“Right now is the best time in the history of the modern world to buy real estate!” Who said that? Certainly someone with a motive: seeking more commissions or fees, increase readership, more “likes,” additional “followers” or simply looking for an “atta boy/girl” from the boss. Whatever their motivation is people are saying it – often and LOUD.
Are we at the bottom? If I had a crystal ball, I would be able to answer that question. Unfortunately, I do not and neither do all the prognosticators. What I can say is if you are, in fact, waiting for the bottom you are going to miss it. Market timing is impossible. What I can also tell you is that in my adult life I have never experienced a better time to buy real estate. The long term interest rates are fluctuating at all-time or near all-time lows, there is a surplus of properties in and coming into the marketplace and values are significantly lower than they have been in recent years.
You may be one of the lucky ones out there who is sitting on an abundance of cash. Maybe you are a little hesitant to jump back into the stock market. If you have ever thought about investing in real estate or buying that vacation home, it is now time. Here are a few things to think about:
As I mentioned, there is an abundance of property on the market and in most cases these properties have an element of distress. This is something to embrace; not be afraid. Due to this situation you will be required to act quickly. You will be competing with other like minded folks and speed usually wins. It may be speed in submitting your offer or the speed in which you can close. If you are paying cash – be liquid. If you require financing – be pre-approved with a lender capable of lending you funds for this type of property.
If you are looking for a multi-family in a specific town, wait for it. Don’t start looking at condominiums in another town. You have a plan, stick with it. If you want to be in a certain price range, stay in that price range. Your professional real estate agent will find you what you are looking for.
You may not see what you looking for right away. The property is out there. If it’s not on the market right now, it will be soon. Don’t compromise. Also, when you find the targeted property and contract to purchase it, the process may not go as smoothly as you would like. Distressed properties are called “distressed” for a reason. You can count on delays with paperwork – stay the course, it’s worth it. Six months after the closing you will have long forgotten how painful the experience was and by then you will be reaping the benefits. If it was easy, everyone would do it.
Enlist the services of a professional real estate agent that understands your goals. Also, engage a real estate attorney that understands real estate investor law and the specifics to what you are looking to do. Not all attorneys understand the intricacies of a distressed property.
Before you enter your specific market, understand that market. What are the recent sales prices of properties similar to the ones you want? Understand the difference between a short sale, an REO/bank owned property and an estate owned property.
Stay focused. You may get outbid on a property that you wanted. Real estate investors are not emotional people. Move on. There will be another one and more than likely better…
Good Luck and Happy Hunting!