Is there Black Friday for real estate? Episode #280

Hello. Welcome to Todd Miller TV. Today is Black Friday. For those of you who don’t know what that means, Black Friday is the retail day of the year when there’s all kinds of sales. It’s the day after Thanksgiving. The stores open at 4:00, 5:00 AM and everyone shows up and they get smoking deals because they want to get the Christmas buying season on.

So it was a gimmick made up by the retail industry to increase sales and it’s a discount day. I think everybody knows it for what it is and some of the arguments that I would make personally is well, if someone is going to buy an item, you’re just discounting a product they would have bought anyway. You may be not getting them to go in and buy something that they wouldn’t have bought. So maybe it’s not that big of a deal but there’s a huge sales on that day.

So you’re saying, “Well Todd, this is a real estate blog. What does this have to do with real estate?” Well, why isn’t there Black Friday for real estate? I mean you’re probably asking that. Like why isn’t there a day where I can just go buy stuff super cheap in the real estate market?

Actually that’s a trick question because there is. It’s called today. It’s called for the last two years. You would go out and get a house. It used to be worth 300 grand and get it for 100 still or 120 and here’s the amazing thing is when the house was worth $300,000, it probably got 1200 bucks a month rent and now that it’s worth $120,000, it’s still probably worth $1200 a month in rent.

So you’re probably wondering, “Well Todd, that’s not really a deal because the whole market is down.” Yeah, but it’s going up. I mean I said two years ago on this blog that the market – we hit a bottom and we actually calculated that date, believe it or not, to August of last year. Last August, it has been 15 months and that’s when we predicted about just nine months before that. We said it would probably happen the end of the summer or in the year. We hit bottom and they start coming back up and that’s about what it did and there has been a lot of factors involved in that.

The economy is still kind of not too great and the local Las Vegas economy is not super great but there’s a lot less inventory and it’s not coming back. You’ve heard these things. In 2013, there’s going to be all these REOs at the market. We’ve seen nothing to show that that’s going to actually happen. Short sales are still happening at a pretty rapid pace so that’s eating up all that future shadow inventory. It has been eaten up through short sales.

So if you’re a buyer, and you’re going to buy an investment property, it’s Black Friday. It’s going to be Black Friday. Probably for a couple more years I think before it starts to really start picking up.

Forget the national numbers and forget what you hear about what they report because that all looks back and it doesn’t include all segments. What most people want are what I call a three-two. Three-bedroom, two-bath, their investment properties. They’re the ones that have the best – traditionally the best to rent. They’re the lowest cost. You get the highest return. That’s what everybody wants to buy and those are the properties that are pretty high demand right now, multiple offers on them.

But they still long term represent great value. Some of you know who are following the blog I’ve been buying properties over the last few years. I’m getting all my investors to buy a bunch of properties. They’re easier to rent. They give you great return. So the moral of the story is the message for today on Black Friday, because today is the day after Thanksgiving 2012, is buy those properties while you can and just hang on to them. I think it’s a great investment and you’re going to get rent out of them and it’s going to be great.

So anyway, I thought I would share that with you and that’s my outlook for the next couple of years moving forward and what today Black Friday means. So that’s my update for today and hope to see you on another video. Thanks.