Market Saturaed w/ REI??

Question

Newbie investor here interested in starting with long term buy and holds in the San Antonio market. It seems Real Estate Investing is all the rage right now with a lot of people I talk to. Maybe its the myriad of TV shows? Either way, how saturated is the market with people like me trying to find "deals"? Should I expect to be outbid/outsmarted by the big time investors? How long should it take me to find a "deal"?. Thanks in advance...

Dev Horn · Answer

I agree with John and Thomas above.  And YES, the market is saturated with Re investors if you consider all the newbies.  But the reality is, only about 10% of all those who call themselves investors are actually doing advertising to find deals, and in this market, if you aren't using paid media, you are not in the main flow of the deals.  Yes, you can find a lead on Craigslist or wherever but that's really where you will battle with the other new guys - in any "free" media.

John was also right that most offers (from investors) that are too high are usually never going to see the light of day - in other words, those deals often fall thru when the wholesaler realizes that no cash buyer is interested at their price.  More than 50% of the time I get outbid, the deal comes back around because the buyer couldn't close.

Even tho you're new to this, you can still be smart in the way you play the game.  Make sure you have (or get) a very deep understanding of real estate AND finance.  And if you don't have a marketing budget, do the free and cheap marketing but as soon as you score a deal, reinvest as much as you can into marketing.  LEADS are your lifeblood - there are no DEALS without LEADS.  As soon as  you shut off the marketing, your leads will trickle to a stop and you'll be done...

Last, in regard to San Antonio... in 2014, we got more inquiries about licensing WeBuyHouses.com in Bexar county than in any other county in the entire U.S.  We already had a guy there, but we could have sold that market another 10X last year.  So, in my opinion, San Antonio (Bexar) may be the HOTTEST REI MARKET IN THE UNITED STATES.

That said - most sellers seek multiple offers.  Even if they are already reaching out to us or another big player in that market, they may respond to your offer as well and you can get your fair share of the action.  It's probably not going to be via "free" marketing, but you can start to get your offer out there if you are creative with what you have.

Good luck in San Antonio!

"The man who stops advertising to save money is like the man who stops the clock to save time." ~ Thomas Jefferson

Martin Yung · Answer

Just curious, if the market is so hot? Why there is still off market deals around? Why don't the desperate sellers list it with an agent and get multiple offers / cash offers above the listing price in a couple of hours?

Donald Hendricks · Answer

With the likes of Lifestyles Unlimited selling hype from $500-$15,000, they have produced a ton of hungry fish in that pond.

Matt M. · Answer

Dev/Thomas,

Greta advice from both of you. Looks like I need to get my marketing strategy put together quickly.

Thomas Yankovoy · Answer

That's a great area for renting.  I have client's that like to keep properties near Universities to grab that higher rent.  The greater northwest area is highly sought after for buy and hold investors.  Around 100-150k ARV, great school district and houses literally rent over night in that area.  There are plenty of areas in San Antonio that are great for cash flow.  Pick a couple areas of the town that fit your price point, comfort range (war zones vs non war zones), driving distance and target your marketing specifically to that area.  Become an expert in those certain subdivisions.  That way when a deal pops up, you already have an idea of  what the property is valued at and you can pull the trigger that much faster.

Matt M. · Answer

Thanks Thomas. Right now I am still in the education stages. I have the means to begin investing but I need to get better at evaluating potential deal. I have reached out to a few investors here in San Antonio to bounce ideas off of and I have been reading quite a bit. What do you think of the UTSA area in regards to buy and holds?

Thomas Yankovoy · Answer

Right now the real estate market here in San Antonio is very competitive.  If you are just looking at the MLS or any other on-market deals, expect to be in a lot of "highest and best" situations.  I don't think you're going to be outbid or outsmarted by investors offering on properties per se.   I think your experienced investors are just going to be able to evaluate deals and pull the trigger on a property faster than your average buyer.  It's not unexpected for listing agents to receive cash offers on properties within a couple hours of being listed.

Your best bet is doing a little marketing and locating off-market deals.  There are plenty of ways of locating these sellers from letters, door knocking, Craigslist and skip tracing just to start.    The more "fishing lines" you have in the water, the greater probability of catching a motivated seller and turning it into a deal.  It's all a numbers game.

Market Saturaed w/ REI??

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