Last week I talked about the cash aspect of acquiring real estate investment properties, specifically short sales. Sure, some banks will finance the purchase, especially if it is and owner occupied property and your credit score and debt ratios make sense to the lender.

In the end I did not get either of my offers accepted. I also discovered on one of the offers, it went to a local investor who was well connected with the bank that was the lender on the short sale.

I needed to reassess my thinking and my objective of what my true expectations are as I evaluate my real estate shopping in today’s market.

I do have choices:

1. I can lower my standards of the type of property I want to buy, pay a lot less in different markets, and gain opportunity to maximize my income and cash flow.
2. I can look at other ways to buy the property, with seller financing or OPM/OPI (other people’s money, private loans, or other people’s IRA’s)
3. Or, I could give up and go home.
4. I can practice the “Acres of Diamonds” philosophy of investing, meaning invest in my own back yard.

In the end, I decided to go home and look locally, develop relationships with those investors who having something to sell at the right price, establish local lender connections, and focus on other strategies besides short sales where it may be easier to get my offers accepted and not compromise my investment strategy which is to buy single family homes in neighborhoods where people want to live.

The real moral for me in all of this and a lesson I learned was to not think the market I focus on is on sale; that I can just waltz down to an area on a one time trip and buy whatever I want for the price I expect to pay for it and in the end… nothing is as easy as it appears.

This entry was posted on Friday, June 19th, 2009 at 12:51 am and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.