The Best Time to Buy Real Estate

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People often debate the best time to buy real estate. What is the market doing and is there one time of year that is better than another? Well, one important aspect of buying real estate people forget is that it takes time to find and close on a real estate deal.

I’ve made this mistake which I wrote about 5 Mistakes to Avoid When Buying Your First Property recently. This is the first solo article diving deeper into each of those 5 mistakes. The first area I messed up was in the amount of time it took to secure my first deal. The below goes deeper into my mistake and offers ideas on how to avoid the time mistake.

The Time To Buy Real Estate

Prior to closing on my first duplex, I spent about 15 months searching for properties. I probably viewed about 100 plus duplexes and single-family homes. My goal was to find a multi-family property but the inventory wasn’t high-quality in my price range. Additionally, I wasn’t really sure what market rents were.

Timing the market is challenging in any market. Real estate is hyper-local so there isn’t one answer to when is the best time to buy. Additionally, you have to consider the macro timing. Purchasing real estate in 2007 versus 2009 looked very different. No matter if you bought during the best season (winter vs. summer). Another factor is do you really know what you are looking for? If it is an investment property, do you know what a deal looks like?

My Experience (Or Lack)

The first mistake I made is thinking the process would be quick and simple. I had it in my head I’d find the right property quickly. But I didn’t understand where we were in the market cycle and that good deals were harder to find.

Financial Glass - Real Estate Map

Part of my problem is that I wasn’t sure what type of property I should invest. Early on, I looked at a wide range of multi-family and single-family homes in very different neighborhoods. I knew I wanted to invest for cash flow but didn’t necessarily know what that meant. Truthfully, I didn’t know what a good target was to cash flow each month.

Frequently, I listened to the Bigger Pockets podcast, a real estate investing podcast. Episodes feature a wide range of investors that invest in different markets, properties, and at varying levels in their careers. It was very useful information but after each guest, I wanted to try their way of investing. It became almost a cripple at some point as I would keep changing what type of property.

Frustration Ensues

Eventually, I got so frustrated with the amount of time it was taking to buy my first real estate deal. So I bought a small plot of land and decided I was going to build. I spoke with builders and looked at comps and invested based on the future prospects of the area. Ultimately, I just needed to buy something to scratch that itch. It wasn’t the best or worst decision, but I finally closed on something.

Financial Glass - Time to buy real estate - hour glass

I kept looking for properties but focused on working with builders. I came close to signing a contract to start construction in the summer. When I was full force into going the new construction route the real estate broker I had spent 15 months searching for properties, reached out. She had an off-market property that one of her partners was selling. I jumped on it and gave them their full asking price. I’d done my research and knew my numbers. All of the time I had spent looking at properties helped me determine a good deal.

Closing Time

Once I had the property under contract the rest went fast, simply because I already had a mortgage broker and a home inspector. Ultimately, sourcing your first deal may take longer than you expect. If you are looking to buy real estate during a certain time of year you should factor in the length of time it takes to get a deal. Buying real estate is not like hopping on Amazon and getting next day delivery. It’s typically one of the largest purchases people make in their lives. That plus the due diligence that must be done on the property itself takes time.

But don’t fret if takes more time to buy real estate then you expected. Because all of the work you are doing analyzing deals, walking properties, and speaking with folks in the real estate business will equip you to move quickly when you do find the right deal.

Before jumping in set your expectations. The process of finding deals will likely take longer than you expect. Ultimately the best time to buy real estate is when you find the right deal.

Other mistakes in addition to the time it takes to buy real estate

Original post 5 Mistakes When Buying Your First Property
Finding the right property – Location, Location, Location

Too Many Credit Checks
Know your Numbers

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3 COMMENTS

    • I’m glad you enjoyed the post! Stay tuned for more detail on the other 4 mistakes I made on my first deal. Hopefully, you will avoid them!

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