“Get Off Your Butt and go Buy a House.” This is a statement I had heard years ago from an old friend when I was complaining about being a broke struggling want to be investor, so I listened to her and did it. That was back in the late 90’s and it was a good ride for many years. But the last few years have been tough on a lot of real estate investors, me included. Many of us had to hunker down, retrench and then recover from our battle wounds. The length of recover was/is directly proportional to the magnitude of your original symptoms. Some people unfortunately didn’t have the financial or emotional strength to weather the storm which I completely understand as I was almost one of them. But now it is time to look forward and plan for the future rather than having to deal with repercussions from the past.
I understand that there will still be a few things we all need to deal with from the past few years as we move forward, but move forward we must, and this is the year to do it. Even though last year was a relatively good year for real estate investing, it was still a tough year for many investors because of all the competition and the lack of inventory on the market. I personally struggled finding rehabs as well. Between my partner and me, we looked at over 400 properties, make close to 200 offers and only got one MLS offer accepted. Looking back, off all the properties that we made offers on that sold, they were all in multiple offer situations. Even though we had plenty of cash to buy and always offered quick closings without contingencies, we were always out bid with very similar offers. Many of those other properties that didn’t sell are still on the market and still overpriced.
So why is this year going to be different? Because we are determined to make it different. I don’t expect the MLS inventory situation to change much this year even though the shadow inventory is still high. The Federal Reserve announced last month that they plan on spending aka printing nearly $45 Billion dollars a month to support the mortgage industry so that they won’t flood the market with inventory. Now that we know and understand this, we need to look at other alternatives aka get back to the basics.
Real Estate Values have probably hit bottom last year and I expect them to stay stable or maybe even improve slightly this year. The economy is not improving, and today it was reported that the economy actually shrunk by 1/10 of a percent last quarter. However, from doing direct mail marketing, networking and other forms of marketing, we have been getting a lot of calls from motivated sellers and they are finally realizing the situation of the market and are willing and able to work with us.
The properties that we have been buying recently are coming from wholesalers who are finding their leads from sources other than the MLS. And those wholesalers are doing very well. Talking to one of our wholesalers this morning, and he just closed his forth lease option deal this month and has made a minimum of $4,000 on each one as a net profit. And we are half way through a rehab that we got from this same wholesaler that will net us over $40k when it is all said and done, and it could even be more, as it looks like the comps are even stronger now, than they were when we originally closed on it.
So I am telling you the same thing my friend told me over 10 years ago, Get Off Your Butt and go Buy a House.