Originally posted by @Daria B.:
At first I thought I’m looking at too many properties – but – the properties I am finding are going quick. I start off with 5 and then 2 go to pending so it leaves me with 3. And in the course of a day another is lost to pending.
I keep looking and adding to my list of other potentials that all are within the criteria (ie cash flow, good neighborhood, age of home, etc. you get it, we all have criteria) but the dynamics of the market are wreaking havoc.
I cross it off (still keeping an eye out because the contract may very well just fall through) and look for other properties, otherwise I wouldn’t have anything to assess.
It doesn’t drive me too crazy but I can see it being a nightmare for a realtor (are investor-realtors more understanding and amenable to this dynamic – yes I think so)
The quick assessment now leads me to see if it will be a good investment. I'm learning to get things quicker now that I have a good spreadsheet process to input data. It's more streamlined and the check points are easier so focus is on the bottom line and not too much in the details upfront.
I'm starting to view this as an auction of sorts in the way things are happening.
1-How do you keep up with this dynamic of properties to get out and see them when the cycle of on-market-2-pending can be so quick?
2-Are you looking only at a couple of properties?
3-If they all pan out with your bottom line, do you then choose one? And what if that one then becomes none, you have to back peddle to the other potentials on your list?
4-Are you driving your realtor crazy (albeit if you aren't the realtor :}) with all the switching in/out, IF you are doing this?
What I am learning (still a newbie) as I read REI books etc is that there is one striking difference between REI and other forms of investments. While buying stocks, my sole focus of analysis is to predict how much upward potential the stock has. But in real estates, we don't speculate on appreciation of property but focus on either building capital or cash flow through by value addition.
The reason I mention this is, in stock market during prolonged bull runs (like the current one), I will stay away from buying stocks, sit on cash and wait for drops in market. (Buy when others are selling, sell when others are buying). If you were buying property only to sell when they appreciate, you should stay away from buying right now, sit on cash and wait for drop in prices.
But as I mentioned above, real estate investors usually add some form of value to the end user (renters or buyers) after they buy property. So all you need to assess is if you will get sufficient returns on investment and value added services that you are providing to your customers. This can be % rent of price you pay or monthly cash flow or equity growth etc.
