Archive for October, 2009

When is the best time to buy?

October 29, 2009

I began my real estate career in late 1967. That winter I moved to northern Michigan when Bill Jennings, my broker, opened an office up there. Actually, it was temporarily in a chalet at Crystal Mountain Ski Lodge where Bill and I lived for three months. Bill was a wild Canadian who had once played professional hockey for the Detroit Red Wings, and lived like he was still on the ice. There was no end to his spending – but that’s another story. Suffice it to say I enjoyed myself immensely and lived through it.

It wasn’t all fun; we actually did work that winter, mainly listing real estate in preparation for the spring market.

One of my first appointments that spring was with four car company engineers who wanted to buy a hunt club. While showing them a property (they should have bought), one of the four said, “The time to buy was five years ago.”

My spirits dropped. It was just my luck to be getting into the real estate business five years too late.

Every year since then, someone has said to me, “The time to buy was five years ago.”

Right now the country is in one of the deepest recessions since The Great Depression of the 1930s. I grew up with parents who had lived through that depression and throughout my youth heard stories of how terrible it was. Then one day I was driving in my car, listening to an interview, when the guest said, “There were fortunes made during The Great Depression.”

My neck still hurts from snapping over to look at the radio. I actually said out loud, “WHAT”? Then the guest pointed out that there were still people with money and they were making great buys in real estate. That opened a whole new way of thinking for me. Ever since then when I hear how bad things are, the single word I think of is, “Opportunity.”

So what are you waiting for? There are great buys out there and the time to buy is now! Don’t wait until you, too, say, “The time to buy was five years ago.”

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Back from the flu…

October 29, 2009

…and glad to be back.

Financing Commercial/Investment Real Estate

October 14, 2009

You hear everywhere that you “can’t buy or sell commercial/investment real estate because no one is lending money.” Well, that has some truth to it, but the fact is there is money available if you know where to look – and that is why you need a good commercial real estate advisor.

I was prompted to write this message because of how many times I have heard that said in the last year or two – coupled with how many times a day someone’s rate sheet for commercial loans comes across my desk. A good real estate advisor will have numerous sources to shop a loan for you, so all-cash sales are still viable.

Further, there are sources of financing that are not “traditional,” if you consider the boom of the last couple of decades “traditional.”

Today, buyers and sellers, mostly sellers, must look at their goals and then be prepared to do what it takes to meet them. As an example, it has been years since we have heard of “seller financing,” or “seller will assist with financing,” but we are hearing it more often in a week now than we heard it in a year in the past.

If a property owner wishes to retire, where else could they get the interest rate for their money than in a land contract or purchase money mortgage? And, that money is secured by something they believed in strongly – the real estate they owned.

If the time comes when they wish to liquidate that paper, there are buyers for it. Certainly the buyers will require a discount, but when you consider that the sale price was probably higher to begin with than could be obtained with a cash sale; and it will not be for the full sales price because the seller has already received some of it in cash, the discount will not be as deep as one might imagine.

Seller financing is just one of the “non-traditional” methods of selling. There are more. And for the buyers, the same holds true.