GOOD & BAD TIMES YEA MAKE MONEY NOW - Posted by Ralph

Posted by Rafael on July 06, 2003 at 19:27:17:

Thanks Ed. Your post help me boost my confidence.

As a roocky, I have a lot to sink in. Persistance, pacience and know how I most learn. lol

Thanks Ed as always ur very helpfull and Most thanks for answering my post soon!!! thanks again :smiley:
Rafael

GOOD & BAD TIMES YEA MAKE MONEY NOW - Posted by Ralph

Posted by Ralph on July 05, 2003 at 23:04:08:

Hi everyone, I been reading some books about making money in RE in Bad and Good times but they just mainly talk about the benefit of having RE in Good times and BUYING RE in bad times.

2000=Bad time for seller and good for buyers.
2003=Good time for sellers and bad time for buyers.

Q1- $$$ NOW my question is "HOW A BUYER makes money buying in a sellers market?"
Q2- $$$ My state is too expensive for me to buy, SHould i buy in another state that I can afford???

Q3- Is anyone expecting the market to be a buyers market anytime soon??? lol

Any advice, opinion, thoughts, comments or info is very much appresiated! :slight_smile:

Re: HOT MARKET and PRECEPTION: - Posted by Ed Garcia

Posted by Ed Garcia on July 06, 2003 at 11:34:40:

Ralph,

I hope that this little piece answers some questions for you.

HOT MARKET and PRECEPTION:

The one thing that working with people on the Internet has taught me is the differences in the market across the country. For me it is also an eye opener. At first I felt just like any other investors in a HOT MARKET because, I was PRODUCT of my ENVIRONMENT.

It was difficult for me to find deals and because of that, after a while you start to fade and give up, because if you?re having trouble finding a deal, and keep hearing that there are no deals out there, after a while you find yourself buying into it.

The things you don?t do in a HOT MARKET, is stop making money on your buy or give up cash flow. I can?t tell you how many people are satisfied just doing a deal to do a deal at break even, and assume that they?re going to make their money with future appreciation. Pass, that?s not the way to do it.

First of all let me say that I own property outside of my own state and am not afraid of investing in another state. For me it would have to be a respectable size deal, not a house, because of management intensiveness. The deal has to make me enough money that it will justify paying for my occasional visit to oversee it in addition to a good return.

I?ve got to tell you that I got an eye opener at my very first workshop. That?s right, old Garcia learn from his own workshop. On Saturday nights we have an open floor discussion, and each investor can present the deal that they?re doing or any deal they?re having a problem with. That was when I first realized that every investor sees a deal differently. Different size deals, different market, different ways that they would structure their deals, different thinking. For example if you have an investor that was taught the business by doing lease/options. Every time he would see a deal, he would see it through the eyes of a guy who does lease/options and he would try to structure it to do a lease/option. I immediately saw the light and how each investor was trapped by there own limited knowledge or technique.

Now not to make an investor who does lease/options look dumb. If you do a lot of lease/options, you become good at it, even masterful and now your confidence is where you project and the sellers in turn will have confidence to do a deal with you. So this is just one example of what I?m talking about.

We would discuss different ways the same deal could be done and then someone from Missouri, who is drinking a beer, would raise his hand and give you a way to do the deal that was so simple, that you realized that you missed the obvious.

We obviously would talk about the different markets and come to realize that if you were going to be successful in this business and RE investing is a business, you would have to be able to survive in the different markets.

Now for the part of the post you really want me to address, HOT MARKET. How do you handle a hot market? How do you do deals and make money in a HOT MARKET.

I haven?t had a salaried job since 1972. So you can see that I?m a serious investor and don?t play. When I was learning this business the guys that knew it would never give you any information in a million years, in fear that the next time that they see you, you?ll be bidding against them. We didn?t have Creonline and the various courses and information that is being provided. It was us and the street.

I must tell you that a HOT MARKET is going to be particularly hard on a part time investor. The reason is obvious, because they work and have a family to spend time with; they?re not in a position to spend quality time in the street knowing everything that is going on in their market. They haven?t the time to network, canvas, build a reputation as an investor, or spend the time needed to search or find deals. They?ll usually dependent on a Realtor and those of us that are full time we know what we think about dealing with Realtors.

