Buying in Today’s Real Estate Market: The Shoe’s on The Other Foot…and it HURTS!
I’ve had an eagle’s eye view of the changing landscape of the Phoenix real estate market the last few years, and I have to admit it’s been nice. Buyers clamoring over each other for our properties starts to make you feel like a sinister character from a Disney movie…”Hahahaha, minions! Fight for this dilapidated abode!” (as I throw my head back with a belly laugh and bang my staff on the ground.)
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However, I’ve been hunting for a small multi-family property, and decided to use MLS as a source. “Why not?” I thought, cradling the thought that I am an experienced real estate professional, I should be able to scrape a deal together easily, right? And then reality set in.
Ever seen that scene from Boiler Room where the newbie is waiting in the lobby, having arrived for the interview of a lifetime? The synopsis of it is, there’s many well-dressed, aggressive, young men sitting around waiting for the same job, and he purveys them. His curiosity gets the better of him and he sneaks past the lobby and covertly opens the door to the trading-floor like room where the main business is done. In an instant the yelling, cursing, siren of the telephones pierces the calm and he’s taken aback at how wild it is, in just a glimpse. THAT’S what hunting for a cash-flowing multiplex here in Phoenix has felt like lately.
Being privvy to both sides of the transaction now, and being somewhat war-wounded (not really, just looking for pity I guess), let this limping soldier impart some insight if you are also in a hot market. Or, simply use this as fodder for your own entertainment. It’s ok…I would too!
One thing I’ve learned: when you get a lead, scramble.
Whatever you’re doing, stop and put an offer together. Now. Showering? It can wait. Cooking dinner? Let it burn. Personal moments with loved ones? They’ll understand…it’s your financial future at stake!
I get MLS alerts for properties I may be interested in, filtered by the parameters I’m looking for. What’s nice is that as soon as they hit the market (or any other status change I’ve indicated it to send me), I get them instantaneously. Somehow, when a property hits the MLS that makes any sort of sense to anyone out there in Buying Land, offers seem to have appear instantly (or as I imagine it a room full of monkeys shouting and typing and faxing, with a main monkey slave driver…yes, this must be where all those offers come in from so quickly!!)
I’ve had it happen several times that by the time I pick up the phone to ask if they have any offers (this could be less than 30 minutes of it being listed), there’s multiple offers. I’ve literally been on the phone with a receptionist asking the details and she started saying “Oh, here’s another one. Actually, another one just came in..” her voice just trailed off and I knew my beaut was a goner. (the property, not the receptionist.)
If you’re lucky enough to get an off-market deal, treat it the same way, though. Hustling is one thing, the name of the game right now is basically, sit by the phone and tape a fax machine and computer to your person.
Maybe I’ll Just Take my Ball and Go Home
Like a spoiled child, I’ve had instances where I felt like I should just pack up, turn my back, and let the other kids have their stupid homes, I mean toys. Who wants to play with them anyway, bullies!
But, the tortoise’s wisdom kicks in and I know real estate is a marathon, not a sprint. Given, there won’t be stellar opportunities at today’s pricing forever, but really, this is all just a numbers game.
Deep breathing, with mantras like “20% Cash on Cash Retuuuurn” and “Cashhhhhh Floooooowwwww” help keep me calm and my head in the game. I keep making offers, but more importantly don’t let emotion get in the way. Finding a few killer deals is better than 10 minimal ones, truly.
There’s a threshold for error in an appreciating market, but you still have to be mindful. When the properties start to get bid up, my numbers don’t make sense, and I know when to bow out. When my marketing sends me off-market deals, I certainly feel even more privileged now.
To the Buyers out there, I feel your pain. And to the Sellers… game on!
What about you, readers? Are any of you in a hot market and have war stories of buying property to share?