Category: Fixers and Raw Lofts

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The Art of Commercial Real Estate: Insights from Dolf de Roos

In the realm of commercial real estate, the opportunities are as vast as the landscapes they occupy. One of the most seasoned veterans of this space is Dolf de Roos, an influential investor whose strategies and insights have helped countless individuals navigate the often complex world of property investment. Taking a page from De Roos’s book, let’s delve into the wisdom he shares through his enlightening Youtube Shorts and understand how a mix of shrewdness, foresight, and sometimes, a simple trick, can turn an ordinary deal into a goldmine.

Finding Diamonds in the Rough

Dolf de Roos’s story about the smallest residential property he’s ever bought isn’t just an anecdote; it’s a lesson in the importance of due diligence and the power of perception. When he came across a $20,000 property with a lakeside view, most would dismiss it as a mistake. However, De Roos’s intuition led him to a golden opportunity. This isn’t merely about finding cheap properties; it’s about recognizing potential where others see none.

The Stapled Check Technique

De Roos shares a clever technique that could be a game-changer for real estate negotiations: the stapled check. By physically attaching a check to your offer, you create a psychological anchor, showcasing commitment and readiness. This isn’t a high-risk move, but it is a high-reward strategy. It shows that you’re serious and ready to proceed, pushing the seller towards a favorable decision.

Repurposing Real Estate for Profit

De Roos also touches on the profitability of repurposing abandoned or underutilized properties. He sees beyond the current dilapidated state of such buildings and visualizes their potential. It’s an inspiration to look at real estate not just for what it is, but for what it could be. The real magic, and profit, in commercial real estate often lies in the transformation from what’s currently there to what could be.

The Takeaway

Dolf de Roos’s approach to commercial real estate is more than just buying and selling property; it’s about vision, strategy, and psychological savvy. Whether it’s buying undervalued properties, using the stapled check technique, or repurposing buildings for better use, his wisdom is a testament to the depth and breadth of strategies available in commercial real estate. His insights serve as a powerful reminder that with the right mindset, every property holds a promise, and every deal has the potential to be transformative.

For those looking to learn from a master, De Roos’s Youtube Shorts are not just snippets of advice but short courses in the art of property investment. They teach us that in the vast chessboard of real estate, the smallest move can sometimes lead to the greatest victory.

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Unlocking the Potential: Commercial Real Estate Strategies

Commercial real estate is a landscape filled with opportunities for the astute investor. With the right strategies, one can uncover exceptional deals, particularly when it comes to distressed properties. These tips and tricks can not only help in finding these hidden gems but also ensure that your offers stand out, even when they’re on the lower end of the spectrum.

Identifying Distressed Property Deals

The hunt for distressed properties often leads to lucrative deals. These properties are typically undervalued due to the owner’s financial difficulties, maintenance issues, or other stress factors. To find these deals:

  1. Network Extensively: Connect with real estate agents, attorneys, and bank personnel who can tip you off to properties that haven’t hit the market yet.
  2. Public Records and Auctions: Look for properties in pre-foreclosure, foreclosure, or those that have tax liens against them through public records.
  3. Direct Outreach: Reach out to owners directly. Those who have inherited properties or are landlords with problematic tenants might be willing to sell quickly.
  4. Online and Offline Listings: Use online platforms but don’t ignore the traditional listings in newspapers and real estate publications.
  5. Drive for Dollars: Drive around the neighborhoods and look for signs of distress like boarded-up windows or overgrown lawns.

Crafting a Low Offer That Wins

Submitting a low offer can be tricky, but with the right techniques, it’s possible to have it accepted:

  1. Show Immediate Value: Like Dolf de Roos’s strategy of stapling the check to the offer, show that you are serious and ready to proceed by making a tangible commitment.
  2. Rapport with the Seller: Establish a good relationship with the seller. Understand their needs and tailor your offer to address those needs.
  3. Strong Earnest Money: Increase the amount of earnest money you’re willing to put down to show commitment.
  4. Flexibility: Offer flexible terms, such as a quick close or a longer escrow period, depending on the seller’s circumstances.
  5. Justify Your Offer: Present a logical reason for your low offer, such as repair costs, market conditions, or cash offer speed.
  6. Remove Contingencies: The fewer the contingencies, the more attractive the offer. Be cautious, though, not to expose yourself to undue risk.
  7. Personal Touch: Include a personal letter explaining why you want the property. Sometimes a personal connection can sway a decision.

Leveraging Distress to Your Advantage

When dealing with distressed properties, the key is to provide solutions to the seller’s problems:

  1. Assume Liabilities: Offer to take over any liens or back taxes. This can be a significant relief to the seller and make your offer more appealing.
  2. Quick Closings: Be prepared to close quickly. Sellers in distress often value speed over a slightly higher offer price.
  3. Renegotiation: If a property has been on the market for a while, don’t hesitate to renegotiate the terms. Sellers might be more willing to accept a lower offer after experiencing market realities.

