How's the real estate market in Kansas City? This is the number one question I get asked every single day. I don't take it personally because I realize that most homeowners are concerned about the equity in their home and they hear all the negative news from the media that makes them worry.
My response is that it's just like the stock market. Sometimes it's up and sometimes it's down. Right now it's down a little but it will certainly come back. I think most people can grasp that analogy and they believe that it will come back too, but like the stock market, we just don't know when.
I then use this opportunity to explain to them that it's a great time to buy right now. Using my stock market analogy, you buy low and sell high, right? So if the real estate market is depressed, then wouldn't this be a great time to buy a 2nd home or a rental property? Most of my investors get this and they're buying like crazy right now.
Ironically, what's bad for your average homeowner is actually fantastic for the real estate investors. Think of it this way, the market is depressed and there are hundreds of homes on the market making it a very strong "buyers market". This is an excellant buying opportunity for someone that has the ability to purchase rental properties. On top of that, the subprime lending market has dried up, so now all these people that were able to qualify for a loan in the past, will now have to go back to renting apartments, duplexes, and single family homes. Because they will be flooding the market for rental properties in Kansas City, rental prices should rise.
It's simply the logic of supply and demand and it's the best of both worlds for an investor. Buy cheap and rent high! Most of my investors are currently on a 2-5 year buy and hold strategy. The market for flipping is still alive but I'm showing my investors why it makes more sense (and more money) to buy and hold right now.
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