Investor · San Diego, CA · Member since 2015 · 23 posts · 3 votes
I've been told through multiple sources that to stay in the game, you better learn to adapt to a changing market and strategise accordingly. When I'm talking to real estate agents in California, many of them have said that SFH are being sold above market value and that in order to get said SFH I need to submit above asking price - how does that make sense when I'm trying to wholesale to flippers and still make profit? Should I move out of Southern California and start looking elsewhere?
Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
10y
I never offer what someone else says I should offer. I analyze the transaction (buying, selling, lending...it makes no difference what type of transaction) and see what the numbers have to be for me to be where I want to be. That's what my offer is based on. Fundamentals that incorporate MY ideal placement in the transaction. If my offer get's accepted based on that, then all is well. If my offer does not get accepted and there is a counter that still is inside of my fundamentals for the transaction, then all is well. If my offer is not accepted or the counter is not acceptable to me...so be it. Next.
Maybe you do need to look at other markets...but you first need to determine YOUR ideal fundamentals. That's my $0.05 worth! ($0.02 adjusted for inflation.) :)
Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
10y
I never offer what someone else says I should offer. I analyze the transaction (buying, selling, lending...it makes no difference what type of transaction) and see what the numbers have to be for me to be where I want to be. That's what my offer is based on. Fundamentals that incorporate MY ideal placement in the transaction. If my offer get's accepted based on that, then all is well. If my offer does not get accepted and there is a counter that still is inside of my fundamentals for the transaction, then all is well. If my offer is not accepted or the counter is not acceptable to me...so be it. Next.
Maybe you do need to look at other markets...but you first need to determine YOUR ideal fundamentals. That's my $0.05 worth! ($0.02 adjusted for inflation.) :)
Care Review Processor · Long Beach, CA · Member since 2014 · 15 posts · 4 votes
10y
I would check other markets within California, lately I've been looking in certain parts of Long Beach and Moreno Valley. Listen to BP Podcast 141: 7 Ways to Find Incredible Real Estate Deals with Chad Carson
how does that make sense when I'm trying to wholesale to flippers and still make profit? Should I move out of Southern California and start looking elsewhere?
It doesn't make sense. I wouldn't make a business decision based off of what one Realtor said. Because there is a good chance they have no clue what they are talking bout.
Loan Officer · Tustin, CA · Member since 2015 · 3k+ posts · 713 votes
10y
Don't get side tracked. There are always real estate transactions out there. Yes, you do need to change with the market and look at other areas. But it constant. People relocate for various reasons and many properties need rehabbing for many reasons.
Investor · Clemson, SC · Member since 2008 · 179 posts · 156 votes
10y
@So Heng thanks for the shout out to the podcast I was in.
@Blanca Wilson I am not in Southern California, but I understand your frustration. I agree with others that have said - figure out your fundamentals and stick to them. I have chosen to adjust my desired profit margin on deals before (ex: $20,000 instead of $25,000), but never make offers based upon what other people are paying (especially realtors who get paid when things sell, not when you make a profit).
I would add that it's critical to study your market prices and activity daily, neighborhood by neighborhood, street by street. When a market is changing rapidly, the most knowledgeable win. You'll also be the first one to notice if that "hot" market begins to cool off and days on market go up, so you can pull back a little bit.
In the end, if you are a buy-sell investor, the only thing that matters is buying low enough so that you can make a profit, cover your transaction costs, and still deliver the property to your buyer at an acceptable price.
Just keep hustling and trying to make that happen.
We are up in Ventura County and my experience is that most real estate agents don't fully understand what investors are looking for. But in any case, if you are looking at MLS properties, you are probably competing with retail homebuyers, investors who may be purchasing with their own cash and not paying financing costs, and/or those that are overpaying in hopes that things will keep appreciating. I would recommend looking for off-market opportunities in addition to listed properties. At the end of the day, the more offers you submit, the closer you come to getting one under contract.
Residential Real Estate Agent · Lakewood, CA · Member since 2008 · 96 posts · 31 votes
10y
Blanca,
I wanted to share my input, yes for the most part what agents are saying is very true in most of So Cal for a retail transactions, and for the most part you may not have a lot of success in assigning the contract to a rehabber like me. There are plenty of deals all across So Cal, but the key is doing your own marketing, door knocking, bandit signs, mailers, networking, finding investor friendly agents who will bring you the deal, then after the rehab they usually get the listing back. This year out of 27 properties rehabbed we only bought 1 from the MLS. The last 4 have come from probate leads that I market to like a mad man that have never been listed on the MLS. This is just my opinion for me MLS doesn't work in my business model, and I had to learn a few years ago not to rely strictly on the MLS or I would be out of business.
Investor · San Diego, CA · Member since 2015 · 23 posts · 3 votes
10y
Thank you all so much for your input. I was getting so frustrated because I was talking to several "investor-friendly" agents that were supposedly investors themselves (landlords) and they were all basically telling me I had no chance competing with retail buyers. After calculating my offers they weren't even getting submitted. Now, I'm not going to bother with the MLS. I'm just going to do creative marketing on my own.
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
10y
Your primary issue is a marketing one. If you rely on others to find your opportunities, such as on-market listing(s) on MLS, there's rarely enough difference between listing price and market price to produce a realistic profit margin in a strong, stabil market.
Auctions and foreclosure sale sometimes produce good opportunities for profit, but again the nearly perfect availability of information among buyers leave much of the high-profit deals to bidders who study and exploit time and missing or erroneous data opportunities.
The alternatives include off-market properties, meaning approaching sellers who have not listed, which includes but not limited to absentee owners, probate, and tracking distress scenarios such as mortgage and tax defaults prior to sale. But these will only be located and converted (sold) by those who diligently work directly with the principals.
I believe the best plan is to learn how to market directly to principals, become good at selling and working with people, and especially learn how to solve problems that others either cannot or are unwilling to solve themselves. That's where the money is.