Summertime is a Great Time to Buy HousesPosted on July 5, 2013 by
Hello fellow investors,
Now that summer is officially upon us it’s time to do some serious thinking how to maximize our profits over the next several months in the most effective ways. A few years ago I noticed another investor I knew who became very intensively busy starting in late March and early April. One day while we were having lunch I asked him why he did most of his deals in the summer months. He gave me a very well thought out and profitable explanation of his strategy, why he used it and how profitable, if done right, his strategy could be.
With so many schools continually receiving poorer evaluations, for many parents sending their children to good schools is becoming more and more important in today’s world. My friend explained that as the school year draws to a close and summer is quickly approaching that many parents start to look for areas with the best school accreditations to send their children and find a house to rent or buy. Once he explained what he was doing I started looking for three and four bedroom houses in the best school districts where I could buy houses affordably I could fix and rent or fix and sell to these families. I started looked for houses in those area’s that needed some cosmetic work done to them that I could buy at an affordable price or with terms that would allow me to make a monthly profit no matter what I did with the houses, rent or sell.
My criteria for the houses I wanted to buy were, 3 and 4 bedroom houses in more upscale neighborhoods, but not where the houses were ridiculously high priced. I wanted area’s where working class families who could qualify for a mortgage want to live. I needed houses that had good curb appeal and a floor plan that was well designed for a family with several children. I wanted houses in good areas where there weren’t too many senior citizens. Area’s where families with children already live. I found senior citizens in nice, quiet neighborhoods with children playing in the streets all hours of the day and evening don’t work well together.
It is a proven fact that these parents who are more concerned with their children’s education start to think about moving into school districts that have higher scholastic scores about the time the school year is about to end giving them the entire summer to find a new house to live in where they want to live. As an investor I needed to buy the houses for these families in March and April to give me time to fix them and get them ready for these families to move into as soon as the school year ends. From my years of experience repairing houses I know for a fact that to have a house ready to sell to a family who can qualify for a loan takes approximately 4 months from the day I buy the house until the day I go to closing to sell the house. If I had a family who wanted to rent my house I knew it would take approximately 3 months from the day I buy it until I could move a qualified tenant into my house. I’ve done too many houses over the years to know my time-frames are pretty close to reality.
The houses you buy must be affordable for the buyer or the renter and provided I bought the properties at the right price or with good terms I could sell or rent and make the deal affordable for the buyer or the renter and still make a very good monthly cash-flow.
This is an excellent strategy for any investor looking for a specific type of buyer or renter where you can buy houses in good area’s where you will have many buyers who want to live in good areas. Just remember, start looking in the spring so you will have as many houses ready to sell during the summer months before the new school year starts.