So what do you do as a buyer who wants to buy a home in a slow market? First off, lets pretend that you are not like 80% of the buying market who follow the croud and does what everyone else does.
Lets pretend for a moment that you can see opportunity where many other people see none.
Okay, do you have your thinking cap on? Yes? Good!
Rick Otton, my first Real Estate mentor, once said to me, "It's not about how much you pay for deal, but how soon you pay" (within reason and with common sense applied).
At first, this statement puzzled me to say the least. Why wouldn't I always look to get the best and cheapest buy possible? Well, the answer became clear with some practise over time.
You see, in a slow market, the sellers tend to become much more flexible with their terms of sale. This may mean that the seller will simply let you make a small down payment, to show some commitment or to simply cover the loan arrears that in turn, gets them out of trouble.
Many of the deals that we have been doing lately fit into this category. The seller has a problem that they want fixed fast. We don't mind getting closer to their asking price, as this gets the seller motivated to work with us on our deal to simply take over their loan repayments for the next 3 to 5 years.
The seller benefits because they have no more stress related to their house not selling. We benefit because we have full control of some real estate for the next 3 to 5 years.
This means we can buy as many of these kinds of deals as our available funds will allow, and in the next 3 to 5 years, we can choose to cash them out and benefit from the capital growth as the slow market picks up. You don't even need to qualify for a mortgage, because you are using the sellers existing mortgage. Its a true winning deal for both parties.
Perhaps you are thinking that you could never afford to cover these loan repayments for the seller, but you must remember, that you have several options to create an income stream on these deals as well! In many cases, you will be able to find a normal tenant who wants to rent a home and this can make your cash flow commitment close to being neutral. Alternatively, you can also create an Equity Share arrangement with the tenant, so that you have no holding costs, so the tenant gets to sharing in the profits created in 3 to 5 years time.
As you can see, the possibilities are endless. You are limited only on your imagination and your willingness to create a winning deal for the seller and your tenants!
