Nancy Wallace-Laabs (00:03)
For the first time in several years, buyers are starting to get something they haven't had in a very long time. Options. Not lower prices, not cheaper interest rates, options. What does that mean? More inventory, more negotiating power, more seller concessions, and more time to make decisions.
And if you're thinking about buying your first rental property, your next rental property, or even your primary residence, understanding this shift could save you thousands of dollars and help you make better decisions. Because a changing market doesn't automatically mean a bad market. In many cases, it creates opportunities that simply didn't exist a few years ago. And today I'm going to show you what this changing market actually means, how smart buyers are taking advantage of it.
and how you'll have more options for some of the biggest financial advantages that we've seen in years.
My name is Nancy Wallace Laabs, and I have been investing in single family homes for almost 20 years. I owned a property management company, and I am here to give you all the tips and tricks to successfully have either a short term rental, a long term rental, how to flip it. All things about real estate investing today specifically, I want to talk about changing markets. I love it when markets change. It can be challenging, but it can also be
very financially lucrative and we're gonna get into it.
So there are definite signs that the market is shifting. And when you start seeing longer days on market, when you start seeing more houses that have a price decrease than are coming on the market, then that tells you right there that there's a market shift happening in your area.
So it wasn't that long ago that we were in a market here in the DFW area, we were having bidding wars on properties. I as an investor was not taking part in that because it was just a crazy time to invest in DFW, and people were paying $50,000, $60,000, $100,000 over the list price, waiv all of the inspections, waiving appraisals, and
It was just kind of a crazy time. And then now fast forward, the market is now starting to correct itself. Interest rates are still a little bit higher as I'm recording this. However, what we're seeing is that there has definitely been a shift in the market where today it's becoming more of a buyer's market.
what we're seeing is that there's more inventory, longer days on market, and fewer bidding wars, which is a good thing if you're a real estate investor.
So in a shifting market where we're going towards a buyer's market, it really literally means buyers have more options. More options to negotiate a lower price, more options to get seller concessions. and less competitive right now. Cause I think people are kind of concerned when things are kind of crazy in the economy. That's also, believe it or not, a good time to look at real estate investing when things are kind of
Chaotic. I mean, the market, the stock market is still doing fairly well right now. So somebody, some people know that you know, investing in a market that's a little bit crazy is still a good option. So don't let things that are kind of around you make you hesitate whether or not this is a good time to invest in single family homes. What that means for investors is that when
there are less home buyers buying homes that means there's a more demand for rentals so that's why getting into single family homes because there's almost always a demand for rentals.
so let's talk about what some of those options are. So number one, you have closing costs. When it's a buyer's market, you can ask for a whole lot more. You can have the seller pay more of the closing costs, or you can negotiate that, with seller concessions. You can do rate buy downs. you can negotiate repairs, you can get the sellers to pay for home warranties.
So in a buyer's market, you just have more options on getting these sellers concessions because the seller, the seller might be stuck on a particular sales price that they want to get. However, you can offset that by asking for these seller concessions that include closing costs, interest rate buy downs,
here's an example of a financial option two interest rate buy downs. Can you get the seller to finance part of the down payment? Can you get them to kind of carry the note for you? But basically the way it works is that you buy it down for the first one or two years, and then the third year it can go up. Now I'm not a lender.
So there are all different ways that you can negotiate with a lender as well. So you can always shop lenders. So this is just one example of how a buy down might work.
Now we're going to talk about financing options. So, interestingly enough, if you were talking about, let's say you wanted to buy your first investment property and you were doing it through the house hacking method. So, house hacking is you buy a home that you live in for two to five years and then you turn around and you rent it. Well, when you bought the home, you were able to get a conventional loan.
You're gonna have to move into more investment type of loans, which is the DSCR loans. FHA options are not usually available for investors, so you kind of have to look at can you assume it? And then there's portfolio lenders, and I also didn't include in here, but you have your private money lenders. So the thing about lenders is that there is money out there. If you find a deal, you can find the money.
I have built a network of private money lenders, and these are people who have money in, say, a self-directed IRA, They're making zero money on that unless they learned how to invest it on stocks or gold and real estate. But they can actually be a a lender for you
it's a lot easier than trying to go through the bank and whatnot. But it does take it is relationship-based and you do have to kind of prove yourself in terms of like how you're going to present. So first time investors need to be working with someone like me that knows how to get them in touch with private money lenders. But there are tons of them out there.
And now we're going to talk about strategic refinancing. So a lot of times people will wait because they think the interest rates are too high. And the thing is that interest rates do change, but missed opportunities do not. So while you're sitting on the sidelines waiting for the interest rates to drop, I'm going out there and other investors are going out there and they're going ahead and paying that higher interest rate to get the deal today because they know they can always refinance it down the road.
They're also learning very good negotiation skills, just like I was talking about seller concessions and things like that. So they might be paying a higher interest rate, but they're going in and renegotiating the price. interest rates should not be the thing that stops you from, investing in real estate. Again, interest rates change, missed opportunities do not.
So, what does a changing market right now, the buyer's market, mean for investors? Well, number one, better conditions. there's more inventory. I'm not gonna say always less competition because it depends on where you're at. I'm in the DFW area and we have a lot of investors here, but if you're looking in at off-market properties, there's less competition. And then there's better focus. we're not when we're not in a bidding war, we don't have to go, my gosh, am I gonna pay five thousand dollars more for this?
You know, you can really get focused on the property itself, and that's why it's a better environment for investors.
So the one question that you should always be asking yourself is this.
