One of the old adages in real estate is “You make your money when you buy, not when you sell.” Meaning that the acquisition price of a property is just as important as the sales price. Most investors know this and seek to obtain the best price when they buy as possible.
What is an investor to do when getting a good deal is hard to find?
WSJ.com is detailing the difficulty that smaller investors are having with finding properties to invest in. Much of this is driven by large investors that have continued to poor institutional funds into commercial real estate.
This is forcing smaller investors to go after properties that need more significant repair and turn around.
Another trend in the market is competition over the few properties that are available for sale. Commercial Investment Real Estate magazine, details the struggle that buyers are having over multi-family properties. Competition from buyers over the few properties available has caused prices to rise benefiting the sellers at the expense of the buyers.
Selling Investment Real Estate
If you are looking to sell investment real estate, this would appear to be a good time. The combination of low interest rates and strong investor demand puts you in a good position to reap a maximum value for your current investment.
The downside is that you might not be able to find a suitable replacement property if you are going to attempt a 1031 exchange.
Buying Investment Real Estate
If you are looking to buy investment real estate, you will have to be looking for the diamond in the rough or adjust your return requirements down. Properties that require good management and creativity can provide strong investment returns given a long-term investment horizon.
Feel free to call with any of your investing questions or for assistance at 925.385.8798.