What Is A “Market”?

I laugh when people ask me what I do for a living. I say I’m a real estate investor who buys real estate at a discount throughout the U.S.A, and helps investors earn triple digit ROI on their real estate investments. The common instant response is “wow - the U.S. market is pretty bad right now, isn’t it?”

Last time I checked, the U.S.A. was pretty darn big. In fact, the same can be said for any of the States within the U.S.A. Top of the hitlist is usually Florida. Everywhere I turn, people say Florida is too risky, or the market is still tanking down there.

Yes, there are some areas in Florida that could be risky for an investor, IF the investor doesn’t have the budget to carry the costs of a vacant property for a longer than usual period of time. That said, even within Florida, there are people making money through real estate investments. How - they know their market.

In grade 10 economics, I learned that a market is a place where buyers and sellers come together. In real estate, a market is not just a product of “where” the property sits on the map. A market is affected by:

• The type of property you are buying/selling
• The type of person you are intending to buy from/sell to
• The location of the property

just to name a few criteria.

Even with an alleged recession looming on the horizon, and even in a state (Florida) which is known for high vacancies, high property taxes, and high insurance costs, there are certain “Markets” where you can make money.

There are still plenty of people with plenty of money, who will pay a premium to live in a prestigious address or on the water. My friend Robert Shemin (who happens to be the author of the latest New York Times Bestseller “How Come That Idiot’s Rich And I’m Not”) found a tremendous deal on South Beach in Florida.

He found a motivated a seller. The seller wasn’t motivated because of financial hardship. He was motivated because he lived oversees, and hear that the market in Florida was going down. Robert called the seller (in response to a newspaper ad) and quickly negotiated a deal to make the seller feel more at ease. Robert would lease-option the luxury condo from him at a fair price (actually less than the current fair market value a the time of the deal) and have the option to buy the property at a specified future date. By the time that date comes to exercise the purchase option, the unit should be worth more than double what Robert must pay to buy it out. The seller is happy because he no longer worries about losing value and he got what he wanted for the unit (at the time of the deal).

Everyone’s happy, and Robert will probably make over 1 million dollars on that unit alone! Way to go Robert.

When you consider a market, don’t consider the city or the state. Consider who are you selling to, what can they afford to pay, and what will they pay to have. If there is a property to meet that criteria, it might not be a bad investment (all due diligence considered of course).

For more visit our main website: www.mandmproperties.biz