Dear BiggerPockets members,
As I read the 7 years 7 Figure Wealth Ebook one big take away for me was to buy with a 20% discount. Other books on real-estate such as The Millionaire Real Estate Investor state too that as a investor, you make your money when going in.
At this moment the market where I live is booming and at all the good (and even less preferable) locations people pay more then the asking price. Even apartments that are being build now and will be delivered in 2020, the broker state that you can place a bid! So even if you are lucky to get listed to buy, you cannot buy against the orignal asking price because other people will probably out bid each other.
My question here is how can one apply the 20% discount rule when a market is so heated up. I think the house prices will rise even more so people who pay a premium now will at least get to break-even, but that is gambling in my opinion and not a way an investor works.
Does anyone here have experience in a heated market and still be able to get a discount. Looking forward to your insights and stories! Thanks a lot!
You can get discounts anywhere, but what you are describing sounds like the Bay Area or major east coast metros. When you see a rule like that in a book keep in mind when the book was written, some books are a decade or more old and their numbers that were very relevant and useful at the time have changed. Even BP podcasts from a few years ago are no longer relevant because prices have risen, the investors didn't stop investing because their criteria no longer fit, they adjusted their criteria or strategy. When looking for discounts, you want to look in comparison to other available properties in the market. A vastly overpriced home in Alabama, would likely be a steal in the Bay Area of California