Conversations in my head: The market went up? But I thought everyone is losing their jobs because of the pandemic? Is now a good time to invest in real estate? Yes, yes, yes!
Supply and Demand Principle: The market went up due to a simple economic principle: Supply and Demand. Home buyers were interested in buying but very few homeowners were interested in selling. So what happens? 50 buyers are looking and only 25 homes are for sale. Let's split the houses in 2? Can't do that. Well then... The potential homebuyer, under the influence of their Real Estate Broker says, "Lets just pay more for the home than our competition is willing to pay!" Welcome sellers market. The market was hot not because there were more buyers than usual, just less sellers than usual. Job loss did very little to affect the real estate market.
Business as Usual: Well, if it's a seller's market, should I even invest? I'm most likely going to overpay and hope the market keeps climbing. What should I do? Business as usual was the answer!
Exploring Other States: The author has been around the real estate business since childhood and contemplated trying their Fix and Flip experience in other states. However, during the pandemic, there were too many restrictions due to Covid, building material shortages, and labor shortages.
Move-in Ready vs. Homes That Need Work: One thing the author noticed during the market climb of the pandemic is that "Move-in Ready" homes were going fast and for over market value. Homes that needed a lot of work, not so much! Unfortunately, these homes that needed work were priced too high. They would not make sense financially to invest in at the current price.
Investment Strategy: The author goes to see most of the houses that needed work and asks themselves the main question, "Would I live here if this place was all fixed up?" If the answer is no, they move on to the next potential property. The author writes offers for the amount that would make sense financially and can't do a Fix and Flip and lose money! Some of the offers that they wrote were for $100,000 below the asking price. Most of the offers were rejected, some offers were countered at a price that was still not even close for them to make a profit and others said we will keep your offer in our back pocket and we will see if we get any other offers in the meantime.
Persistence Pays Off: On the surface, the author's strategy seems like a waste of time. Why would someone sell their home at such a discount in a hot market? There are thousands of answers to this question, here are a few: Estate Sale, Relocate for work, Home needs too much work for a retail buyer. Long story short, the author ended up writing 26 offers for potential properties and was able to secure a beautiful 2-story home for $60,000 below the asking price!
Conclusion: The author offers their services as a Real Estate Agent who is not scared to write 26 offers for their clients and specializes in real estate investment. They also offer help in finding real estate investment opportunities like Fix and Flips, Rental Properties, Multifamily, Etc. and can be contacted for a complimentary consultation.