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Today’s question is regarding our local real-estate market. The listener posed the following comment / question:
I listen to you talk about the great housing market in our area, but I never hear anyone talk about why.
There are 2 conglomerates buying up homes under $200,000 Cash offers-- SIGHT UNSEEN --- as soon as they hit the market. They fix them up and rent them out for 5 -7 years
Her assertion is that this practice isn’t fair and the gains are in local marketplace are artificial. She’s been trying to win a bid on a home for about a year with no luck. So I’ll walk through this piece by piece.
But let’s look at other factors that need to be considered:
So to begin with we’re talking about perhaps 10-15% of the overall local real-estate market that’s directly impacted by the practice of instructional money moving on property sight unseen.
Next let’s look at other asset classes and the impact of institutional money:
Is it fair that you pay a price for those items based on the majority influence by professionals and world Governments? By comparison local real-estate has far less professional competition than other assets classes. I understand it’s frustrating if you’re trying to buy a foreclosure and can’t win the bid but in a free market it’s completely fair and legal for any legal entity to compete. Now for the sustainability.
In other words the current local marketplace is certainly sustainable. With more than 2/3 of all properties being acquired with cash – they can’t default. If fact because of the enormous cash influence we’ve never had a more sustainable housing market. We may not like the buyers – but cash is cash. Finally the overall impact of these big investors…
While the impact of professionals buying distressed property may not be good for you if you’re bidding competitively against them, the net effect of the impact to our community is certainly positive on balance. Here are all of the people that benefit from the influence of professional real-estate investors at the local level:
And there are likely more than I’ve left out. I realize this is tough love but there are two sides to this coin and the only ones who don’t benefit from this process are those who want to buy these types of properties. Which leads me to the final point – there are good deals that aren’t foreclosures. Perhaps a change in your strategy away from distressed properties and towards equity sellers looking to quickly sell their property would serve you better.
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Why you should always fly on Tuesday or Wednesday:
Bottom Line: We’ve known for some time that Tuesday will generally result in you obtaining the lowest airfare. The actual savings is exceptional. A USA Today travel expert determined that the average cost savings for domestic airfare is 35% on Tuesday or Wednesday vs. other days! That’s an average, not a rule, but it certainly should be a consideration when booking airfare.
TV or video games for your children? One really is better for them:
Bottom Line: There is an answer to that question… It’s hands down video games. The video games have always required the mental interaction that TV watching doesn’t demand but the new little nugget is something else.
For years we’ve complained that kids today don’t get exercise because of the video games right? Well as VR plays a bigger role in video games kids are actually starting to obtain measurable exercise benefit from the video games that demand constant movement.