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IS NOW A GOOD TIME TO INVEST IN REAL ESTATE?

I got into Real Estate investing 9 years ago after “serving” 12+ years in the corporate world after graduating from college. Over the last 9 years I’ve been in a number of Real Estate arenas, Single-Family, Commercial, and Construction. During this time I’m constantly working with folks that are either thinking about investing in Real Estate for the first time, or adding to their portfolio. Inevitably the question I hear most often is “I’m not sure if this is the right time to invest in RE, what do you think Hulet?” I heard the answer to this question years ago, and here’s the answer: TODAY!

 

The answer to the One-Million Dollar question, “When is the best time to buy Real Estate?” is TODAY. This was the answer for me 9 years ago when the Real Estate market, along with the lending arena was booming, this was the answer for me 3-4 years ago when Real Estate was crashing and burning, and this is the answer at the end of 2013 as we head in to 2014!

 

If this is the first time you have heard this then your next question is, or should be, how can that be? How can every day always be the best time to purchase Real Estate? That the simplest question to answer and I will answer that in two parts:

 

First, the luxury that every want-a-be investor, or existing investor has is doing their due-diligence. That is studying an investment opportunity. During the due diligence the bottom line decision is, will this deal make me money? If you are not sure of the answer you need a mentor/coach/team to help you get to that answer. If the answer is “maybe” it will, than most likely it won’t and you need to run away from the deal. Another great thing about Real Estate Investing, if you miss a deal, it’s like missing a bus, another one will come along in about 10 minutes.

 

Having purchased over 1,500 properties in the last 9 years I can honestly tell you that I have missed deals, but there’s NOT a single deal that I can ever remember where I just can’t get over it, can’t forget about it, can’t let it go, NOT ONE! And at the volume of acquisitions we do, I know we miss deals!

 

On the other end when you complete your due-diligence and see that you are going to make $800 a month positive cash-flow, or possibly a $50,000 gain from a flip, now you might have a money maker! And guess what, at this point all you have invested is time! Now that you see there’s an opportunity for making money you should play devil’s advocate and ask, OK, how can I NOT make that $800 per month, or the $50,000 gain? Because I will caution every investor that sees these numbers, MOST LIKLEY you will NOT end up with that number when the dust settles. Real Estate Investing is constant at giving “surprises.” These are not the “surprises” we asked from Santa Claus growing up. These are unknown expenses that we never/ever could imagine.

 

A business partner and I were going to build a duplex near the University of Memphis. No problem right? The building code we reviewed showed the neighborhood could have SFR/Duplex. And the entire area is made up of SFR/Duplex, so no problem building a duplex right? Wrong! After we purchased the lot, and had the duplex plans, we went to building code to pull our permit to find out that years ago the City of Memphis stopped allowing duplexes in that area. Seriously! That was “surprise” number one! No problem, we regrouped, went with a 4 BDRM/2BTH floor plan that would work great with 4 college students! So we get our building permit, and get the utilities set up for the construction. There was a house on this lot at one time, it was evident, so surely no problem getting the utilities set up. Wrong! We found out that there was no water service to this property. Further, the only way to get the water was to pull it from across the street. No problem again, the streets in this neighborhood are only 15 feet wide, can’t be that big of a deal. “Surprise” #2 came in the form of a $7,000 expense that we did not plan for, just to get water to the property.

 

So, rest assured I can share many stories like this, but have learned from instances like this to always have a nice cushion built in when doing your due-diligence.

 

The second dynamic of being able to confirm that TODAY is always the best time to buy real estate, know your market. Not just knowing your market, but becoming an expert on your market. I tell many people that I’m a Real Estate NERD. Real Estate transactions are public information, in case you missed that. You and I are able to review most all transactions (I know there are exceptions on some deals and in some markets). Not only can I view what properties are selling for, and who are the buyers, but I can also see who is lending money, and how much they are lending. After you have looked at 1,000’s of deals, inspected 1,000’s of properties in person, and reviewed 10 times that much data on-line and in print you become VERY knowledgeable about your market! This allows you to find that deal every single day of the week. Snow, rain, sleet, or shine, there is a One-Million Dollar deal every day for the taking.

 

Today my team, and yes I have a GREAT TEAM that helps me achieve the volume of deals we do, is able to find deals, put these under contract, before we even see the house! This sounds too good to be true, but it happens. There are Real Estate transactions going on every day in every market, investors making money, and they never see the property!

 

In April 2012, someone I consider part of my TEAM, a Real Estate agent in the panhandle of Florida called me about a 3/2 condo across the street from the beach in a very desirable coastal/vacation area. He had been sending me deals for over a year and I knew this one added up! We put it under contract at $94,900, never saw it, and closed. We had tenants in this condo for the first 18 months at $1,300 per month. During this time we watched the market completely turn around. We currently have this under contract to sell for $149,900! Do the math on that one. And I’ve never seen this property!

 

So to sum this up, I’m confident I can prove to anyone that NOW is the best time to buy Real Estate, but most will NOT! What is unfortunate for most becomes my fortune! Most people will think about Real Estate investing at one point or another in their life. It doesn’t matter what profession they are in, what their age is, where they live, it happens because Real Estate is a part of our lives on a daily basis. It’s in front of us constantly, but most will have their fire go-out quickly and they move on with their life! Or, they get in to Real Estate investing and simply will not commit to what’s needed to be successful and they move on after 1-2 years in the business. So my fortune becomes the missed opportunities from others simply not being in the market!

 

TODAY is they day to change your life with Real Estate Investing! What are you willing to do TO MAKE IT HAPPEN? The best phrase I’ve ever heard….JUST DO IT!!

Posted by Clifton Stone at 3:35 PM

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