So what do you do when the market is rising and Investors everywhere have become motivated buyers?
– Jimmy Reed
It seems everyone has just started buying any and everything in real estate and for very high prices. You go to the tax sales and they sell for more than the Tax value and many times more than the comps and the buyers have not even been inside the properties.
Yet I see and know a lot of season investors out there that are diversified in their investing strategies. They like me refuse to become Motivated Buyers. But not everyone has that luxury. The reason is most investors seem to have only one or two exit strategies and that’s it. The most popular has to be Buy, Fix and Flip! More Newbies are entering the arena mainly due to the many popular HGTV shows.
Some of those shows are really good, but many are, well let’s say they do not show the complete picture or as I like to say “all the numbers”. Then there are some that are spot on. My wife and I really like the mother daughter team from “Good Bones” Fact they were just in Texas at the Realty 411 Expo. By the way places and events like that are great for Networking. I even made contact with an investor that might work with me in our Costa Rica Investment project.
Anyway I have been in real estate for 30 years as an Investor. What you need to keep in mind is you need many different exit strategies to be successful in real estate investing. What I mean is you need to know how to wholesale real estate when the equity is there to do so. You need to be able to Buy & Hold properties to generate income on a monthly basis. Buy Rentals right and you always have Cash coming in.
You also need to know the most popular exit these days which is to Buy, Fix & Sell, but you need a lot of equity to do that. Then you also have notes, right now you can get some really good deals on notes. They may not be local or even in my market, Texas but keep an eye out for them. Some notes may have a lot of equity in them, so if something goes wrong you actually may end up with that property and a lot of equity.
So as a real estate investor you need to be able to adjust to the market conditions as they change. Be in properties that have exit strategies that work for you now. You may also consider opening an IRA to wholesale, sell, or buy rentals & notes with. Then you are also building your wealth for the future. Typically with an IRA you are building that wealth tax free. Using a Roth does have some real advantages.
Currently my market has gone nuts. But this can work to your advantage if you want to sell some inventory. Fact I am selling a lot of my inventory, and if possible I try and sell owner financed with large down payments to investors. Their seems to be a lot of Buy & Hold investors in my market now from outside the state.
If you are a newbie to the investing arena it’s going to be tough, however there are ways to get paid. You will first need to know all you can
about real estate investing, so you may need to get some training. You are going to have to be able to move really fast when a deal pops up. You are also going to have a lot of competition out there. That is why I teach my students right now to stay away from list and focus on areas such as Probates that have not even been field or petitioned for probate in the courts yet. There is a lot less competition in Probates and you usually can get more time to work the deal which will help new investors be able to wholesale them.
I started out as a wholesaler many years ago and still do it today. What I like about it is I did not need any money to get it done. Keep in mind if the market does bust then the wholesale game becomes the best exit strategy ever, again!
The main thing is position yourself so you can maneuver positively so no matter where the market turns. If you keep your eyes on the
market and not so much on the quick buck, you can become very successful at this real estate game!
Be Blessed with Success!
Jimmy V. Reed of Fort Worth, Texas has been investing in real estate since 1987. In 1991, he started conducting full-day training sessions on Wholesaling. He then began teaching and mentoring others throughout the country. He is currently the founder of the Fort Worth R.E. club www.1REclub.com and has his own real estate training company that includes Wholesale, Probate, Mentoring & a Biblically based Debt Free training course and more!