OK I need to vent and please join me or calm me down >:(
Apparently everyone and their investor friends are bidding on houses here in Georgia. I’m bidding, very reasonably for what I need to make, on houses which have been on fire, serious plumbing issues, or a dead body somewhere in the house – these are not great areas.
I don’t shy away from the houses in need of serious work (I perfer them), the problem is EVERYONE is coming in at retail – there is no way on earth they can make any money. I was just turned down by a bank on their foreclosed property because, “we’ve only had the house on the market for five weeks, and we think we can do better,” and they will in this climate. This house has MAJOR issues.
Talk me down people – I’m very mad at those who have no clue. This is NOT an area where the values will go up at the rates of Florida or California. It’s making me sick. I didn’t have this problem before 8)
Should I just pull back and wait for them to be foreclosed? Other ideas?
My initial thought is what you mentioned…wait for these idiots to be foreclosed on.
I’ve never invested in a climate like that before. It would be hard to take if what I was used to suddenly shifted in that direction.
Our background has been in rentals, and we’re getting ready to explore other options. We’ve decided that we’ve just pigeon holed ourselves a little too much and need/want to diversify to other avenues of Real Estate investing.
Are you open to investing in other geographic areas? How are you finding your properties? The investors I know on the coasts are resorting to buying properties in other parts of the country where things actually cash flow.
I’m in CA, and you’re right the prices here are EXPENSIVE!!! properties that need between $40-$60 K in rehab are going for between $140-160K, but on the turn side, you can make $300K when are ready to sell.
I am new to this and am in the process of starting up a business that is not real estate related. But once it is up and running I would like to jump in so take my “advice” for what it is worth…
However, you live in, have worked in, and know the area that the upstarts coming in at retail, speculating on an upswing in the value as seen in Florida and California. Ride it out, do the deals that work for you, then wait for the foreclosures to happen. It sounds to me like an artificial bubble is being created in your area that the market will not be able to sustain.
A thought tho…how about talking to a few of these folks paying retail and see if they no something that you may not. Just a thought or two.
I like the idea of talking to the people who’ve purchased houses out from under me at almost retail. I’d like to tell them to their face to make me an extra key right now and to please do the rehab properly LOL.
What I “think” is happening is that the entire world is getting into investment property and they don’t know what they are doing and without a doubt creating a fake bubble. Miscalculating rehab and carrying costs for sure. Georgia appreciation is S-L-O-W. Because I’ve been in SO many houses, I also know there are serious differences in how people do their rehabs. Some of these people are setting themselves up for lawsuits later down the road.
I mainly purchase from banks and the VA – I’m going to change my strategy a bit (thank you Karla!). I’m going right to the courthouse steps. I am a cash buyer so this won’t be a problem, however, buying on the steps brings two problems – a) it’s not as easy to see the inside of a property unless they’ve abandoned it, and b) purchasing on the courthouse steps means you pay your money, but if the homeowner files bankruptcy within 30-days, your money goes back to you, without interest, and it could take up to 30 days from the day they file. My research is showing me that some of these homes going back to the banks I could have picked up on the steps for less than what the banks are holding out for at the moment. Georgia currently is offering up almost 3,000 homes a month on the courthouse steps – many are terrible deals because the lenders have loaned up to 100% of the value, but there are deals to be found if you’re willing to do the research and stand outside for 8 hours the first Tuesday of each month, it never fails to rain LOL.
OK I need to vent and please join me or calm me down.
I’m not going to join you OR calm you down. In fact you probably won’t like what I’ve got to say at all, but you might learn something.
I’m very mad at those who have no clue. This is NOT an area where the values will go up at the rates of Florida or California. It’s making me sick. I didn’t have this problem before.
First of all you’re in an area experiencing CHANGE (Appraisal Principle). If “everybody & their investor friends are bidding on properties in GA”…then values WILL BE going up (Supply vs. Demand). In fact my research indicates Atlanta and surrounding communities are an emerging market. Perhaps values won’t go up at the rates of Florida or California, but as more & more people learn about the opportunity some areas GA has to offer…you’re going to have more, and more competition.
