Timing in Real Estate

By
Real Estate Broker/Owner with Daytona Condo Realty, 386-405-4408

Now, when the stream of foreclosures practically dried out, is the time when I get the requests for foreclosures. I am not talking about REOs, I am talking about foreclosures. So, before, when there were plenty of foreclosures, people avoided it as high risk deals. Now they are interested in foreclosures.

Are they? Or it is an attempt to go back and buy at 2010-2012 prices?

People, who are asking, think that there is an endless source of low priced available properties, so when they do not see “deals” on MLS, they want to turn to foreclosures.

We were working with foreclosures, buying at the court sales for about 4 years, but for about 3 years we are no longer doing it.

When we started, we spent 3 months just going to the court in Deland and watched the process, watched participants, trying to learn the business. And it was a very tricky business. After 3 months we entered the bidding. At that time 2 days out of the week was given to Daytona Beach, and this is what we were watching very carefully. Each day had 3—35 properties on the chopping block. There was a group of people, mostly the same people, who were buying foreclosures.

A few builders, several real estate agents, and newly formed groups, which were taking it to a new level.

And then the number of units started getting shorter, and the crowd of participants started getting bigger, and the prices started going up. And if when we started the most popular properties were about $50K, then they went to $80K, then to $100K… This is with the same profit. You simply now had to pay more to get the same profit from flipping. And, of course, the cost of a mistake was becoming higher…

At some point further participation was not making any sense. Contrary to what people usually think about foreclosures, it was consuming enormous amount of time. It was basically a full-day job tracing the properties, comparing different sources…

It was an art.

And if in our first year we were buying one out of 900 properties, later we were buying one out of 1,500 properties, and then we stopped going. There was no sense in doing it. Prices leveled with the prices for similar properties on the market, and at the auctions people sometimes pays more than we could buy on the market, but without the uncertainty of foreclosure, without pressure of time and demands of cash buys…

And after we dropped out of this business, we started getting requests for foreclosures.

Folks, times changed. Market is very different. Looking back for deals of the past is a waste of time. Deals today are properties, that would greatly appreciate tomorrow, but there are no properties, which are great flip today.

Flips are not the properties, which some uneducated seller put there for a ridiculously low price. Flips are when you buy and add value by remodeling, or by waiting or both.

Flip is not buying properties for half price, so that you can immediately resell them for double the price. This is a silly real estate fairy-tale. Flip is buying a property today, which would appreciate in relatively near future.
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I am a condo broker in Daytona Beach area. E-mail or call me 386-405-4408
Image by Alan Cleaver via Flickr.com

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Ambassador
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Paul S. Henderson, REALTOR®, CRS
RE/MAX Northwest. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

I too have people clamoring for foreclosed property however the best I can do is a short sale from time to time Jon Zolsky, Daytona Beach, FL 

Jan 29, 2018 10:23 PM #1
Rainmaker
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Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

It is not easy for smaller investors in my hood of CA. Larger companies are buying older houses and build mentions, but it is hard to find something just for a quick flip. 

Jan 29, 2018 11:22 PM #2
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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Paul S. Henderson, REALTOR®,CRS, - I can't even offer a short sale, they are nearly all gone. Thank you for the comment

Jan 30, 2018 06:33 AM #3
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Inna Ivchenko - We stopped working foreclosure when too few properties caused investors to bid too high. Even though our investors were no building mansions that you mentioned, but rather modest homes.

Jan 30, 2018 06:34 AM #4
Rainmaker
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Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

I always wanted to do a flip and never had the nerve. So many horror stories of unexpected expenses. I was just not meant to be an investor!

I'm not surprised at what you are saying about people wanting something now that it is no longer available. Human nature!

Jan 30, 2018 09:10 AM #5
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Sharon Tara - like everything else, flipping is a specialty, and if you know it well, you will be fine. The problem is with people who wants to do it because it sounds easy.

The businesses people fail the most are hospitality and restaurant business. Even though people need a roof over their head when they are on vacation, and food. And 81% of all restaurants in our area go out of business in the first 2 years.

Jan 30, 2018 12:37 PM #6
Rainmaker
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Lisa Von Domek
Lisa Von Domek Team - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Great points Jon Zolsky, Daytona Beach, FL I have no foreclosure market here and "flippers" are few and far between.  But, the only constant is change so....

Jan 30, 2018 09:30 PM #7
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Lisa Von Domek - and this means your market is pretty good

Feb 01, 2018 06:40 PM #8
Rainmaker
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Lisa Von Domek
Lisa Von Domek Team - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Yes Jon Zolsky, Daytona Beach, FL it certainly is, but it is strongly a seller's market and has been for some time.  Buyers are frustrated...

Feb 01, 2018 06:49 PM #9
Rainmaker
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Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Jon, there are always people who are behind the times, I tell them look at the "great values" based on today's market, do not look in the rear view mirror we passed those landmarks a long time ago, Endre

Feb 03, 2018 09:04 PM #10
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