Strategy ~ Are you crazy to buy in good areas right now?

[Joshua Martin]

Hey gang,

  So this is a general question that I thought I'd get some interesting feedback on (or maybe none), and it's one that some will interpret as procrastination or over-analysis, and I'll preemptively say it's not, it's a question about strategy (and I can't afford A markets currently anyways...)

This is something of a weird time to enter the marketplace, knowing enough investors who weathered the storm, lost a great deal, or acquired their whole portfolio after the crash, I hear about these deals and the ease of finding them, but there's obviously nothing like it on the open market (read MLS) today. And, in fact, after closer analysis, many of the higher end areas look like horrible investments. I mean piss poor with cap rates at 2%, negative cash flow, and properties that will inevitably deteriorate because owners have never heard of CapEx or even property maintenance.

  This question is more with respect to buy and hold (my play), because flippers obviously look to capitalize on strong markets and low inventory, giving a quick sale and maximum profits. But for the 'high end' investors I see time to time on BP who trash 'cash flow' C area investing, when I'm currently looking at the market it genuinely seems to make more sense. 

I was doing on MLS search on one of the A markets near me and analyzing sales between 2010 and 2012 - some properties were selling for 1/3 of what they're currently trading at, and there was a short sale or foreclosure every other listing. If you guys were buying cash at the time you're probably retired now, on a yacht somewhere...

  I've been working as an agent and closed a few transactions with some better ones in the works, but where to put my cash is the question (I don't have tons). I have a C property under contract that needs rehab, I plan to occupy, has a ridiculous cap rate on paper, and should be fine if negotiations come together. But I've talked to some 'higher end' investors recently who said they would've skipped the junkers all together and moved to the bigger stuff, but isn't that a terrible play right now?!

  Are cash strategies, wholesaling, whole-tailing, flipping, slanging real estate (working as agent), or buy and hold C areas the best play in the given market? My 1-2 year plan was buy cheap properties. Recent conversation had me rethinking it. Analysis of better areas has me rethinking their advice. 

  It seems the best advice in the given market could simply be: save your cash.

BUT, who knows when it corrects? Who knows what kind of fall out we see, if any?

I guess one general takeaway could be don't shop on the MLS...

  What are your thoughts?

Best,

  JTM