Are You David or Are You Goliath?

Posted on March 11, 2013 by

Last month I mentioned that there has been a turn in the market. A recent Creative Loafing article confirmed the information that I gave you—that the market is looking different than it has in a long while. Many people are afraid of another bubble. And in the last few articles, I’ve asked you to plan, to have a strategy, to do your research. And maybe you’ve made that plan. Maybe you’ve done that research.

But here is the nature of our business: just when you think you have it figured out, it changes. So we have to ask ourselves anew: How can I continue to make money? How can I get in on the current market and live well? The answer is that you need to know what is ahead.

But if you’ve not encountered this kind of change, then you can’t make an informed guess. One opportunity for success is to become David. You can go it alone which is very risky. Or you can work smart: get a mentor. Work with someone like me who has survived battles with Goliath before.

I know that slaying Goliath is possible.

First, let me introduce you to some of the Goliaths:

  1. In a June 2012 meeting, Warren Buffet said that he was buying as many houses as he could get—and we know that he can get a lot! We are now competing with Warren Buffet-like entities.
  2. Companies like Colony America, Waypoint homes, Colony American Homes, Blackstone Group, LLC, Silver Bay Reality, Richport Properties, Sylvan Road Capital who recently spent $15 million to $30 million at the steps buying properties without ever going inside them.

These are entities with whom I cannot compete. I suspect that many of you are in the same situation. We used to make our livings at the court house steps, but now we’re left scratching our heads.

Stop scratching and become informed: Goliath has come to town. I’ve decided to become David, and I’d love for you to join me.

Now that we’ve identified Goliath, we have to understand what he is doing to the market. These powerhouses are buying good properties and paying over asking price by $4-10K. This leaves the trash for us! Or does it? Is it possible that we can still find a way to stay in the game? Yes!

Knowledge Can Slay Goliath

Knowledge can overcome fear. So let me give you one of the many lessons that I offer my clients. As I’ve said, I have been through many types of markets, so I can predict, based on the past and on current evidence, that you should not fear the bubble.

If you can still buy a house for less than it takes to build it, the market has room for growth. This means no bubble.

If the mortgage payment is less than it cost to rent, then there is room for prices to rise. This means no bubble.

But isn’ it still a it a seller’s market? No—there are still plenty of houses that are upside down. This means no bubble. It is a sellers market below $400,000.

There are plenty of phantom house in the market that will be absorbed in 2013-2014. This means no bubble.

So what can you do?

Situation 1: I have No money and No credit.

Here are possible plans:

Plan 1: Join Goliath.

Plan 2: Feed Goliath.

Plan 3: Partner with someone who has credit or cash.

Plan 4: Buy two guns and a pit bull and work a war zone neighborhood.

Plan 5: Move to a different state or city where you might be more successful.

Plan 6: Move up in price point and service the second house market.

Situation 2: I have LOTS of money, and I have Fantastic credit.

Find a David who, in this case, is a mentor who has slayed this giant before, and let him train you in lease options and creative deal structures. I happen to be just such a mentor. Based on my experience, I could help you:

  • Change your marketing strategy.
  • Buy before the properties get to the court house steps.
  • Buy apartment buildings. (Doing this is very smart because Goliath will do this after he has gobbled up all of the single family houses. Beat him to it!)
  • Buy, fix, and sell homes that need repairs in the $150K and above.
  • Partner with a professional investor and reduce your risk.

You could go it alone, but it will be more difficult, and you have less chance of being successful.

I want you to stay here, in your city, and be successful, which is why I want to work with you. I am a real estate coach and a mentor, and I have the experience to guide you through these changes. Please contact me.

I am looking forward to meeting you and helping you on your way to a successful 2013!

Russ HinerRuss Hiner is an active real estate investor, coach and mentor. Russ is currently the leader of the Atlanta REIA Creative Deal Structuring Group and Atlanta REIA Mastermind Group. Russ also teaches several workshops throughout the year on a variety of real estate investing topics such as Negotiations, Wholesaling 101, Wholesaling 401, Real Estate 101, Property Management and more.

Contact Russ Hiner


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