Need Some Advice (maybe Motivation)
I am beginning in real estate in San Diego CA. I've studied a lot from Peter Conti & David Finkel, including all 3 of there books on purchase option lease investing, as well as I am soon joining their mentorship program for further training and guidance. I heard something alarming though. In conversation with 2 other people (who obviously know nothing about real estate, only hearing this from people like agents they know or what not) who said real estate in San Diego is a small market now, "a low inventory" according to one guys agent friend. For a new investor, though I know they are words of cynicism from unbelievers, I can not help but worry "is this a bad time to get in?" Am I really setting myself up to win if I get in the game at an uncertain time? Maybe I all ready know the answer to this (which is to say the heck with them and go forward, for who cares what these people say?) but I want to see what others might suggest.
I don't live in California, but from what I understand it is a seller's market. There are a lot of people purchasing homes, which drives offer prices up. One of the primary goals of an investor is to acquire property at discount rates and resell or lease to make money. Why would that same home owner sell a property to you for a discount if they can wait one more day and get full asking price? In a seller's market, it is often very hard to come across "good" deals.
However, to answer your second question, the best time to plant a tree is......yesterday. The sooner you get out there and gain experience the better. You might not find properties that are worth your time, but maybe you will. The only way to know for sure is to hit the streets! There are hundreds of ways to make money in RE, so the trick is to figure out what works for you and your area.
-Chris
[addsig]
I am sure that the area is a "low inventory" market right now. Most of the nation is that way. Mainly becasue of the introduction of the FSBO companies and the influx of investors like us. Both of which are extremely hard to track for the databases, and neither use the MLS on a frequent basis.
I will say that it isnt as easy as it was in the 80's to buy, but by no means is that a reason to stop looking. There are plenty of deals still out there. They will be unconventional, and harder to find. The best deals arent easy to find though.
If your target is Single Family Homes, I would suggest looking at REO's as the lending boom has slowed down and the foreclosure boom is just starting. A lot of the bad credit loans that were made both from private and higher risk financial institutions are starting to crumble, and opportunities await you. In the commercial end, a lot of businesses are closing due to computers making the work more easily done in house, and the economy faltering. In turn properties that had mortgages or leases are becoming available. If that isnt enough the developing market is at an extreme high right now, so new construction needs investments. In short if you think that the market is bad in your area, you need to change your strategy, look at the opposite end of each spectrum. IE Presales(condos, business units) , foreclosures, expired MLS, Private mortgages, tax deed sales, Estate sales, etc etc. Just remember that negative thinking will end up with negative profits. And the people that are complaining are usually the ones that either havent attained much, or have been spoiled by the 80's and havent changed with the times.
Good Luck,
Kyle
Kyle,
Those were some GREAT words of motivation!
Thanks for your imput Kyle. I really was worried about this issue, but I know there has to be plenty of deals out there to come by. It won't be the easiest per se, but armed with the various ways of investing with little or no money what is my risk initially? Nothing. Different actions will yield different results, and the same actions, the same results. With this understanding that it may be challenging, I am going to go in with a positive attitude, certain I will prosper, and see the challenges as a way of fine tuning my skills as an investor for future periods when it isn't such a rough market. Thanks again.