toby mcCosker - Effective Real Estate Strategies for Slow Markets Speeding Commercial Real Estate Sales in Slow Markets Effectively building commercial real estate wealth requires the ability to spot a great bargain and the ability to sell that property well, no matter what the state of the market. The real estate market is notoriously cyclical in nature and somewhat difficult to predict. The market for local and national real estate can turn quickly and it is important for every investor in real estate, from the largest player to the smallest, to have strategies in place for selling properties in down markets. In a hot real estate market, of course, little marketing is required. toby mcCosker has heard the stories of bidding wars breaking out in the residential market at open houses in California and elsewhere. In the commercial world, it's not unusual to have 30, 40, or more institutional and private investors bidding on a piece of prime commercial real estate in a strong urban market. In these kinds of markets, all a Seller needed to do was hang up a metaphorical "For Sale" sign and wait for the hordes of buyers to appear. Of course, these markets do not last forever. Lately, we're seeing some pressure on cap rates as short term interest rates have climbed in response to the Fed's tightening. Those formerly "hot" markets have become "luke-warm" markets and are cooling further. As prices for residential and commercial real estate spiraled ever higher, more and more buyers found themselves priced out of the market. Even the creative financing schemes created by mortgage lenders often failed to close the gap. In hindsight, the downturn seemed inevitable, but many failed to see it or prepare for the inevitable slowdown to follow.
The market will tell you what you property is worth, regardless of what you think. Price the property realistically, especially in a down market. toby mcCosker said that it is important to understand that the value of a particular piece of real estate is derived not only from the underlying value of the property itself, but by market conditions. Offer incentives to attract buyers. Offering unique incentives can go a long way to boost the attractiveness of a particular piece of property and help you stand out from the crowd. Some sellers are including perks like free plasma TV's, vacations, sporting event tickets, and other unique incentives. What's important to note about these offerings is that while they represent a very small percentage of the value of the property being sold, they create traffic, interest, and distinguish you from the competition. Don't overlook the value of curb appeal. How your property looks from the outside is an essential part of marketing, called "packaging." Enhancing your property's curb appeal can often be achieved with little expense. Consider painting, re-landscaping, signage, and minor parking lot repairs. Between two similarly priced properties, the better looking one will probably get sold faster. Real Estate Investment Strategy There are a number of different ways that one is able to make money through real estate. There are a number of options for you if you are looking to invest in the world of real estate. You can actually invest with no money down, try your hand at flipping houses, go through the process of buying and holding (basically you buy a property when the market is low and sell when the market is high), and possibly even sell your own strategy at making money through a variety of methods. However there are some ways of investing in real estate that are literally quite simple and something that could be done by everyone who is trying to make money. As a home inspector there are great opportunities to meet those people who are real estate investors. Real estate investors on the whole are known to be a different group of people. They are known for their characteristic things that they do like driving older cars when they are attending the fanciest parties and going to premiere places even though they are worth millions. Further they are known for their willingness to take risks and to be able to always know that they have some financial security. Some people choose to play the stock market but these individuals are at risk of losing a lot of money if the market falls. However with real estate investment there is really no chance of losing money. There is always something that can be done to a property to make it more marketable and easier to sell.
When you are first starting out it is important to not get discouraged as the chances of making some big mistakes are great and there is a very slim chance that you will go through life without making any mistakes. One popular strategy for investing in real estate was originally coined by Preston Sandlin and is called "locked and loaded." The way that this process works is to be able to take out a home equity loan on your current home or property. After taking out this loan you purchase a home that needs a lot of repairs and can be flipped. The next thing to do is to flip the home, then have the home appraised and take out a traditional loan on the property. Then with the money pay back your home equity loan and use the new home for whatever purpose you have in mind. Since the equity is back into your home you are "locked and loaded" and can afford to purchase a second house to start flipping based on the home equity loan. Further there are a number of different options for you at this point. You can either rent the home that you flipped or put it back into the market and try to sell it for it's newly appraised value. Once sold you pay off the loan and can start investing the money that you made into more houses to flip and make money on. Even though this real estate strategy has been known to work for those who have tired it there is a chance that it might not work for you. Remember not to be discouraged and to keep looking until you find the real estate strategy that works best for you. This is what will help you to be able to earn the most money in real estate investing.