Being patient in this market

[Brian Ellis]

Over the last couple of months, I have been extremely patient. I have made a few offers, but it still appears that sellers are still hopeful for 2021 prices. Stuff is sitting longer, and are less affordable in my area because of the rates. 

I was able to make MLS stuff work a year ago, but nothing is working now. I am really focused on developing my skills in getting off market leads. I have sent out mass emails, with the only responses being negative. Ive cold called a bunch with no luck. Sent out post cards, nothing.

There is one or two deals that pop up from time to time, but it opens the flood gates and were still seeing very competitive buyers still. And I am in no interest of getting involved in a bidding war.

Im just fed up with it to be honest. I made an offer on a probate sale. They were asking 275k, the ARV was around 350k, and it needed 125k in work. I offered 175k and received a call back from the listing agent saying I was out of my mind. I said, well if you're familiar with the ARV then it wouldn't seem so crazy given the amount of work it needs? And his response was: "nobody cares about the ARV".

I would think the market is going to change at some point. I was always the optimistic one in these forums over the years, but lately I am on the opposite side. Somethings got to give, and im still remaining patient and ready. In the mean time I will keep developing skills to help me acquire something off market.

[Leo R.]

@Joe Villeneuve I agree--deals are usually made (not found), and often, this can require some creative thinking...

@Brian Ellis I definitely get the frustration--it has been a very challenging market for buyers for a long time...that may be changing--it certainly seems possible that the market may look very different in the next 6-12 months (we've already seen a big increase in inventory and DOM in my market, so perhaps more and more sellers will start coming back to reality over the next 6-12 months).

As for making deals; pretty much every deal I've ever done had some weird issue that drove other buyers away. For instance, I bought a place that is a fantastic rental (cashflows $1,000/mo), but it has a staircase awkwardly placed right inside the main entrance. The staircase is completely functional, and doesn't really bother tenants, but it turned off buyers, so I was able to get it at a good price.  ...I have another rental that turn-key cashflowed $1,100/mo when I bought it (and today cashflows $2,200/mo) that turned off buyers because it was on a busy street (again, that issue hasn't turned off renters).  ...another time, I found a property with a funky floorplan that was turning off buyers, but I could see that with some fairly easy changes, the floorplan could be made much more appealing--the changes I made transformed the property from a place that would have lost about $400/month into a place that now cashflows $1,200/month!

...and BTW; ALL of those properties were on the MLS, and all were acquired during the worst buyer's market in the city's history!

So, for me, the key has been being flexible and imaginative enough to see the opportunities that nobody else can see, and finding a property that does not work for most other buyers, but which can work for my purposes.

The irony is that we're often told to have a strict "buy box"--which, I think can be a double-edged sword. On the one hand, a strict buy box cuts down on time chasing properties that don't fit your goals, but on the other hand, it can blind you to the types of opportunities I described above... Every time I've bought a property, I've gone into the market with some idea of what I was looking for, but I also had the mindset of "if I find something that pencils out, I'll take it--even if it's not the exact type of property I'm trying to find"  ...and sure enough, most properties I've bought are actually quite different than what I was looking for at the start of my search!

Good luck out there!