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Overcoming the Winter Blues: 5 Reasons To Be Excited About Real Estate Investing This Winter

by James W. Vermillion III on November 18, 2012 · 8 comments

  
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The dreaded cold months are upon us where real estate slows sales down for the holidays and buyers aren’t buying; they are sitting at home snuggled on the couch, watching a Christmas movie marathon and dreaming of spring.

In the snowy regions of the country, many potential buyers are simply not motivated enough to get out in the weather to see properties. Also, moving in the winter can be tricky depending on the region and is generally not fun anywhere the temperature drops significantly. These factors can make for a long and cold winter, but it does not have to be that way, for real estate investors, there is not a better time to hunt for great deals than right now.

Here are 5 reasons you should be excited about the winter months:

1) Buy, buy, buy: while everyone else is sipping hot cocoa you should be out finding your next properties. With less demand, the ability to acquire properties at a discount goes up, so be ready to pounce on the opportunities. The first property we ever purchased closed just a few days before Thanksgiving, after the buying season had ended and demand had eased for the year. As new investors looking for our first rehab purchase, finding a great deal was critical, and I have no doubt the timing of the purchase contributed to the bargain price we were able to negotiate.

2) Time it right: if you purchase in the Fall or Winter you have just enough time to rehab the property for those buyers coming out of hibernation in the spring. While rehabbing in the cold months is not necessarily fun, especially if you are doing some of the work yourself, the timing couldn’t be better. That first property is a fine example, as we had just enough time to rehab the property and get it on the market for the spring surge.

3) Bargaining power: home owners are not hiring contractors at the rate they were the rest of the year, so guess what, you will have more contractors to choose from and more room to negotiate (they want to buy their kids the hottest Christmas present too). Take advantage of the possible labor discounts this winter. Get several quotes and negotiate the price to achieve maximum returns (never sacrifice quality).

4) On sale: contractors are not the only ones not as busy during the winter months…home improvement stores, appliance retailers and hardware stores see less business this time of year as well, which can lead to some nice sales if you stay vigilant. Some sales may even be good enough to warrant stockpiling for use throughout the year. Last year we started a rehab in the fall and were constantly searching for a great deal on top of the line stainless steel appliances to finish off the brand new kitchen. We decided to brave the Black Friday chaos and were able to save several thousand dollars and outfit the kitchen with appliances that were sure to get the attention of buyers. It’s not just Black Friday though; retailers often have better sales to keep the registers ringing.

5) A time to get started: if you have been sitting on the sidelines waiting to purchase your first property, now might be the opportunity you have been waiting for. With less competition your first property might be one lead away, and your first profitable transaction just around the corner. If you have done the preliminary work, educated yourself on the area of real estate investing you are interested in and are just waiting, stop, and take advantage of the winter season.

With the coming holidays and the long winter to follow, do not view this time as one of reduced productivity. Instead, focus on the benefits the season brings and use those benefits to advance your investing business.

Image courtesy of [Adamr] / FreeDigitalPhotos.net

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{ 8 comments… read them below or add one }

Sharon Vornholt November 18, 2012 at 11:52 am

Great points James.

As a wholesaler, I have found that so many investors get lazy at this time of year. They don’t even want to look at property. I guess it would be nice to be in the position to spend the winter in Florida now that I think about it. I hope things are going well for you.

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James W. Vermillion III November 19, 2012 at 7:23 am

Thanks Sharon…Florida would be nice wouldn’t it! Things are going great, hope they are going well for you as well.

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Kelly P November 18, 2012 at 2:55 pm

This is a great article. And encouraging too! We closed on a house two weeks ago and I’ve been really pleased by how eager our contractors have been to work and the good deals we found on appliances. I was sort of dreading the timing – but it’s worked out well.

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James W. Vermillion III November 19, 2012 at 7:24 am

Congratulations on closing on the property Kelly! Glad to hear the contractors are ready to work…good luck!

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Mike M November 18, 2012 at 9:26 pm

I’ve been in the appliance business all my life & there is no “$1000s ” of dollar savings for rental grade appliances unless you’re believing the high list price as a starting point.

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James W. Vermillion III November 19, 2012 at 7:23 am

Thanks for the comment Mike. I have never really purchased “rental grade” appliances and agree you could not save $1000s. We generally outfit our kitchens with top of the line appliances (check out our website and the pictures of Margate, this is the property I am referring to in the article). That said, you can get good deals all year, but they seem more abundant during the winter from what I can tell.

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Michael November 19, 2012 at 5:43 am

Agreed James. No better time than right now. Especially when the majority of people think its time to get out, that when you need to get in. There’s no shortage of deals out there, at least in my area and from what I’m hearing from others nationwide, seems like its not isolated. True on the contractors as well, now’s the time to get good work done cheaply because they do slow up just a bit. Thanks for the post.

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James W. Vermillion III November 19, 2012 at 7:26 am

There is something to be said for the contrarian attitude in a lot of cases. We are not seeing a shortage of deals, although the market has tightened up in the last 9 months. We are really hoping to take advantage of this winter though. I appreciate the comment Michael.

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