No business model should remain static and that is certainly true for real estate investing. A few mom and pop stores in small towns may still not have a website but these are the exception in our ever-evolving business world. Here are a few signs that it might be time for you to reevaluate your real estate investing model:
o You are having to do more deals to earn the same or a lower income.
o You are spending more time working to find the same number or fewer deals using your old business model.
o Profit margins on your deals are consistently getting smaller.
o You have more competition in what was once a niche market with few competitors.
o A new market has developed that is not friendly to your old business model.
o Other costs of doing business are going up other than purchase prices.
The list can go on and on. What’s important is that you recognize when it’s time to change your business model.
That time may very well be now. One dramatic change in the market is that banks are slowing down on foreclosures and ramping up short sales. According to RealtyTrac (the leader in foreclosure sales), the average short sale costs the banks $27,000 less than selling a foreclosure.
Short sales allow lenders to avoid expenses such as maintaining, repairing, and marketing a property along with property taxes and HOA fees. Your business model should be expecting a surge in short sales and a decline in foreclosures.
The FHFA has oversight responsibility for Fannie Mae and Freddie Mac. Both mortgage holders have been instructed to respond to short sales offers within 30 days and make an accept or reject decision within 60 days. This should greatly reduce the amount of time it takes to complete a short sale, which had previously been averaging right around a year.
If you are unsure what direction your business model should be heading, I encourage you to contact me at http://coachingbypeter.com/mki/.
All the Best,
Peter Vekselman
PS: Private Real Estate Investment Coaching Available:
http://coachingbypeter.com/mki/

 
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http://www.youtube.com/user/InvestmentReal?feature=watch