Real estate investor explains how to find great deals
- Michael Zuber is focusing on one thing when buying property right now: days on the market.
- Specifically, it only looks at homes that have been listed for at least 15 days.
- If you want a deal in today’s market, it won’t come from day one listings, he said.
The real estate market is constantly changing – and to be a successful investor, it’s important to be adaptable.
When it comes to buying properties, investor Michael Zuber’s strategy is completely different today than it was at the start of 2022.
“Six months ago, the things I was buying were day one ads, and I was using cash because it was all about speed,” the investing veteran told Insider.
Over the past two decades, he and his wife Olivia have built a real estate empire in Fresno, California, which has allowed them to retire early. They bought their first rental property, a $107,000 single-family home, in 2002 and have steadily grown their portfolio ever since. Today, the Zubers own more than 100 homes and earn more than $100,000 a month in rental income. Insider reviewed their property portfolio summaries which verified these details.
In response to current market trends, Zuber is no longer looking to jump on day one listings. In fact, he won’t even look at a property that’s been on the market for less than 15 days. Soon he probably won’t be watching anything that’s been listed for less than 30 days, he noted.
It focuses on ‘days to market’ or ‘DOM’ because that’s how you’ll get the best deals right now, he explained: “If it’s 15 days, sellers get nervous. . They say to themselves, “No one is showing up at my open house,” and they might be open to a lower offer. »
The domestic real estate market has largely favored sellers since the start of the pandemic, particularly from summer 2021 to early 2022. As mortgage rates fell to record lows and a flood of stimulus money is entering the economy, there were simply more buyers than houses available for sale, and as a result, “many sellers were conditioned to accept the asking price or higher,” Zuber said. “That is changing rapidly.”
Now is the time to get more competitive with offers, suggests Zuber, who expects to buy properties at lower prices this year compared to last year. He also does not expect to make offers at the list price in the near future.
“Because I think this market downturn is going to take a few years, I will make sure that every deal I do is better than the last one,” he said. “I don’t know where the bottom is.”
Any savvy investor can filter listings by “days on market” and use that strategy to find their next property.
“The problem with real estate investing is you have to find a willing seller to get a good deal,” Zuber said. “Unless you’re a homeowner who needs to buy today or on this street, then why compete with day one ads? If you want a deal, the deal won’t come from the day one announcement; it’s gonna come from an older list.”
Note that “an older ad” looks different depending on your market. In Fresno, where Zuber invests, he sees prices starting to drop after a location has been listed for about 15 days. It could be different in Los Angeles, Austin or New York.
“Every market is slowing down, just at different rates and at different speeds,” he said.
Also pay attention to changes within your market. In four months, its timeline could be closer to 30 days, said Zuber, who spends time checking ads every day: “It will change all the time. »