How To Get The Best Deal On Every Global Real Estate Investment You Make
A friend in Europe called this week to ask if I thought my Global Property Advisor members would be interested in bank foreclosure deals in Mediterranean countries. My friend has been active as a broker and developer in Spain and Croatia for more than a dozen years and has contacts elsewhere in Europe, as well.
I assured him that, yes, this is the kind of opportunity I’m keen to bring my Global Property Advisor members, and I’m reviewing details for a forthcoming report.
The kinds of extreme bargains my Euro-market contact is telling me about are available in many markets right now. The key is locating them. You won’t find these kinds of deals on the Internet. You have to have “boots on the ground,” as they say, either your own or those of a reliable contact (like my friend), someone active in the market where you’re shopping.
As another real estate colleague puts it, “The best deals never make it to the window,” referring to the listings you see in the front windows of real estate agencies. In an active market like Paris, for example (a market I’ve gotten to know well over the past half-dozen years), the properties you see posted in real estate agency windows are those the agency is having trouble selling. Typically, these window listings have been on the market much longer than average, typically because they’re over-priced.
The best deals, on the other hand, are passed along behind the scenes. This is how we found our apartment in Paris. The agent we were working with hadn’t even signed the listing agreement for the place when she told us about it. The price was low, because the about-to-be-divorced Frenchwoman owner wanted a quick sale. We viewed and made an offer on the apartment before it was officially listed for sale.
Yes, we were lucky, but I believe you can help to make this kind of luck for yourself. To be in a position to find out about these kinds of opportunities (motivated sales that haven’t even officially made it to market, for example), you need to be “in the market.” That is, you need to be on the ground looking, speaking with agents, and making it known that you are a serious buyer. Sending e-mails and promising to fly to the country as soon as the agent finds what you’re looking for won’t get you far. A serious guy gets on a plane.
By putting yourself in the market, you increase your chances that an agent will think of you first when an especially interesting opportunity comes his way. You don’t necessarily need to be physically present in the country at the time, but you need to have built up personal relationships and credibility on the ground.
I’m stating the obvious, but I’m reminded regularly of the importance of making an effort to make yourself known in any market where you’re interested in investing. Readers write to say how disappointed they are with the service they are getting from the real estate agent they’re communicating with via e-mail in Country X. Or they write to tell me they think the prices they are finding on the Internet are too high and that there are no good deals to be found in Country Y.
I’ve come to think of the Internet as the virtual shop window for real estate agencies worldwide. As with those listings you’ll see in the front windows of agencies in Paris, the ones you find on the Internet are posted for the uninitiated market. Only those who don’t know any better, frankly, would buy a piece of real estate sourced over the Internet without first making an effort to get to know the real-world market (as opposed to the virtual one).