Why I think waiting a year isn’t the best idea

Question

“I’ll wait until next year”

Some of the people I talk to regarding real estate get excited and want to meet up or talk and a good amount of the time they end it by saying “Definitely this time next year im buying a house!”

My question is “Well what specifically are you waiting for?”

Everyone seems to be a mortgage expert waiting on the next 07 crash, perfectly timing the market. The problem is you will most likely never see that again and there is no “perfect time”. It always ends up coming down to the fact that there may be no better time than the present.

If it’s a good deal it’s a good deal regardless of the market. You will often hear ”cash is king” but as it was put to me ”cash flow is king”.

A year from now you can have your first property, have recouped your down payment, be living close to rent free if not entirely rent free, and have built equity in that year. If your goal is to buy your dream home then congrats, you just got one step closer to achieving that by purchasing a cash flowing asset.

It’s likely there is no better time than the present. I don’t have a magic 8 ball and I can’t tell the future but what I can promise you is if you lock in on a good deal and the property cash flows well, you are locked in to one of the most secure forms of investment possible.

Not financial advice, just trying to help atleast 1 🙌

Jeff Copeland · Answer

We actually see the same pattern even here in Florida, where it obviously has nothing to do with the weather.I've always chalked it up to the "back to school blues", coupled shortly thereafter with "oh my God the holidays are almost here". Of course the weather adds a real death punch in many markets up North, but the annual market cycles exist even in the South.

Jeff Copeland · Answer

"Cash is King" is 100% true, at least in the context of sellers looking for a cash offer, and the fact that financed buyers simply cannot compete with cash offers in the vast majority of cases.

Interestingly, I'm seeing firsthand (as in literally today) properties that sat on the market for the past 3-4 weeks during the great inflation scare of 2022 get snapped up with below-asking-price financed offers. These same properties would have sold for cash, above asking, in three days 6-12 months ago.

There are opportunities out there right now.

And always remember, there is always a cost to doing nothing. It is not free.

Michael K Gallagher · Answer

@Jeff Copeland that concept of the cost of inaction is so very often overlooked.  Very few people stop to think what the cost of not doing something is, including myself, so thank you for the reminder.  @Nicholas Salman I have similar conversations often, although mine usually center around the concept of what a "good deal" actually is to the person.

Corby Goade · Answer

Honestly, I don't beleive that "cash is king." The average person can scale and truly change the trajectory of their life and their family for generations with equity and forced appreciation, you just need to be patient, the cash flow comes with time.

That said- I absolutely agree that waiting is never a winning strategy for life. Action is the only thing that matters- if you are waiting for something to happen that is out of your control before you take action, once THAT thing happens, there will be a new thing that you are afraid of. Relevant example- many of the newbies that I work with didn't want to get in to bidding wars and overpay last year. Well, now those challenges are gone in many markets, but the new excuse is that they are waiting for interest rates to come back down. Fear is a real bugger.

People always laugh at me, but I like to say that my favorite business book is "Oh, The Places You'll Go," by Dr, Seuss. That book is honestly a perfect allegory for people who wait for life to happen to them.

Get out there and take some action today- get some!

Marcus Auerbach · Answer

The seasonal opportunity right now is so much bigger than people realize. September, October and November are the 3 best months to buy every year. At least in the markets that have a strong seasonality because of winter like we have in Milwaukee. The stars line up every year for about 2-3 months in fall; this has nothing to do with what year we are in, this happens every year. We still have a good amount of inventory (compared to 2/3 fewer listings during winter), we have lower "fall" prices (compared to the spike we see in spring) and we have a dropping "sold to list" price ratio.

There is an emotional impact on the RE market I observe every year as leaves are falling, prices are falling too. On the flip side, Q1 is always the worst to buy. I have just analyzed the last 15 years of MLS data for a YouTube, and even tough I am well aware of the pattern and have been taking advantage of it as an investor basically every year (80% of my purchases are in Q3 and Q4) I was still shocked how reliable it shows up in the data every single year without fail! Take advantage of it, you'll be happy you did in spring.

Why I think waiting a year isn’t the best idea

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