One of the greatest things about living in the state of Michigan is have all 4 seasons. However one of the biggest challenges to everyone in the real estate and construction industry is when the temperature drops and the snow starts falling. Where others see a reason for business to slow down, we as real estate investors should see opportunity. An exciting benefit to being in a seller’s market is that it’s easy to sell homes. Unfortunately with in an up market more prospectors are out looking for gold i.e. houses. This is why I call late Fall & Winter investment house hunting season in Michigan.
As the “onsey-twosey” fair weather investors retire to their TV’s to watch football and Dancing With The Stars, hungry investment house buyers have a better chance to find opportunity. Here’s the perfect example- late last October and crossing into November, I was able to purchase 5 houses (not in a package) all in my hunting area with ZERO competition. 3 were regular MLS listing with agents and the other 2 were private sellers. How was I able to achieve this? Simple really. I was at the right place at the right time and had the firepower (private money) to close all of the deals. In this particular area the average house like the ones I was hunting were closing for an average price of $110,000. I was able to average a sales price of just over $96,000. My best guess tells me that I was able to lock all f these up due to a lack of competition. Of course I offered on them within a day or two of them being listed, offered all cash, close in a week or two and let the listing agent represent me on all of the sales.
On the couple that I bought from private sellers there was really no magic to either of these either. First of all I marketed directly to the homeowners. When they responded via website submission or phone call I called them back as soon as possible. After a little conversation over the phone I drove out to meet the sellers on both. Before I got there I already knew what they owed, if taxes were current, and who the real owners were thanks to my title company. In very simple terms I was able to explain my all cash offers and get the price on both that I needed for them to work for me.
Again the important part of this puzzle was it was almost November and the weather was getting ugly. Had it been May or June I would’ve been in a battle on all five with other investors…there’s no doubt in my mind.
The moral of this article is to try to set yourself up for success by slightly going against the grain. While some investors are worried about holding houses over the winter it can actually give you the time that you need to finish your rehab and come out with fresh listings in the Spring. On one of the homes I was acutually able to negotiate a 3 month occupancy with the seller who paid $1500 for the additional time. This one I bought through the listing agent and they told me the reason no investors wanted it was because the seller needed to stay for a while. If you can’t figure out a solution to that problem you’re not trying hard enough. Believe me I’m happy that my competition was lazy!