Obtaining Property Through MLS In A Hot Area. Is This Possible?
I have been looking for multi unit rental properties in a very hot area lately and the asking prices of the properties are so excessive that the there is no way to have a positive income.
For example: this one property I was looking at sold 8 months ago for 137,000. Now their asking price was 220,000. My highest offer was 175,000 (with this number I would pretty much break even monthly). The seller laughed at my offer. It turns out that they sold the property the next day for 223,000. THis has happened several times within the last 2 weeks.
Can someone please explain this to me? There is no possible way an area can appreciate that much in less than a year.
What am I doing wrong?
Should I stay out of this hot area?
How many of you use the MLS listings to find your invesment properties?
Any suggestions would be really appreciated.
I am in the same situation. I suggest make freinds with a very aggresive realtor that will call you the day it hits the MLS. If youwant to house you MUST place a PA on it that day or it will be lost.
I have made an offer the same day the property is listed. It wont make a difference because the offer is so far off from the asking price. I would offer more, but then I would be taking a huge loss. Thank you for your advice. I guess I'll keep trying.
good luck to ya
MLS if not the issue.
In a hot market people are paying high prices. Maybe there is some logic or maybe they are overpaying. Being quicker to be the one who overpays is not going to help.
If the market was to continue to go up then paying full retail will look OK in a few months. The problem is all hot markets eventually become cool markets if not cold. It is the nature of fast appreciation. At some point it does stop.
My suggestion is the MLS and Realtors are not going to be a plus or a minus. The issue is the cash flow vs. the pricing. Either wait for the market to cool, find more equity so even today's prices cash flow (very low returns though) or look in a different market.
Some folks believe the best strategy in a hot market is to be a seller. I tend to take the view that I prefer to die before selling in that I would rather refinance, collect income, trade or similar before taking the hit for selling and receiving cash (transaction costs and taxes).
If you take the really long view then the model would be to hold onto you cash when a market is hot (refinancing and other such things to build up the war chest) and then be a vulture when the market takes a dive.
John
[addsig]
active_re_investor
I have already started to look into different areas and I will continue on that route.
Thank you for your advice