2012 is a pretty damn amazing year – for real estate movers and shakers.
With properties priced at pennies on the dollar, this 2012 real estate market is even a little overwhelming.
It’s a divided market – with bountiful opportunities for buyers and teeth grinding frustration for lots of sellers.
Relating to the sellers, many have removed their real estate from the markets – hoping to hang on and wait until values start to climb again – but nobody really knows when that will happen, though we all speculate, don’t we ?
For the sellers who can’t hang on AND owe more on their real estate than they can hope to sell for, it’s a tough go.
They have to do a short sale or be foreclosed – because they can’t hang on.
Bottom line is that no real estate market is perfect – and some people get hurt. You’ve heard that saying a million times – “you can please some of the people some of the time, but you can’t please all of the people all of the time”.
Getting back to WINNING (Sorry Charlie), buyers are kicking ass now – CASH BUYERS.
Conventional buyers with less than perfect credit scores are having a tough go, because lenders have tightened up on lending – which sucks and makes no sense – to me.
Back in 2000, 01, 02, 03, 04, 05, 06 and 07 – even in 08, banks were lending to everyone – housing values were at all time highs and banks were betting the farm by writing loans to countless borrowers that THEY KNEW would not be able to repay.
Yeah, those ARMS (Adjustable Rate Mortgages) were made to fail, and “pioneers” like Countrywide were at the forefront of developing all kinds of products for bad debts – uh huh !
Ok, so you know the rest – numerous banks went belly-up when record amounts of loans began to fail and here we are, in 2012 – still trying to come out of those dark times.
WINNING ? Yes, cash buyers are the big winners, in this market. Sellers who can hang on are also – probable- winners, though only time will tell.
Loan Mods, Write Downs (Do they even exist ??), Short Sales, Foreclosures – they’re all going to continue in 2012 and well into 2013 – in my humble opinion.
However, I do believe that values are starting to climb, now, even as REOs(Bank-owned properties) are flooding the market.
I also believe that lenders will start to loosen up – because they really swung from one extreme (lending to everyone AND their grandmother (Sorry granny – I couldn’t resist)) to another (lending to, hardly, anyone).
It’s time to move back to the middle and rebuild -
WINNING ? If you can, take advantage of this market, because nobody knows how long these scratch and dent prices will last, but I think it’s safe to say that, if we’re NOT already at the bottom of housing values, we’re close enough and the ride, back up, is going to be a sweet one – for those who get in now.
Think it's hard to wholesale real estate in this 2012 market ?
Well, it's not - IF you have the right deal - but isn't that always the case - regardless of the "current" market ?
Here's the deal, man.
Someone who knows their market, well, can easily benefit from buying a property from a knowledgeable real estate wholesaler - like you.
Question is, are you a competent real estate wholesaler ?
Here's a way to answer that question:
Do you know your chosen market(s) well ?
Do you have viable/assignable contracts ? -
What do I mean by viable ?
You have a market where a majority of 3 bedroom/2 bath homes, on a quarter acre lot, are selling for 295K - all day, every day.
These homes are on the market for, an average of, 45 days - and there's 2 to 5 SOLD comps - within the last 45 days, within a quarter mile of your subject property.
What makes your deal, especially, sweet is that you have your wholesale property, under contract, for 210K - and it's in better shape than 2 of the comps you're using in your presentation to your buyer (You ARE showing your - potential - buyers comps, RIGHT ??).
Your issue is that you have a limited amount of time to flip, or sell/assign, that contract, before your time runs out - contractually speaking.
You're fine, because you have a great contract/purchase price, RIGHT ?
You already know, by the flow of this blog, that your assignable contract price is not enough - and if you don't have any escape clauses, you're probably an idiot - unless you're of the fortunate few that can, and will, buy that wholesale masterpiece - should your contract require, if you're unable to assign that contract within the amount of time that's, mutually, agreed upon in the terms of your contract.
Ok, before you decide that you're an idiot, you do have enough time - per that assignable contract (You did make the contract assignable, RIGHT ?), to market, MARKET MARKET your exclusive AND assignable purchase price.
So, you advertise in ALL the LOCAL media that's focused on the area where your wholesale flip resides -and you have bandit signs and flyers - posted at any/all local businesses too.
As a sidenote, you also made sure that the seller, completely, understands that you'll be seeking a partner/investor who will "fund" the purchase price.