It doesn’t make any sense to get “very mad” at people…besides, sounds like they DO have a clue that CHANGE is coming your way (maybe you’ve missed something).
And it doesn’t matter that “you never had this problem before”…CHANGE dictates you have this problem now. Sounds like you better learn to adapt your investment strategy.
Infowell, I’d be very curious as to where you get your information so I can do more research on the subject of Atlanta and emerging real estate markets. The sprawl here is amazing, with lots more land to develop, and the supply is hefty (especially in places I personally won’t own a home). Tons of people are moving here, because housing is inexpensive compared to other major cities.
Personally, I’m not willing to pay top dollar, sink a bunch of rehab into the property and then wait 10 years for it to catch up to my invested amount. I’ve done well so far following my strategy, but I’m definitely noticing a trend of investors driving up the price of homes in need of serious repair – and my realtors agree. IMO the people paying $90K for a house worth $100K after $30K in rehab are taking too large of a risk. To you they may have a clue and I may have missed something – but they could also be entirely missing the boat, because the cool place to put your money these days is into real estate. Like the cool place was tech stocks awhile back – some did well, some lost their shirts.
My post was a vent – but I appreciate you pointing out that change may be on the way and to look at different strategies.
“Infowell, I’d be very curious as to where you get your information so I can do more research on the subject of Atlanta and emerging real estate markets.”
Tami-
Being in the business for a decade & a half–I have access to a variety of data bases (I can’t recall…are you an Agent?).
One evening while researching Atlanta & surrounding regions…some of the demographic numbers, and other information jumped out at me. I then started researching further & got the feeling that area might be prime for some growth.
Might be a good opportunity to buy & sell within 12 months. A ride the equity elevator & earned income scenario?
This is the everyone doing it scenario. Or what I call “dumb money” when dumb money enters into a market, you know it’s going to peak. These people think Georgia is going to be like California. They think if they buy any thing they can make big bucks latter on appreciation. They don’t count rents or anything. People are in real estate mania, just like Tech stock mania, they think it can only go up. They don’t look at the fundamentals, they don’t care if they are bidding upto or beyond retail. They think they are getting in at a low price. Maybe they are, or maybe they are not. Let dumb people, well be dumb. Maybe in a year or two you will buying these homes at bargain basement prices!
“They don’t look at the fundamentals, they don’t care if they are bidding upto or beyond retail.”
Actually, I find those with this view of the housing market don’t look at the fundamentals. Well…I take that back…they do look at the fundamentals, but they seem to consistantly read the markets wrong. Or they compare the housing market to the stock market, or they cite the Great Depression of the ‘20’s’ or they quote Joseph Kennedy, or the lyrics from a 'Blood, Sweat & Tears song from the ‘70’s’ - ‘What-Goes-Up…Must-Come-Down.’
“Maybe in a year or two you will buying these homes at bargain basement prices!”
Or maybe not. But invariably the Bubblist are always warning…“two more years”–back in 2000, “two more years”–back in 2002…“two more years”–in 2004…
This ranks up there with, “California is going to fall into the ocean someday” (I heard this one back in the ‘60’s’ & actually know a couple who moved to Idaho for fear of the “Coming Big One”).
How bout Y2K? Anybody remember that fiasco?
I know people w/bomb shelters in their backyard left over from the early ‘60’s.’
A comet’s gonna hit the earth (they have before…it could happen again).
I know one collegue who’s dire predictions sometime ago are about to expire next month, and although we’re nowhere near his depressing housing prophecies…he’s still carrying on (now he blames the fact the market hasn’t tanked on the government…“it’s a conspiracy”).
I know another (well respected) who has about 18 months left (revised predictions…based on sophisticated charts & the works). His credibility will undoubtedly be challenged should the time of his latest forecast elapse.
The longer some Reporters & Economist make these silly predications, and the more time that passes…they run the risk of damaging their credibility.