RobinsonRealty.net/ Blog

I am so glad you asked!!

The Real Estate Market is like any market or should I say jungle, the strong survive.

It’s not the only way, but it is the best way to get the best deal is to be a cash buyer.

A cash buyer with a knowledgeable agent can buy R.E.O. from the bank a number of ways.

The best is for the cash buyer with a lot of funds, usually starting at about $5,000,000.. You provide proof of funds and they give you a list of properties in the areas you choose. You can buy commercial or residential properties. For five million, depending on the area you should end up with ten plus properties at 60% of “B.P.O. (Brokers Price Opinion). That means you can put them on the market and after commissions expect to net at least thirty percent more than you paid. This could be some very fast money for someone who wanted to sit back and cash checks.

The next best are the single house deals. Some are auctions and some are just regular MLS. In the Auctions you bid and can often get a great deal. I just negotiated a deal for a client and they now own a rental in Agoura, CA over 3000 sq. ft. that I comp at $780,000 and paid $634,000.. Auctions can be very good. MLS is the main market everybody has access to so if you want to exceed you need to be pre approved and fast. Or we go for overpriced turkey’s that have been sitting and try and work a good deal for us. When you are ready to buy we just have to take the pulse of the market and your situation and figure out what is going to work best for you.

After that it’s mostly finding good properties that you can easily add value. I could write a book on that one, but a couple of good ones are; a house on a busy street that you add a wall in front of the house with a fountain and kill the noise of the street making it much nicer. Or buying with a garage on a back alley and building the garage into a rental.

I had a client that loved adding a bed and bathroom to 2+1′s, a real cool plan done correctly.

Buying a house at the end of a block of multi unit properties and converting it to units a very profitable plan. Let me know what you like.

Other than that negotiating the best deal. Finding out what’s important to the seller and hopefully trading it for things you the buyer don’t want. Usually this involves you getting a lower price by closing sooner or later, renting it back to them for some time…..  A good agent will find out what motivates the other principle and help you work out the deal to your advantage.

It takes a little time to talk to someone and figure out what they are thinking and what will be the best way for them to go.

Sometimes you want to time the short market. Buy in the fall or winter and sell in the spring. Waiting for the top or bottom rarely seems to work, and if it does it won’t be very often you will make money in Real Estate.  I have seen people sell because they thought it was the top and rent to wait to buy. The market kept going up and they spent their money while waiting. They could have made a lot of money not waiting and wasted it.

Whenever you buy real estate prices seem very high. Generally a year or five later that same price seems very cheap for the same house.  To make small money you take no risks and bank it. Any investment has an element of risk. You could put your money in a bank right now at about 1% interest. If the bank went bust you could lose your money. But unlikely. So small return. Buy stocks with more risk and you can get more return. Buy a house with say $20,000 worth $500,000 and live in it and enjoy it for about ten years and I bet it is worth around $800,000.. Not bad turning $20,000. into $300,000 and not uncommon.

Your questions and comments are appreciated.

Best

Scott