It’s Not about the Right House, it’s about the Right Seller
The past few years have seen some of the craziest ups and downs in real estate with interest rate movements and investment strategy shifts. The start of Covid through 2021 saw record low interest rates leading to an incredible appreciation of homes. Everyone was able to benefit from purchasing and/or refinancing. In 2022 and early 2023, interest rates have steadily climbed, and then available housing inventory plummeted to historic lows leading people to feel that they missed out on their chance to start investing. However, it is time to shake up the traditional approach of finding the perfect house.
People tend buy homes based on payment, not price, and it is common knowledge that interest rate and purchase price are the biggest contributors to monthly payment. Given the low rates of the last couple of years, if potential sellers do have to move, the low interest rates plus incredible appreciation in rent (>9% in Indianapolis YoY) mean that holding onto homes makes more sense than ever. Therefore, we aren’t in the time where deals are just “sitting” on the market; it becomes necessary to find motivated sellers that have some sort of distress to sell the house.
Today, aspiring investors need to be making a lot of offers that make sense for their numbers. They aren’t looking for the right house today - but the right seller who needs an exit strategy that aligns. To do this, it means analyzing dozens and dozens of properties, identifying the price that makes sense, and submitting (potentially embarrassing) offers. While it may feel awkward to submit the price that works best for an investor, it shows the seller where the liquidity point is that they can get out of the house.
We know this can be a strange time to start your investment journey in this market. We would love to help you on your way to financial freedom through real estate investing and navigate you through analyzing deals, submitting offers, and finding your seller. If you are interested in connecting, we would love to see you at our public office hours or reach out to us at coaching@offleashinvestments.com.