Rob Swanson’s Real Estate Investing Blog

Is a slower market really a bad thing? It depends on how you look at things and how skilled you are at creating value with your investments. The benefits of a slower market are typically the fact that there are more great deals, much larger discounts and better opportunity for the educated investor to increase profits. Drawbacks include more competition, fewer buyers and little to no appreciation.

Having a clearly defined gameplan is the key to your success in a slower market. You have to know how to get out before you get in. In our business, we operate under a very well defined strategy. We buy and sell 8, 10 or more properties every month and our selling plan goes generally like this and in this order: (1) wholesale – sell ‘as is’ to another investor at a discount (2) retail – fix up the property and sell to a new homeowner (3) rental – fix up the property and sell via a lease-option or hold as a straight rental if the prospect has little to no cash.

In general, a slower market creates opportunities for the saavy investor to become the bank by offering owner financing and increase overall investment returns. When the original sales strategy doesn’t go as planned have your plan B. Educate yourself on various strategies and techniques to find buyers and tenants in slower times and your profits can always soar.

To Wholesale: Start with a good deal. Don’t overvalue the property and don’t try to make all the profits and pass all the risks. Properly estimate repairs and be open with your intentions. Money always finds a great deal.

To Retail: You want to be the nicest house at the cheapest price. Do something to each of your properties that other investors don’t do. Find your niche by creating value and setting your properties apart from the pack. Then – price it low. “I have yet to find an investor that lost money taking a profit.” is a direct quote from one of the investors that has invested nearly $1 million dollars with me and a principle we live by. Don’t get greedy. Drop the price and do the next deal.

To Rental: Figure out your marketing techniques, find others that have existing buyer bases and network. Don’t be afraid to pay quality professionals that get the job done top dollar for their services.

A slower market creates opportunity and can increase your profits. You just have to be skilled to take advantage of the times!