When do you decide to compromise your strict buying criteria? Crazy money chasing every halfway decent property, not getting deals, and you’ve been waiting for the big downturn to buy. Now the downturn has arrived, your powder is dry, and brokers are sending deals.
But wait! These aren’t good deals. Sellers are reporting rent delinquencies and vacancies, but at this stage at least, they aren’t open to lower prices. Was this the big downturn? Is this the buying opportunity we waited for? Where’s the discount? And even more important, should we compromise our buying criteria so we don’t keep missing deals? And more important than that, what does the future hold?
Look back to past market cycles. One thing that has held steady is that market cycles are protracted, not quick turns. Yes this turn hit hard and fast. Did any of us expect to be where we are today in February, just three short months ago? Not many. But we’re not through this, and the affects will be with us for a long time.
Have unemployment, recession, travel bottomed out? Maybe, maybe not. Even if they have, we will keep feeling it for months to come, and its impacts will be felt in unexpected ways. Prepare for it.
Which tells us something about what the future holds. Property owners, like everyone else, come in all varieties. The less capable owners who are struggling with problems at their properties are working on solving their problems. Most have not decided to sell because of their problems.
But expect that to change. Taking mortgage relief from their lender today will mean greater pain in a few months when they have to start paying mortgage again, plus make up for payments they missed. Owners who paid too much and did not have reserves were doing fine, up until now.
It is not time to compromise your strict buying criteria. It is time to be thoughtful, compassionate, and extroverted. Talk to brokers, lenders, partners, owners, anyone in your network whom you want to work with. The deals will come and you will have the opportunity to help property owners solve their problems, on your terms.