How Far Will You Go to Find a Deal?
From Tom Nardone, Millionaire Mailman …
With many market's tightening up all around the country, investors are having to reach out to other markets to find deals that they can buy far below the market.
In my neck of the woods (and it's not woods it all, it's more like swamp and ocean here in Florida) many of our markets have got a lot of competition – investors and hedge funds and people from foreign lands are buying here.
A Hop, Skip and a Jump Away
We decided in my business to explore some other markets that I can reach within just a 3-hour drive from my home market of Fort Lauderdale. So far, these travel ventures have been very profitable.
If the prices in your town over the past two years have taken a big jump, seriously consider looking in other markets where you think there may be less competition.
If you look very closely at your surrounding markets within a few hours away from you, you may just find that they are just as lucrative as the major market that you might currently be in with a lot less competition and a lot less risk.
Just recently, I bought three houses. One in Fort Pierce, one in Port Charlotte and one in Titusville all of which are a 2- to 3-hour drive away. These deals were not wholesale deals, they were rehabs that actually didn't need a lot of work.
Each one of these above named cities is in markets that are still priced like my market in Fort Lauderdale was priced just two years ago when our market was at the bottom.
Change is Coming
What I see happening in a lot of the major markets is houses that you can buy to rehab are shooting upwards of $150,000 and $200,000… Quickly.
If you are just wholesaling this may not be a problem, but if you are a major rehabber, now it suddenly takes hundreds of thousands of dollars just to buy one property, and the more you borrow in a rehab and the more deals you take on a one time, gets to be a very risky proposition.
I would much rather buy a $100,000 house for $50,000 and net a $30,000 profit, than I would to buy a $300,000 house for $200,000 to try to make a net of $50,000 or $60,000. There is a whole lot less risk in buying hundred thousand dollar houses for $50,000.
Not to mention the smaller houses take fewer dollars out of your pocket to rehab. I’ve bought rehab houses for as little as $20,000 all the way up to $1 million. And I can definitely tell you there's a whole lot less stress in the smaller houses.
So don't be afraid to venture away from home if you have to.
Now that we live in the age of the internet, it's not hard at all to make a buying decision a few hours away.
So go ahead and stretch your ability to buy something a little out of your comfort zone. It will be a good experience for you.
Enjoy the journey!
PS. Need a mentor?
Talk to Me
Have you made good deals just a few hours away? I wanna hear about it in the comments section below.