Does this property move me closer to financial stability? So we've talked about how that one property can kind of propel your income. So if something happens to that one source of income, then you have your real estate to fall back on. And when you buy your first rental property, when you buy the first one, then the second one will be easier and the third one will be easier. You'll still have to do all of your due diligence, but when you can
Answer that question. Does this property move me closer to financial stability? You know, the goal isn't perfect timing, the goal is progress. How are you moving forward?
So let's talk about what's changed and just three markets that I know about. So in Dallas, there's more inventory. So what does that mean? Well, there's more properties to choose from. Sellers are more amenable to negotiations than they were, let's say 24 months ago. In Frisco, still a lot of premium prices, but even in a premium market, the houses are sitting a little bit longer.
And then in Fort Worth, they have more inventory, they have a lower price point. So guess what's happening? Because Fort Worth overall compared to Dallas and Frisco has a lower entry point for single-family homes for investors. Then guess what's happening? You can actually negotiate below that. So some of the best deals that I've seen so far have been coming out of micro areas in Dallas and the Fort Worth, Texas area.
So in changing markets, we'll watch YouTube videos, we'll watch the news, we'll watch, the interest rates But what we're missing out on is that when the market is changing, that actually, helps you to become a better investor because it almost forces you to become a better negotiator. So imagine this: you are in a market where it has turned into a buyer's market.
Properties are sitting on the market longer, and now you can go in, and even if you're new to this, even if you're brand new, you know, you can have Chat GPT help you write a script about how to talk to a seller. But if a seller is motivated enough and you come to the table with a reasonable offer, and maybe you're asking for you know $4,000 of seller concessions and you want them to lower the price by $5,000.
maybe you'll meet somewhere in the middle, but the thing is that you can ask. You can ask, ask, ask. And because there's more inventory, that means that you can put more asks out there and there's more opportunity for you practice how to negotiate. So that's the cool thing about a buyer's market is that since there is more inventory, there's less bidding wars and sellers that have been sitting on the market 60, 90 days. those folks wanted to sell their property
Bottom line, some sellers just will not budge, and that's okay because you know what? You're free to just walk over to the next property because there's more inventory. So you don't have to knock yourself out trying to get the seller to lower their price when they are just stuck that their property is worth this. So you have to remember what you're willing to pay and does it meet your investor numbers.
So what steps should you be taking right now to be prepared for this market, to be ready to go in and get your deals? Well, number one, you need to get pre-approved. You need to figure out, okay, where is your financing going to come from? And that doesn't mean traditional lenders. That means do you have your hard money line lender lined up? Do you have a private money lender? before you start offering to purchase properties, you have to know where where is the money coming from? How are you gonna buy that property? So that's number one.
And then you can evaluate your different options.
You can compare different loan and loan types and strategies. So for me, after I've been doing this for such a long time, then I know depending on the type of property I'm getting, I'm gonna have to maybe have money for a down payment or not. it depends on my strategy, it depends on the condition of the property. So building a network of lenders, whether it's hard money, private money, regular lenders, you know, start talking to loan officers about hey, I want to buy a single-family home, this is my price range.
And they will let you know, maybe there's some things you need to clean up on your credit. They're going to ask you questions and then you can be more prepared because when you go out and you start negotiating, number one, you can be more aggressive in your negotiations. If you know for a fact that you only have a budget of let's say $250,000 and this seller is stuck on $275, you can go to the seller and say, hey, I can't pay $275, I can pay $250,000.
You know, what can how can we get there, right? And there are ways to get there, and you will be the person that brings a solution to getting their house sold. And then stay patient. Again, don't be emotional. It's business. Know your numbers. so number one, get a pre-approved. Know where the money's coming from. Number two, work on your negotiation skills, and your confidence to come to the table.
Number three, know your numbers so that you can tell a seller this is exactly what I can pay for your property and or asking for seller concessions. So for me, I I'm a real estate broker and I like to use my commission, if you will, as a negotiating point. That if they if I purchase their property, they don't have to pay that, commission to my side of it because I'm the end buyer. And that's a huge negotiation tool I have in my tool belt.
And the thing about financing is right now no one knows exactly where the interest rates are gonna go. But as a buyer, you have leverage with sellers and it doesn't just evolve around the interest rate. So there's all kinds of things that you can do besides worrying about the interest rate. And when the interest rate changes, you can always refinance if it if the interest rate goes down.
So me personally, I have purchased properties in a seller's market, a buyer's market, a down market, an up market. And it's not that I know how to predict the market. That's not how I was able to buy investment properties. But what I did know was where were the hot markets, where was their appreciation. I knew my three numbers, you know, I knew my rental vacancy. So I knew my numbers and I knew my
market area and that is how I'm able to buy in any market.
So when you understand the market, whatever market that you're in, if you understand how to leverage what you can in any given market, then you too will be a successful real estate investor.
So one thing I want you to ask yourself is not, you know, should you buy now, but this is the question I want you to think about.
So what financial options do I have today that offer me opportunities to buy properties that I didn't have a few years ago or even last year or even last month?
But here's what I can tell you that a changing market creates opportunity every single time. you don't have to know every single strategy, but just know that there's a whole lot of options. There's more flexibility, that you have time to evaluate a property. You don't have weeks on end.
But you have time, you have some breathing room when there's a longer days on market. you can structure deals that work for you because again, you were prepared, you said, okay, I went and I got evaluated, pre pre-approved for this much money. This is how I'm gonna buy properties, and then that gives you more power. leverage that buyers haven't had in years,
So now is the time to start looking at markets that you want to invest in because it is a really starting to be an awesome time for anyone to enter the real estate investing market.
So if today's video got you thinking differently about your options, I've put together a collection of tools, guides, and resources inside of our resource center to help you evaluate opportunities, analyze deals, and make more confident investing decisions. And you'll find that link below.
