Question, Dealing with a declining market


Up side is that foreclosure opportunites are on the rise but…

Things are beginging to go sideways in the LA market very fast. Even if I close a deal with say “40% equity, as compared to comps” by the time i go to sell say three months-market has droped by 15% (ie 15% of total price) my 40% equity is gone.

The only way to really protect against the current market price errosion is to initialy get a huge discount ie 60/70% equity but those deals are not born buy a market where HO are still believing in the last six months of sales figures…?

Any comments or ideas?



Aaron, this is a great market =, great deals Buy, Buy Buy, dont sell yet use leases, then as the market turns (when ever that happens) sell, sell sell.


So, instead of looking to “flip” the forclosure hold on to it as a rental until the market starts to go up again. This sounds wise assuming that I (you) would only do (rental) cash flow positive deals.

What do you mean by lease (yearly rental lease)??

Remember, this is a great market, we will only pay up to 65% of property value, this insures pos cash flow, enough time for the change in the market. to then sell sell sell Thanks

Hello Derek,

Thanks for the insight. Are you in the LA market place?
If so can I email you directly with more questions?



40% equity :cry: I have looked at dozens pre-foreclosures in Boston area and none of them had ANY equity. All are underwater or barely “swimming”.

I’d love to work a 40% equity deal…