Suriving in a SLOWWW Real Estate Market

By
Real Estate Technology with SparkRental

funky dome rental propertySmart investors can earn a living in ANY real estate market, and being a smart investor is not as difficult as it might seem. Here are a few practices for bringing home the bacon as a real estate investor, even if your real estate buddies shout that the sky is falling.

 

Practice 1: Foreclosure Auctions

You know why the media yells and screams about foreclosures? Because they sell for less than their MLS-listed counterparts, so when there are too many they can drag down the market. But they’ll ALWAYS sell for less, because there are so fewer buyers. See the entry below about buying real estate at foreclosure auction, and find a good discounted property.

 

Practice 2: Renovation

You don’t have to be a veteran contractor to renovate shells (though it will still save you money if you are). Fixer-uppers sell at a discount, because so few people are willing to take on the headache, which means you create equity by buying dilapidated real estate and improving it. You’ll need a bank or hard money lender who offer rehab loans, a solid contractor, and the patience & funding to wait a few months for your pay check. You might even consider buying a shell at a foreclosure auction and then renovating it, effectively creating a double discount.

 

cool real estate picturePractice 3: Find Your Inner Landlord

Let’s be honest: being a landlord is not for everybody. It requires capital, patience, and comfort with a non-liquid, term investment. That being said, there’s no better way to thrive in a cold market than to acquire while it’s cold and unload a few years down the line when the market’s hot. And let’s face it: being a landlord is not without its perks, particularly cash flow spilling into your checking account each month (see below for maximizing cash flow through rental properties).

 

Make sure you have an airtight rental agreement, and (here’s where the business plan really gets strong) consider the following model: buy a shell at foreclosure, renovate it, and then keep it as a rental property.

 

You don’t need me to tell you that slow markets are the time to buy, and while you can still make money selling (see above), you stand to earn a lot more if you have the patience to wait. Play your cards right, and this slow real estate market could be the best thing that ever happened to you.

Comments (6)

Mike Wong
Keller Williams Realty Southwest - Sugar Land, TX
Realtor: Commercial, Residential, Leasing, Invest

Great blog Gregory. Excellent tips for all the investors looking into the market right now.

Nov 16, 2008 04:20 AM
Roxanne Schilling
Coldwell Banker Lake Tulloch - Copperopolis, CA

But you have to have money to begin with to buy anything.  I would rather represent other buyers out there in purchasing a foreclosure or at an auction.  You can survive.  You just have to make more phone calls, etc.  I have been trying to put deals together with buyers and sellers that the properties are not even on the market yet.  You have to just keep plugging away.  I am trying to convince myself.

Nov 16, 2008 04:20 AM
Michael Leahy
Infinity Arts - San Diego, CA

Makes sense Gregory

Nov 16, 2008 04:56 AM
Mick Michaud
Distinctly Texas Lifestyle Properties, LLC Office:682/498-3107 - Granbury, TX
Your Texas Lifestyle is Here!

Love the house pics.  These look like something some of my clients like to build. 

Landlording in this market takes nerves of steel and deep pockets. Home owners are not the only ones to be defaulting in today's market.

 

Nov 16, 2008 05:18 AM
Greg Wilson
1st Cornerstone Realty - Schaumburg, IL

Hi.. Thanks for your post.  Its always good to see other people's perspective and tips.  Keep the posts coming!  I enjoy reading them and learning something new.

Nov 16, 2008 05:38 AM
Randall Schrader
Competitive Insurance of Dundee - Dundee, FL

I want to see the comps for your pics when these are sold.  LOL

Nov 16, 2008 06:16 AM
Anonymous
J Barikhan

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Nov 17, 2008 06:13 AM
#7