While you don't have to spend alot of time focused on this fact (in fact, you should NOT spend too much time explaining this fact - as you may put the seller off), it's best you make it a focal point, as you'll be needing to show your, perspective, buyers/assignees - first hand, the exclusive opportunity they have and IF that subject property is occupied by anyone, or is secured, you'll need the seller/seller's agent, to open that property every time you need to show it.
In my world, I believe in buying the wholesale properties I secure.
Why ? Because a great deal is a great deal AND if I can't assign the property, within my contracted time frame, then it's a minor error on my part - IF I know what I'm doing.
What the hell am I trying to say ??
Pay attention to your, chosen, markets.
If you contract to purchase a "wholesale" property - you need to be sure the purchase price matches the condition of the property with an, additional, GENEROUS discount.
Making your 5K+, per assigned deal, will be ensured IF you have a, undisputably, great price AND an effective marketing plan.
Also - the only, TRUE way to build your buyer's list is to, actually, get a property under assignable contract and market -
If that deal is everything you believe it to be, and you're marketing the living shizz out of it - you'll find your buyer(s).
Go get em !!
New To You RE, LLC
In most cases, our mamas want to see the best in us.
Even if you’re not the best or the brightest, your mama wants you to succeed in whatever business you pursue.
World economies have gone through tremendous changes, just over the last 5 years, and those changes are not all good, either.
That does NOT change your mama’s need to see you happy and successful.
My thought is, if you’re happy, then you are successful – but this blog is not about that kind of happiness and success, it’s about financial happiness and business success.
So, in this challenging economy where, even, college graduates are struggling to find a JOB (Some call it a career) and are struggling with mountains of debt, as a result of their student loans, what can YOU do to lessen the odds that you’ll fail ?
Be aware of some very simple opportunities that are always present AND have a laser focus when it comes to tapping into your, true, passions and/or interests.
When I say “very simple opportunities”, I’m referring to those opps within your scope of passions and interests.
You know what I’m sayin too !
In every economy, and many times, despite the economy – many people succeed and do VERY well, both in financial happiness and business success.
You recognize them – those who look relaxed and content, they’re usually smiling and they have a sense of confidence – it’s that body language that you can read, clearly.
Did you know that most successful people are not college grads, they don’t come from a financially wealthy family and they didn’t have anyone, simply, hand them the keys to success.
What these people have is passion and drive.
They recognize their strengths and/or interests.
Some refer to them as Type “A” personalities, but they’re no different than you – other than they’ve already reached a certain level of financial happiness and business success.
My interest is real estate and that’s where I’m building my financial happiness and business success, but it’s more than that.
In my journey through building this business, I have endured mountains of failures – and I still fail.
Those failures are lessons and I keep learning and, as a result, growing.
I, also, clearly understand that I do NOT know it all, but I know enough and my open mind will always enable, NOT disable, me.
Over the time I’ve been into real estate (Since February, 2006), and through all those failures AND successes I’ve had, I changed and I’ll never be the same man I was, previous to February, 2006.
My eyes AND mind are wide open and I’m finding that I have other interests I’m going to pursue and, therefore, I’ll continue to learn and grow.
Every success AND failure is a lesson that I’ve learned from.
THAT is, in reality, true education.
Go on – make your mama, AND yourself, proud.
·* Identify your passions and/or interests
·* Learn to recognize the butt-loads of opportunities, w/in those passions/interests that are all around you
* Identify how you can tap into those opportunities – then tap away
* Keep an open mind and understand that you’ll never know it all – but you’ll know enough and that your open mind will ALWAYS enable you to learn and grow.
* An ingredient to success is failure and failure will always be present in your life. Learn to accept those failures because that’s the only way you can, thoroughly, learn the lessons that will help you reach success.
* Depending on what your passions and interests are, you may find that you do NOT have to go to college to reach financial happiness and business success.
* Start RIGHT NOW. You have a pretty strong idea of what motivates you – task yourself to write down some steps you’re going to take, over the next 7 days, that will put you on the path to inserting yourself into an active role within those passions/interests.
·* HOLD ON !! Because once you take those first few steps, that passion of yours is going to ignite and you’re in for an exciting, crazy and fulfilling ride – and your life will never be the same.
When you reach your financial happiness and business success, look around and see them.
You’ll recognize the look in their eyes and you’ll remember that inquisitive look was yours, back in the day - when you recognized financial happiness and business success and began your journey.
You’re an inspiration.
By Mik Cohen
At mikcohen.com - we enjoy sharing insights, helpful tips and specific information. Feel free to comment and share your knowledge and experience, but please keep it respectful.