Is this the right time to buy a property for Buy&Hold ?

Question

Hi Folks,

I want to buy a couple of RE properties (Condos/SFH) for buy and hold. The prices are continuously going up throughout the country. I see that good properties are either under contract and sold quickly. Many people say it is seller market now a days. What do you guys think should I buy or wait and see for the next few months? Please advise. Thanks.

Matthew Irish-Jones · Answer

@Syed Naqvi I will let you in on a secret, no one knows the answer to that question.

You need to formulate a value system that allows you to buy in up and down markets.

We use the following grading system in this order…

1. Location

2. Asset condition

3. Cash flow

We need at least a B+ to advise clients to move forward or to buy for ourselves.

If we are in a C location we want an A for asset

Condition and an A for cash flow.

Steve K. · Answer

@Syed Naqvi they say that time in the market is more important than timing the market and I’ve found that to be true. Only psychics know exactly when the exact best time to buy and sell is, and so for the rest of us who aren’t psychic it’s a pointless guessing game. I will say that waiting on the sidelines is not a good strategy to win the game. Whenever I have worked with buyers who decide to wait for better market conditions, it has not worked out well for them as they just get priced out and miss opportunities. I recommend to determine your buying criteria, pick a good location that will be likely to appreciate/ have resilience during a down cycle, and when you find a good property that meets most of what you’re looking for, buy it! If the market turns and properties go down in value, interest rates will likely be higher and credit markets will be tighter, making it more difficult to buy. Plus most people are too scared to buy when the market is down, especially if they were too scared to buy when the market was up.

Kenneth Garrett · Answer

@Syed Naqvi

It’s all relative.  If you can find a good deal then you have a good deal.  You cannot control the market, the market is what it is.  Don’t worry about what others are telling you.  Everyone has there own strategy.  You cannot duplicate other strategies.  You can follow the concept but at the end of the day you will create your own.

Listening to Brandon Turner and or David Greene is great, but they started at a different time.   You must determine what a good deal is for you.  You can present an investment to 10 investors; some will say walk away, others might say it’s worth looking into and others might jump on it.  When asking about how other people got started, it has to be in perspective.  You need to drill down and get them to talk about when they didn’t have anything.  The way they started might not work for you.  You’ll need to find your own path.  It doesn’t mean not to listen to others, but remember where they are coming from and how the market was when they started.

Good Luck.

Nandy B. · Answer

Hi Syed,

Are you looking for opportunities locally only, or are you considering long-distance investing as well?

I know that long-distance is a challenge. If you have family or friends who live out of state, maybe consider looking into other more favorable market ie the midwest.

I am currently in Denver and this market is growing too costly for me. So I am looking into Kansas and Oklahoma. My parents live in Oklahoma and my mom's sister lives in Kansas, both markets offer great opportunities to meet or exceed the 1% rule for buy and hold investing.

Whatever you chose, do not give up. Keep looking.

Josue Vargas · Answer

@Syed Naqvi Overall I would say I agree with @Steve K..

Analyze the deals very well, if they will yield what you expect now, chances are they will do very well in the future.

Speculation is bad, so know someone who is doing this for a long time in your targeting area and listen to them specially if you are new to the area or new to REI.  Not all places are equal and some areas are more susceptible to market change than others.

Chris Herrera · Answer

@Syed Naqvi it’s always the right time to buy as long as you find the right deal. If you’re in it for the long term and can find off market deals then you should always be prepared to buy if you want to do this for the long haul

Bud Gaffney · Answer

@Syed Naqvi buy and hold! How much will your property be worth in 10 years? 20? 30? 50?

A helluva lot more than right now !

Syed Naqvi · Answer

Thanks Kenneth. Posting the question on forum does not mean I am going to follow what others say. The purpose is to see what other buddy investors are thinking about certain thing or situation and actually this is the primary purpose of the forums. Anyways, thanks again for your response. Take care!

Theresa Harris · Answer

Buy if the numbers make sense.  Can you get a place where the rent covers all of your expenses and it is in a good area?  No one knows what the market will do or interest rates (they have to go up at some point).  Even if prices drop for a bit, if you hold onto the property long enough, the prices will come back.

John Morgan · Answer

We have a major housing shortage so I’m bullish on RE until they build another 4-5 million homes nationwide to catch up. That may take a couple decades. So I’m buying in the meantime.

Is this the right time to buy a property for Buy&Hold ?

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