Mitch Goldstein | Coach Mitch | November 19th, 2010Coach Mitch’s REFLECTIONS™
When is the best time to buy real estate?
What a great question. I have never heard anyone ask that question, have you?
Think about it. Everyone asks, “When is the best time to sell?” That’s the way we think. We don’t think in advance. We wait until we own something, and then we start thinking about selling it. What if that process were reversed? What if we started to think strategically? What if we were to take lots of factors into consideration to make a plan (grand strategic vision) and made tactical decisions (individual parts of the overall plan) based on the question -When is the best time to buy real estate?.
TCW = The Conventional Wisdom
Isn’t this what we all are drawn to? We can’t help it. Humans are pack animals. We naturally, spontaneously, “follow the leader,” and we do it with enthusiasm, convinced we are doing the right thing, “because everyone is doing it.” If one person does it, then we all want to do the same. If one person thinks it, we all look at it seriously. The stock market is a great example because spikes are created and driven on rumors more than economics.
We are driven to “join the crowd.”
Because, “no man is an island.”
“It’s OK, we all do it.”
We go, “like moths to a flame.”
So don’t worry, just “go with the flow.”
Because “we’ve always done it that way.”
The Conventional Wisdom is compelling
There are times when the conventional wisdom works, when doing what the group wants is valid. In retail, you want to have the goods that lots of people want to buy. Car dealers, antique dealers, banks, gas stations, etc. clump together so that more people will come to that area and buy. They will have more competition, but they will also have a larger number of potential buyers, and each seller will rely on their uniqueness to stand out.
Contrarian thought
This is where I live.
I don’t mind competition, in fact, I love to compete; it gets my juices flowing. But, long ago, in the late 70’s, I asked myself, “Why compete?”
I had already shown my strong selling skills, to myself and to my employers. Therefore, I no longer “needed” to prove anything to anyone. From that moment on, I became a contrarian and focused on looking where the conventional wisdom was not looking.
I didn’t do this on a lark. You don’t go against the conventional wisdom for spite. It must be done with thought, preciseness, and with end goals in mind. Sun Tzu, the Chinese general who authored the famous, “The Art of War,” says to win the battle without fighting is the height of generalship, the culmination of good strategy.
With strategic thinking in mind, I ask,
When is the best time to sell real estate?
We all know that from spring to the start of school is the best time to sell real estate.
Therefore,
When is a bad time to sell real estate?
Anytime other than spring through the beginning of school. Doesn’t that make sense?
I hope you get the idea.
When is the best time to BUY real estate?
Anytime at all, but it is best to buy anytime other than spring through the beginning of school. All other times are better to buy. But, there is a rank to the best times to buy.
The very best time to buy = from Thanksgiving to New Year’s.
2nd best time to buy = from New Year’s to one month prior to Spring.
3rd best time to buy = from just after school starts to Thanksgiving.
Right now, is the very best time to buy.
Sun Tzu c500-320 BC Chinese general/philosopher
“So in war, the way is to avoid what is strong and to strike at what is weak.” Sun Tzu
Even though I was seeking motivated sellers, the reality is that almost all “motivated” sellers are not desperate. After years of looking at deals at close to retail, 70% ITV, Investment To Value, which I thought too much to pay; I discovered tax delinquent property investing, an area of real estate investing where I could consistently find sellers who were in a weak position, who had to sell, and who also had lots of equity so they could give a great deal. This was the perfect buying situation, if I could convince sellers to go along.
“Whoever is first in the field and awaits the coming of the enemy, will be fresh for the fight; whoever is second in the field and has to hasten to battle will arrive exhausted.” Sun Tzu
As a buyer, you are like a cat, hunting for prey, waiting to pounce on a suitable situation. The seller believes he has a unique and worthy property. But, he also knows that he is in a precarious financial position. He is hoping for the best but is not in a position to demand. You are probably his only potential buyer. You are seeking just such situations. You have picked you field carefully and are ready for battle.
“To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting.” Sun Tzu
The seller (the enemy) always has selling the property on his mind, but he also knows that the holiday season is when buyers are consumed with other matters. Buyers are not looking at property during the holiday season. Sellers still have mortgages to pay, winter heating bills to pay, their own holiday expenses, stress from their own stretched finances, stress from knowing that the Spring selling season is many months away… The seller is weakened, his resistance is lowered.
“The clever combatant imposes his will on the enemy, but does not allow the enemy’s will to be imposed on him.” Sun Tzu
You market now, when no one else is looking because other investors are engaged with the holidays. You have no competition. You are contrarian. Your strategy is working. Now is the exact time when your forces are at their most potent and seller’s emotions are at their most vulnerable. Strike.
You determine the level of pain the seller is in and choose to either make a ridiculous purchase offer, or ‘Just Say “Yes” ‘ and “this is how we’ll do it. I’ll give you $1 for an option…”( Coach Mitch’s “famous $1 Option.”™ ). Purchase or option, either way – you win.
You are in the driver’s seat. The seller must sell, but you have many, many other tax delinquent properties to look at where the sellers are in a similarly precarious financial position. The seller needs you. You have chosen the field well.
“So in war, the way is to avoid what is strong and to strike at what is weak.” Sun Tzu
We come back to the central idea. Until the spring, all the market forces are with you, the buyer. That is why now, right now, it is the best time to buy investment real estate. Right now is the time to invest.
Coach Mitch’s “Ridiculously Simple System…”™ is the single best way that I know to consistently find “the most motivated of all motivated sellers.”™
See Coach Mitch’s “Ridiculously Simple System…” ™ for details.
Go forth and multiply.
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