PERCEPTION or ATTITUDE of a real-estate investor is the key to their success. Not knowledge, Not Market Place. If you have the right attitude you?ll gain the knowledge, and you?ll learn how to survive the various markets.

Lets talk about PERCEPTION and ATTITUDE:

Two-shoe salesman from competing companies in the early 1900’s were told they were going to the continent of Africa to open up a new market for their respective companies. They were to go with a few samples, and while there drumming up business, a steamer would be dispatched with an entire inventory to deliver on the orders.

The first salesman got off the plane, looked around and immediately telegraphed this company.

“Turn back the shipment! There is NO market here. NOBODY wears shoes!”

The second salesman got off the plane and looked around and immediately telegraphed his office.
"Double the shipment immediately! TONS of potential business here! NOBODY WEARS SHOES!!!

Lets talk about PERCEPTION and Donald Trump. Most people see things for what they are. Donald Trump sees thing for what they could be. When you?re in a hot market you need to take the Donald Trump perception or attitude and CHANGE THE RULES.

Don?t buy the way the market dictates, but create a market with in a market.

Now for those of you who will tell me that you can do FLIPS or LEASE/OPTIONS in any market, I?m aware of that but the profits are minimal and you have to do a lot of them and in doing so you now have a job.

Look for other properties that you can make money with that others are passing buy or don?t have the vision to see the up-side potential of.

Example:

Buy a lot and build a house.

Buy land and subdivide it into lots.

Buy a house that is zoned for units and build units.

Buy apartments and convert them into condos.

Find small homes such as a 2-bedroom house in a high dollar area, that could be renovated or a tear down to rebuild to accommodate the comparable larger housing.

Look for opportunities such as apartments with below market rents that will give the apartments upside, increasing the income and in turn increasing the value because when purchasing commercial property you?re buying an income stream.

I could go on with this but I?m sure you?re getting my drift. You need to open your eyes and stop accepting the fact that there are no deals. Don?t listen to realtors, as I said before were all product of our environment and realtors make their living in retail sales, so to find a deal through them will be difficult. When they see how you want to buy, they?ll tell you that you?re unrealistic.

Well this post is 3 pages long and if it helps just one person reading it, it?s done its job.

Thank you,

Ed Garcia

Re: GOOD & BAD TIMES YEA MAKE MONEY NOW - Posted by Ralph

Posted by Ralph on July 06, 2003 at 09:22:20:

Well say Mark and thanks for your input.

I will look for a motivated seller out of town or the State. Reason is a property of $189k 2 years ago cost $688k now in my town (and its more expensive oround town). I know a state near by that property still around the $100k. Everyone I ask for opinion about that town in this area say “its worthless.” “that town is full of drugs” and “its poor city”, “No employment” and blablabla bla bla bla. I drove around and saw, lots of malls, lots of plazas, nice cars, some bad naiborhoods and many more in nice living conditions, granpapas runing with kids, average to clean streets, polite people and some dreasing like if they are visiting from jail. Nice tall moder builings, lots of realy big hospitals, wider streets than where i live in. very few industrial parks, its quiet (so it seems) ahhh also couple recreation places like nice parks, bowling, and so on…

Prices are low (compare to my town) few houses for sell. I wonder HOW CAN I KNOW IF RENT IS IN GREAT DEMAND? I talk to a man on the streets and told me that there was a vecant apptment. Very few rent signs, lots of 2 family, follow by singel and few 3 family houses.

HELP!!! IS THIS A PLACE YOU WOULD BUY!!!
—HOW ABOUT RENT?
—jOBS?
—ECT…?

PLEASE HELPPPP
any info coments or thoughs is greatly appreciated!!!

Re: GOOD & BAD TIMES YEA MAKE MONEY NOW - Posted by Mark

Posted by Mark on July 06, 2003 at 24:43:57:

I deal with motivated sellers ONLY, so it does not matter what the market conditions are.

If there is no level of motivation on behalf of the seller, MOVE ON, look for those sellers that are “don’t wanters” they just want to unload their property and will sell at discount for a quick sale.

You mentioned that your state is to expensive for you to buy, find a seller that needs to sell quickly…job transfer, divorce,can’t afford payments, persons going to assisted living.
probate issues, out of state owners.
These are not easy to find, they are out there.
Good Luck!