I have learned that any time you find an investment house that fits your criteria, it is right the time to buy. I buy investment property whenever I see something that fits my real estate investment model no matter what real estate cycle we find ourselves in; I sell whenever it is most advantageous for me to do so by many optional measures of personal advantage; and I make a very efficient business out of mastering the holding of property to optimize both the buying and selling of property. Opportunities usually don’t come along on schedule. They come along when they come along on somebody else’s schedule. This is the reason it is so important to have thought out ahead of time what your criteria is so you can more easily recognize what are the best opportunities for you. I know what works in my market. I know how long certain projects will take my crews to complete and how much work I have lined up ahead of them. When I am looking for a project, I know what it is that I’m looking for and when I would want to start it. In some cases, I have been able to time the acquisition to coincide with when I can get to the work.
Many projects have come to me when I wasn’t necessarily looking for them. If my crews were too busy at the time, I either made sure it was a good enough deal that it could wait or passed on it all together. Always remember the holding costs you are incurring while a house sits with nothing getting done to it. The problem with all of this hypothetical timing advice is that it is difficult to implement. The reality is that when I was going great guns with three busy crews and subcontractors, the buying seemed to be in spurts. One month my father would buy three houses at foreclosure sales, then we would pick up another one from a bank or a realtor; then the next month, we wouldn’t purchase a thing. The acquisition systems that were in place did not stop, but the results would vary. As you can see, the timing and scheduling is challenging when your purchasing opportunities are unpredictable. You cannot lower your standards just to keep your rehabilitation machine going. I have made mistakes several times over by doing this. I have purchased a few houses in the buzz of activity because I didn’t want our momentum to stop — houses that did not fit right into my criteria but were close. In hindsight, I may have been better off adjusting my rehabilitation crews and passing on the so-so deals.
I buy investment property whenever I see something that fits my real estate investment model no matter what real estate cycle we find ourselves in; I sell whenever it is most advantageous for me to do so by many optional measures of personal advantage; and I make a very efficient business out of mastering the holding of property to optimize both the buying and selling of property. I’m always positioned to buy, sell, and hold property, whatever is called for in line with following my business model. Almost from the first moment I buy property, I’m positioned to sell it. As time passes, my selling position gets significantly more favorable. The fact that I can sell my investment property whenever I decide to do so, however, doesn’t mean I will do so. In fact, I have a great reluctance to sell any property I acquire…unless I am forced to do so by circumstances. I will usually only sell if neighborhood conditions deteriorate, my residents desire to purchase, or my personal circumstances require raising funds. Other than that, I focus most of my time on either searching for new properties to purchase, or perfecting my skills at holding investment property as a landlord.
Mike Sanderson is the author of the new book “Flipped Out? – Want to Achieve Sustainable Real Estate Success?” Available now at SandersonInc.com. He is the CEO of a family business that owns, manages and maintains over 100 revenue producing rental units–a majority being single-family residences that were purchased in disrepair. Mike has actively participated at all levels of the purchase, construction and remodeling of over 100 homes and 20+ multiple unit buildings. He has numerous years in the construction of roads, new homes and remodeling that give him the distinct advantage of having a vast amount experience.
Real Estate Investment Success Story
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