NC). I go everywhere, because that’s how I was raised. You have to get your tentacles out there.

Indeed, for upstate real estate investors, this current residential market can bring either windfalls or headaches depending on how many properties they have in their portfolio. With only about 2,000 properties on the market in February, according to the Greater Greenville Association of Realtors, median sales prices are at an all-time high. And with so few homes available for purchase, average rents have increased by about $200 a month since this time last year, according to data from RentCafe. All of this means more money for investors, whether they have properties for sale or for rent.

“It’s a good time for investors looking to liquidate,” said Gregg Branham, founder of Easley-based real estate investment firm Red Canoe Properties and president of the Upstate Carolina Real Estate Investors Association. “Prices are incredibly high, higher than ever. And since the time on the market is so low right now and prices are so high, it makes sense that when a property becomes vacant, to really think about selling it rather than renting it out again. And when you do that, you can trade in your property for something bigger. That’s what I try to do.

“We have to move”

Who are the best-placed real estate investors right now? Branham pointed to “enders,” the industry language for investors nearing the end of their careers who have a portfolio of properties they can sell at the top of the market. The rest are pretty much in the same boat as everyone else, whether they’re cash-rich transplants from California or first-time home buyers looking for a Fountain Inn: scour the market for something thing they can buy and try to beat the rush to get that.

“This is the toughest market I’ve ever seen trying to find properties,” Branham added. “I’ve been kicking off the antennae and letting everyone around me know that I’m looking hard and heavy for rehab in Easley, especially a project that my son and I can work on together. And it’s been hard You look at the inventory of properties there, and it’s about half of what our average was before.

That’s why Clark drives and acts fast. “Time is a major factor,” he said. “You have to move. Whether you pay cash or borrow money, you need to move. Many investors won’t be able to do this – it takes them a while to collect the money. But the biggest problem they have is that they can’t pull the trigger.

Investors typically seek out neglected homes in need of renovations or repairs, finance the necessary repairs or renovations, and then hold them long-term for their rental income before selling them when the time is right. They’re not all “pinballers,” that is, investors looking to buy, fix, and resell homes as quickly as possible, trying to minimize costs like taxes, utilities, and insurance. In both cases, the rehabilitation budget can be substantial. “It used to take about $25,000 to redo a small two- or three-bedroom house,” Branham said. “That figure is probably $60,000 to $70,000 now. I’m talking about completely redoing the interior, painting and flooring, upgrading appliances and bathrooms, new HVAC, new roof, that sort of thing.

And while low sales inventory has boosted rental rates, the monthly amounts landlords receive from their tenants can vary. Branham says he owns two houses next to each other, one renting for $995 a month and the other for $1,475. The difference? The tenants of this last house are new, while those of the old house have been there for eight years. “The rent was around $750 when they moved in, and even if you raise it by $50 a year, you can’t catch up with what the market is doing,” he added. “So you weigh whether you want to raise that to market rate and risk the property sitting vacant for 30 days. Is it worth it?”

“Just too good to pass up”

Everyone in the Greenville real estate industry is wondering if and when the market will cool down, and investors are no different. Although prices are not rising at the same rate as in the past two years and the shortage of inventory appears to be easing, buyer demand has simply not abated. In South Carolina, only Horry County has added more population in the past decade than Greenville, whose bustling downtown and diverse outdoor recreation options continue to attract buyers from areas with higher real estate values. higher averages.

In contrast, investors looking to buy properties are generally more active when the market is falling. “You don’t wish harm for the economy, but as long as you’re well positioned and have financing, those are the times when you can acquire more properties,” Branham said. In the short term, at least, a downturn seems fairly unlikely for the Greenville area, which is driven by insatiable, cash-rich demand, as opposed to the preponderance of subprime lending that caused the housing crash of 2008.

“This market here is never going to crash,” said Clark, a former board member of Upstate CREIA. “There are too many people moving in. They are coming in droves.”

In fact, the market is so strong now that Clark was convinced by a colleague to get back into real estate investing after retiring a few years ago. “It’s too good to pass up,” he said. “So I immediately started getting back into the game. And I’m in it now. Everything is going up so much, there’s a lot of money to be made.

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