Friday, October 20, 2023
Imagine standing on a beach as a storm overhead tosses dark blue waves around the ocean. Everyone else is huddled on the grass at the edge, packing up their belongings to head back to their cars. Is now a terrible time to get into a boat? Maybe this scenario is a stretch – and just bear with me.
When a real estate market is unstable, as it has been for the past two years, most people hold tight in their owned or rented homes and stay out of the water, so to speak. Is this always the best plan?
Let me ask you this: What do you think of when you reflect on the Great Depression in the 1930s? If you’re like most people, you’ll envision poverty and people searching endlessly for jobs. That is all true. And, what most people don’t realize is the other side of the story: more people became millionaires during the 30s than they did at any other time in history. Seriously! Why? Because sometimes the most golden opportunities are out there during turbulent economic hardship.
Don’t believe me? Here is a little rule of thumb. Uncertainty creates financial stress.
In a market like this, many people need to liquidate properties that they wouldn’t have to under different circumstances. And fewer people are well positioned to jump on these promising opportunities than they would be in more favourable market conditions.
Overpriced Properties
In some cases, financial desperation causes people to list their homes over market value. Sadly, in a depressed market, this can backfire badly. Less people are out looking. The potential buyers out there can be deterred from putting in an offer. Those who do view the home will likely fixate on why the property isn’t worth the money rather than appreciating its strengths. This makes the home seem far less attractive than it would otherwise be. When the price is later dropped, the listing has already become stale, has lower visibility, and leads people to offer even less than the reduced asking price.
Power of Attorney
Another compelling avenue to explore is Power of Attorney sales. These transactions often arise from significant shifts in a property owner’s life, such as health challenges, incapacity, or a change in residence. This situation can create a unique opportunity because these sellers are often highly motivated, seeking a swift and straightforward sale. Their motivation paves the way for more flexible negotiations and, potentially, more favorable prices.
Now, here’s where the power of opportunity truly shines. Given the urgency and specific circumstances involved, investors often find themselves in a prime position for negotiations. Sellers may be more inclined to work with reasonable offers and adaptable terms, making it easier to structure a deal that suits both parties. The efficiency of power of attorney sales is another compelling aspect – they tend to move faster than traditional real estate transactions. This pace is particularly attractive to investors who are eager to seize opportunities swiftly.
But wait, there’s more. The circumstances surrounding power of attorney sales sometimes lead to properties being listed below their actual market value. Investors with a keen eye for these opportunities can acquire properties at a discount, setting the stage for potential profits when they resell or rent them. And there’s a little extra magic here – some power of attorney sellers may be open to creative financing arrangements. Think seller financing or lease options – these flexible financing solutions can be a game-changer for investors seeking properties with lower upfront capital requirements.
Properties with Downward Pricing Pressure
With housing prices increasing and increasing inflation and interest rates, properties at the lowest price points are most in demand. This is partially because people don’t qualify for higher and partially because people are trying to play it safe. These are townhouses, garden homes, condos, and properties in the 500- to 600-thousand-dollar price range. The strong demand brings a surge in pricing. The result is that single-family homes are less sought after, and now there is a downward pressure on these properties since they are less attainable.
When the storm rages and everyone else is heading for shelter, don’t be too quick to dismiss the idea of embarking into the unknown because often, it’s during turbulent times that the most promising opportunities lie hidden, waiting for those who dare to explore.
While we only covered three options in this blog, the Dekker Team has a host of other safe, reliable opportunities to suit almost any budget. If you want to explore this further, watch this week’s episode of LIFE’s Inside Track or reach out at 613-860-4663 or together@dekkerteam.com. To invest safely, you need a strong team behind you. We’ll help you find the opportunities; it’s what we do. Let’s move forward together because together, we’ve got this. Let’s see you “sailing” when everyone else is huddled inside.
