How Do You Pick Properties in an Anomaly Market?
The conditions that real estate is facing right now can only be described as irregular: the free market is not working freely. Banks are holding properties and the Fed has not mandated the sale of these properties. Property owners have lost their equity. Short sales abound and foreclosure is at an all-time high. Turbulence and confusion have created an anomaly market.
Ordinarily, real estate is a market that's imperfect. But even in an imperfect market, prices tend to be somewhat consistent or at least close to uniform. There are comparables that are developed by appraisers that help stabilize the marketplace. But this economy throws all of that out the window.
I've described owner distress, property distress, and market distress in previous columns http://tinyurl.com/3alujq5 and these are the factors that are weighing very heavily on the market. Because of the various amounts of distress among property owners and among properties, it's very difficult for appraisers to create comparable situations when an owner is in personal financial distress, such as a divorce, an impending foreclosure, or other financial disaster. Perhaps the property owner has a business where a loan has been called, which has a domino effect on the business owner’s real estate.
An anomaly market makes it very difficult for sellers who are not professionals to stay rational. When they're under the pressure of impending foreclosure, divorce, or other personal situations, they will frequently sell their properties at prices that may not come close to matching the market price. This is why professional buyers and sellers have the edge every time. If you are not a professional buyer of real estate, you may not know the price that a property “should” sell for. You may think you know, but do you?
If you want to take advantage of the opportunities in this anomaly real estate market, then you need to align yourself with a professional or a professional group of buyers.
Many groups have been set up to take advantage of these turbulent times. These companies have set up funds to acquire distressed real estate assets nationwide. These companies look for properties that have a value-added opportunity associated with them. They rehabilitate properties that need cosmetic or other simple types of repair, so they can turn them over and maximize the return on investors’ capital. The goal is to buy low and sell for a moderate price in short order.
If you are interested in learning more about how you can take advantage of this market, contact a professional property picker and manager. In the meantime, if you're not a professional buyer of real estate, be careful, because the anomalies which work great for professionals, can sometimes eat non-professionals alive.
Our readers enjoy reading what others think. Send a link to this blog to one or more of your friends and get them to become one of our subscribers. This will help us to expand our circle of influence and allow us to share this and other great material with your friends. Thank you for being one of our loyal readers. We appreciate you and we are rooting for your success.
We are in the real estate syndication business. We invest in properties and we offer seminars to assist others in acquiring the skills needed to raise capital (syndicate capital) to acquire properties. Imagine knowing how to pool funds to purchase any real estate investment, whether it is for single family, multi-family, commercial or another kind of investment property. For full information, go to www.syndicatefast.com.
Our real estate company is Bullseye Capital (www.bullseyecap.com ), a full service real estate company that supports owners and buyers of real estate assets with brokerage, leasing, property management and mortgage services. We also provide investment opportunities to accredited investors who want to take advantage of the opportunities.
About Joel G. Block, President of Growth-Logic, Inc. Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenue and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker, advisor and astute investor. To bring Joel into your company, please visit http://www.joelblock.com.
Ordinarily, real estate is a market that's imperfect. But even in an imperfect market, prices tend to be somewhat consistent or at least close to uniform. There are comparables that are developed by appraisers that help stabilize the marketplace. But this economy throws all of that out the window.
I've described owner distress, property distress, and market distress in previous columns http://tinyurl.com/3alujq5 and these are the factors that are weighing very heavily on the market. Because of the various amounts of distress among property owners and among properties, it's very difficult for appraisers to create comparable situations when an owner is in personal financial distress, such as a divorce, an impending foreclosure, or other financial disaster. Perhaps the property owner has a business where a loan has been called, which has a domino effect on the business owner’s real estate.
An anomaly market makes it very difficult for sellers who are not professionals to stay rational. When they're under the pressure of impending foreclosure, divorce, or other personal situations, they will frequently sell their properties at prices that may not come close to matching the market price. This is why professional buyers and sellers have the edge every time. If you are not a professional buyer of real estate, you may not know the price that a property “should” sell for. You may think you know, but do you?
If you want to take advantage of the opportunities in this anomaly real estate market, then you need to align yourself with a professional or a professional group of buyers.
Many groups have been set up to take advantage of these turbulent times. These companies have set up funds to acquire distressed real estate assets nationwide. These companies look for properties that have a value-added opportunity associated with them. They rehabilitate properties that need cosmetic or other simple types of repair, so they can turn them over and maximize the return on investors’ capital. The goal is to buy low and sell for a moderate price in short order.
If you are interested in learning more about how you can take advantage of this market, contact a professional property picker and manager. In the meantime, if you're not a professional buyer of real estate, be careful, because the anomalies which work great for professionals, can sometimes eat non-professionals alive.
Our readers enjoy reading what others think. Send a link to this blog to one or more of your friends and get them to become one of our subscribers. This will help us to expand our circle of influence and allow us to share this and other great material with your friends. Thank you for being one of our loyal readers. We appreciate you and we are rooting for your success.
We are in the real estate syndication business. We invest in properties and we offer seminars to assist others in acquiring the skills needed to raise capital (syndicate capital) to acquire properties. Imagine knowing how to pool funds to purchase any real estate investment, whether it is for single family, multi-family, commercial or another kind of investment property. For full information, go to www.syndicatefast.com.
Our real estate company is Bullseye Capital (www.bullseyecap.com ), a full service real estate company that supports owners and buyers of real estate assets with brokerage, leasing, property management and mortgage services. We also provide investment opportunities to accredited investors who want to take advantage of the opportunities.
About Joel G. Block, President of Growth-Logic, Inc. Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenue and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker, advisor and astute investor. To bring Joel into your company, please visit http://www.joelblock.com.
Comments (2)
Even after examining all the evidence though at some point you just have to make a gut decision otherwise your just analyser
David Wedemire, almost 14 years ago
Solid post Joel. It is difficult to know whether or not you are "catching a falling knife" if you don't know the market well. Not only does one need to be a professional buyer, one also needs to know the market very well to decide if something is under-performing or simply a dog asset.
Bryan Hancock, about 15 years ago