I have approximately ten serious buyers who have a home to sell in another state before they can buy. I talked to the relocation person at Gulfstream here in Savannah and she said many of her new hires have homes to sell before they can buy. If you take my situation and consider all the agents in Savannah who are working with buyers who have homes to sell, the numbers add up.
To me this presents an investment opportunity — a risky investment opportunity — one that would require building a trusted network of agents and property managers. It would also require understanding other markets and being able to trust that information.
We all know by now that certain areas are being hit by the national slowdown in home sales. A willing investor could mine this situation for good investments and help break off a little piece of the log jam.
I’ve talked with a local investor and we’ve identified several good investments that will help him, the buyer/seller, me and the listing agent on the other, and perhaps a listing agent on this end. What the investor will need to do is contact local real estate agents with productive businesses and ask them how many out of town buyers they are working with who have homes to sell in other areas before they are able to buy. If the agents are willing to work with the investor, the investor then begins to gather information and perform research on each market where the ready and willing, but not yet able, buyers have homes sitting on the market.
If the home can be bought at a reduced price and rented out until the market changes in that particular location, then the investor identifies a trusted property manager for that area and determines the viability of the rental market. Then it’s a matter of crunching numbers, tax considerations and getting the best financing. This strategy would require a lot of research but it can be done long distance once the right local players are identified.
In a way it would be an exciting, interesting investment strategy because it would entail working with professionals and markets in different locations across the country. In a way, also, it’s risky and contrary to the advice to stick with markets you know — being an out-of-town landlord can have its drawbacks, trust and lack of hands-on management being two. The key would be developing a trusted network without having to physically go to each location.
Many agents now have created internet networks and can be helpful in connecting the investor with this network to get good information and recommendations of local professionals who can be trusted. With technology being what it is, boundaries are quickly being eradicated and long-distance investing is becoming more of a practical reality.
This strategy is not for an investor with a weak stomach and a distrust of long-distance relationships, but I can see it working for an investor who creates and trusts a network of professionals who have been vetted and proven competent and trustworthy.
I now know real estate professionals across the country whom I trust as much as anyone local. There are deals all over the country — with the right system, and with good solid information that can be trusted, this strategy might uncover more good deals that an investor can handle.
It’s just an idea. I will keep you all informed how it works with the investor I’m working with — and maybe someone is already doing this who can advise us on how it’s working.