Check out the next podcast in our Smart Real Estate Investing series!
If you’re not very familiar with the current supply-side shortage and its importance in investment real estate, today Marcia and I explain some of the effects on investors.
René Nelson, Eugene commercial real estate broker
Marcia Edwards, Eugene residential real estate broker
Smart Real Estate Investing – Part 7
René Nelson: Marcia, in the last show, we talked about one of my clients who called and said that she needed to move from the Brownsville area into Eugene-Springfield so she could be closer to emergency services, and she’s at that dilemma because she knows that she could sell her house, but she’s worried about buying and buying at the top of the market. What advice do you have on that?
Marcia Edwards: My advice is that there’s a bigger picture here and you should look at your priorities. If she needs to be close to emergency services, it’s good to take a look at, “Okay, should I sell right now?” But it’s not the driver in this case. So if you turn it into a rental in Brownsville, you’ll get a tenant right now because vacancy is so low, but you’ll also bring down the quality or condition of the property. So if it’s really at owner occupied standards, then you would want to sell it and get the top prices now, have that liquidity to serve you on the buying side, renting side, senior living side, but get close to where you need to be for the emergency services.
René Nelson: And then in that situation where she owns her house free and clear and she really wants to be a cash buyer going forward for her acquisition, how do you do that?
Marcia Edwards: Well, it’s not easy. [chuckle] But what you gotta do is you gotta do a lot of strategic planning. You’ve gotta take a look at realistically what you’re going to get out of the property, not your pipe dream, which you may reach also in this market, but really what is a planning number that you can use as the proceeds out of that sale? And you’ve gotta pretend as if you’ve got it in your pocket and go be a buyer, not just a buyer of what’s coming up, but take a look at what historically you could have done successful in the last three months if you had that liquidity. So you want the realtor just that’s serving you as a buyer’s agent to show you what has sold successfully, make sure that your expectations are real before you go out there and sell your house and become unhoused.
René Nelson: Oh, that’s interesting. Boy, I have a ton of questions. Okay, timing. So if she were to sell her house and come forward and say, “I’m a cash buyer, but it’s subject to my house selling.” How long does it take an average house… Let’s just say Eugene-Springfield, how long is the average house on the market, 28 days, 30?
Marcia Edwards: 20 days. 20.
René Nelson: 20.
Marcia Edwards: Yeah.
René Nelson: 20 days.
Marcia Edwards: And that’s just average, that includes some high-end homes that are more difficult to sell, so you’ve really gotta take a look at your micro-market and understand what you’re selling in for your setting. And there are bridge loans available now, so that is you can have an interim financing because you’re competing with a lot of cash in this market as a buyer, you want to make sure you have the liquidity that you can put… Most liquidity you can, a contingency to sale a house is not liquid enough to be successful, generally speaking as a buyer in this market.
René is available to answer your real estate investment questions. If you’re considering investing in a property or want to know how the pandemic may affect your investments, schedule a 15-minute discovery call today.
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