Strategy for Decling Market? - Posted by Peter

Posted by JohnVosilla on August 07, 2007 at 20:32:56:

Still seems like there is a lot more cash in the vulture investor catetgory than the early 90’s downturn. Of course this could soon change especially with credit tighening quite dramatically in recent weeks…

Strategy for Decling Market? - Posted by Peter

Posted by Peter on August 05, 2007 at 17:49:08:

With the meltdown of the sub-prime industry, it seems financing, tightening credit and higher rates are causing more difficulty for retail borrowers to get funding.

How are investors supposed to get their retail buyers and challenged credit buyers financed in this type market?

For investors that “get properties under contract”, is it time for them to offer owner financing to retail buyers, create mortgage notes and then sell at closing to note buyers?? …Or work the shorts sales??..Or work the lease/options ?? …Or just assign contracts to cash buyers or investors?

Any thoughts? Thanks in advance.

paradigm shift… - Posted by lukeNC

Posted by lukeNC on August 07, 2007 at 03:40:03:

In times like these you have to shift to the under market.

There are folks in my area who have bought and flipped to retail buyers for over 30 years. It has never mattered what kind of market there was.

So…sell to those guys. And – the "flip this house / real estate pros / property ladder " guys – these are newbies who have alot of cash and want to rehab. I see these guys down at the courthouse all the time these days.

Those investors have cash and/or easy financing. Use your knowledge to find the deal for them, get paid well in the process.

Re: Strategy for Decling Market? - Posted by Brian

Posted by Brian on August 06, 2007 at 17:13:30:

Find another business.

Any idiot could make money in RE the last 5 years, and many did.

Unfortunately with RE there’s no way to “short” the properties. Most creative strategies won’t work because there’s just no enough equity in the home. There’s an abundance of motivated sellers, but no equity, and that’s what we’re really after.

Seriously, find some other business. RE will suck for the next few years at least.

Re: Strategy for Decling Market? - Posted by StevenS(CPA)

Posted by StevenS(CPA) on August 06, 2007 at 10:02:59:

If you are flipping you need to adjust your holding cost to the market. If you know the home is going to sit on the market for six months go with 9 - 12 months holding cost.

If you’re worried about putting your home under contract and selling the note. Develop your own resource of note buyers.

If you are doing lease options, have a pool of tenants ready to move in and you find them the house they want.

There are was to work every market its all in how you buy into the deal.

I hope this helps.

Re: Strategy for Decling Market? - Posted by Dave T

Posted by Dave T on August 06, 2007 at 07:44:15:

You might not need to change your business practice, just your price point for the properties you flip. If you are flipping $150K - $200K properties, lower your price point to the $75K - $90K properties.