Beating the Competition in Short Sales

Short SalesAnalyzing the Commercial Real Estate Investment Rush

If you know a little about economics, you already know that profiting in any business—including the business of making short sales—is always more trouble than it first appears to be. This is because of competition, or the actions of others that cut into your profits. All your competitors have much of the same resources you do as an entrant into the commercial real estate market. They have access to the market itself, they have all the internet resources and many of the same news sources. The ability and determination of the real estate investor in question has a significant effect on one’s chances for success, but chances are not guarantees.

Reviewing Bank Short Sales

Economists know that the more competition there is, the less opportunity for profit there is. Only if you can find some way of distinguishing yourself from competitors can you make real profits in short sales. This is because many of your best tools are well known to rivals. And those that aren’t known will eventually become known—trade secrets eventually get out despite the best efforts to the contrary. In the internet age this is doubly true. This means that although it can mean greater risk, you are well off in unpredictable real estate markets with a high rate of property turnover. Established commercial real estate investors who are more risk-averse will likely stay away.

The Tricks to Make Money in Real Estate

So how does competition lead to lower profits, in general? The answer is tied to the preferences of banks, says real estate investor Karen Hanover. You can use Master Lease Options to flip commercial properties and make profits, but your actions can be traced either by another short seller or even the end buyer that you hope to flip to! Then they can make a counter offer to the lender, possibly offering to buy the property outright and foreclose on it themselves. If they have a funding source, the bank is very likely to agree. Then they can offer the foreclosure threat to get you to sell your option—you may end up making some profit, but not very much. One way to get around this is to have your own line of funding—that way you can buy the bank owned property or at least offer the funding as proof. Banks like secure loans, after all.

Be at the Head of the Commercial Foreclosure Goldrush

Dealing with competition is a crucial factor for any business. Keep your ear to the ground and mislead people who come after you—it’s the tried and true way to get ahead.

Copyright (c) 2010 Jack Bosch

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