Wading in a flooded market?

2 Replies

My wife and I have recently moved into real estate investing and although we are new we have put in multiple offers since jumping in and its definitely a sellers market.  The Houston market is literally flooded with investors willing to pay asking price or above for flooded homes.  As newbies its definitely discouraging since using hard money to get started really limits your ability to land deals in a white hot market like Houston.  

Don't get me wrong, this wont be one of those "we cant find deals" posts, but more of an appreciation and understanding for the vents unfolding around us. Given that Houston's dropped from #4 to #60 on PWC's best market list, I am considering let everyone duke it out on MLS for these flooded homes and exploring other emerging or under served markets until the insanity subsides.

https://www.pwc.com/us/en/industries/asset-wealth-...

We'll continue to make offers because for every offer we make we learn a bit more about the industry and we like that, but given the market conditions (sellers market) we doubt our hard money requirements will enable us to win many MLS deals. We are giving up on those flooders, and focusing on off-market deals, but we are also looking at other markets in general.

Anyone else dealt with a sellers market or an over saturated market before?  What did you do and were you successful in that market in the long run?

I won't say that I never buy off the MLS, but it is not often that I am able to find deals there where the numbers work or that there isn't an immediate feeding frenzy. For me, definitely off market. Driving my areas is the best. Get a map, Google Earth works but its hard to beat an old fashioned paper map that you can hang up of your local area of interest, your 'farm'. Make a radius around where you live that you are comfortable with, for me I like to stick to 10 miles when possible. Break that circle into pie slices, and you have the beginnings of a route to drive. Make yourself a schedule and hit each section, working your way all around the radius, then start back at the beginning. Drive around in each slice systematically, look for those red and white FSBO signs, I love those. Abandoned houses are good but I've never had a lot of luck turning those into closings, could be that I'm just not persistant enough. Beyond that, make some cheap business cards that say you are buying houses and offer a specific referral fee. Just a couple of things that keep me busy, certainly not a fix all but a good way to get going. Good Luck!

Originally posted by @Ashley Childers :

I won't say that I never buy off the MLS, but it is not often that I am able to find deals there where the numbers work or that there isn't an immediate feeding frenzy. For me, definitely off market. Driving my areas is the best. Get a map, Google Earth works but its hard to beat an old fashioned paper map that you can hang up of your local area of interest, your 'farm'. Make a radius around where you live that you are comfortable with, for me I like to stick to 10 miles when possible. Break that circle into pie slices, and you have the beginnings of a route to drive. Make yourself a schedule and hit each section, working your way all around the radius, then start back at the beginning. Drive around in each slice systematically, look for those red and white FSBO signs, I love those. Abandoned houses are good but I've never had a lot of luck turning those into closings, could be that I'm just not persistant enough. Beyond that, make some cheap business cards that say you are buying houses and offer a specific referral fee. Just a couple of things that keep me busy, certainly not a fix all but a good way to get going. Good Luck!

I honestly figured that the flooded homes would be easy pickings due to the substantial amount of damage to them, but in the end that is what drew everyone out in droves. I agree with you and have decided to abandon any real notion of coming up with a win from MLS and will focus on driving for dollars and working with wholesalers for off market opportunities. Its been a great lesson and I look forward to getting to know this industry more. I did have business cards and a lead capture site posted up and I am also sending out letters to folks who may be having trouble paying their property taxes -- so we are remaining active in this hot market!

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