After nearly a year of talks it looks like I’ve finally won a few members of Vizion over to my way of thinking. For quite some time now I have felt that Vizion should switch its focus from fixing and flipping properties to fixing and holding properties. Not for appreciation but for the long term cash flow.
As many of you know flipping properties is a risky business. It seems that most of our time is spent waiting around for properties to sell. Granted it is a great feeling to make $30,000 in a matter of days but more often than not the money does not come that fast.
The average days on market for one of our property flips is about 60 days. Granted that number does change quite considerably depending on the time of year. During the spring, summer and even the early part of fall we can expect to get offers relatively quickly. But during the long often brutal winters we can almost always count on none of our inventory moving again till spring.
I think many of us in the real estate profession expect a bit of a slow down during the winter months especially with the holidays and such but many new investors doing flips get a little scared when their property is just sitting on the market without as much as a phone call for days and days.
Personally I’ve always felt that real estate was more of a long term investment. Perhaps that’s the reason I’m so big on rentals. I think it’s the words “long term investment” that scare some of my investment clients. You’ve got to remember many of these clients signed on with us because they’ve heard of great track record of flipping properties. But getting them to change their investment thinking is only part of the problem.
Part two of this issue were the members of Vizion. We had all grown a custom to flipping properties. Sure we had a few dozen rentals and quite a few lease options but investing in rental property was were we had started. Many of us felt that we had moved past this stage of investing. It didn’t matter to us that Kansas City was one of the best rental markets in the nation or that we got phone calls almost every week from out of state investors looking for turn key rentals. We were flippers now.
I think it was the ten or so investors that came to Kansas City last week that changed our attitude towards investing. This group of investors while interested in flips were more interested in rentals. They had come from all over the country with the sole intention of capitalizing on the Kansas City rental market. I think seeing all these investors passion for rentals really helped to change our perception of buying and holding property.
2009 is shapping up to be an interesting year for Vizion. Hopefully with us focusing on rentals it will also be a less stressful year.