Do the Deals

Commercial real estate is a game of numbers, strategy, and human interaction. Finding distressed property deals and getting a low offer accepted requires a mix of analytical skills and psychological insight. By employing creative tactics like the stapled check, building relationships, and providing solutions that address the seller’s stress points, you can unlock doors that seemed firmly closed. Remember, each distressed property comes with its unique challenges, but for those willing to put in the work, the rewards can be substantial. Whether you’re a seasoned investor or just starting, the commercial real estate market holds opportunities ripe for the taking. With these strategies in hand, you’re well on your way to making the next great deal.

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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Broker DRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Text and photos created or modified by artificial intelligence. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.

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Unveiled: How Savvy Investors Are Making Millions in a Stagflated Real Estate Market! — Explosion of Distressed Properties in Los Angeles

A Comprehensive Guide to the Week’s Distressed Properties in Los Angeles

REAL ESTATE NEWS (Los Angeles, CA) — The current economic landscape, characterized by the unlikely cohabitation of stagnation and inflation – or stagflation – coupled with a drastic increase in interest rates, has cultivated an atmosphere of deep economic pessimism. It has dulled the vitality of the real estate market, with the once vibrant property sector witnessing a marked slowdown. An influx of distressed properties, no longer maintainable by their struggling owners, has flooded the market, causing a chilling echo of the 2009 financial crisis.

Stagflation, Interest Rates, and the Real Estate Market: An Unprecedented Economic Challenge

Stagflation, a term that describes the cruel economic phenomenon of stagnant growth coupled with high inflation, has become a household term once again. With the unexpected jump in interest rates in recent years, the landscape of the American economy has been drastically altered, and its impact is being keenly felt in the real estate sector. A sense of economic pessimism looms over the nation, and the real estate market, which is typically a beacon of prosperity, is at its most tepid.

These developments are eerily reminiscent of the financial crisis of 2008-2009, which saw a dramatic downturn in the housing market, with a surge of foreclosures and distressed properties hitting the market. However, the economic conditions today diverge from those of the previous crisis in a significant way. Despite the widespread economic hardship — characterized by some as the ‘Greater Depression of the 2020s’ — home prices remain stubbornly high, largely due to the unvanquished inflation. This phenomenon has left many industry watchers and economic analysts scratching their heads, as they attempt to make sense of this unique and challenging situation.

While the 2008 financial crisis was characterized by rapidly falling home prices, the current economic climate is marked by a paradoxical combination of soaring inflation, economic stagnation, and persistently high real estate prices. Stagflation, as this situation is known, is contributing to a profound sense of economic uncertainty. And yet, the real estate market, while certainly subdued, has not collapsed in the way many predicted it would. This resilience is largely due to inflation keeping home prices elevated, even as the wider economy struggles.

High interest rates are also playing a crucial role. They are effectively discouraging buyers, which, in turn, contributes to a slowdown in the real estate market. Yet, those same high interest rates are also fueling inflation, which keeps home prices high. This creates an unexpected feedback loop that reinforces the stagflation conditions. Because most home prices are not crashing much, and equity is staying in the healthy range, more home owners are staying put longer. Real estate agents, on the other hand, are going broke and scurrying away. There are only about 1/3 as many real estate transactions happening recently, as compared to previous years.

The Los Angeles real estate market is a melting pot of different opportunities for both buyers and investors. One specific sector of this market that has continuously shown promise is the distressed property market. These are properties that are under foreclosure or up for short sales, including those that are distressed due to bankruptcy, probate, lawsuits, or divorce. They may also include properties in need of some tender love and care (TLC), vacant lands, bank-owned properties, and much more.

Understanding these distress signals in the property market could unlock significant opportunities for home buyers and investors alike, and that’s why we’ve prepared a comprehensive analysis of this week’s distressed properties in Los Angeles. The properties are being sold under varying conditions such as as-is, cash sales, motivated sales, and relocation, among others.

This week’s top distressed L.A. property picks:

  1. $649,000, Los Angeles, 2 bedrooms, 2 baths, 1193 SqFt, MLS# 23-240071, 600 W 9th St #309, Yes Pool, 1975 YB, $616.00 HOD, 61 DOM, Open House: 08/06/2023 (2:00PM-5:00PM)
  2. $679,000, LOS ANGELES, 2 bedrooms, 1 bath, 1232 SqFt, MLS# 23-269053, 1325 S Masselin AVE #1, No Pool, 1958 YB, $350.00 HOD, 29 DOM, Open House: 08/06/2023 (2:00PM-5:00PM)
  3. $689,000, Los Angeles, 2 bedrooms, 2 baths, 1394 SqFt, MLS# 23-290963, 416 S Spring St #509, Yes Pool, 1914 YB, $951.59 HOD, 42 DOM, Open House: 08/06/2023 (1:00PM-4:00PM)
  4. $745,000, LOS ANGELES, 2 bedrooms, 2 baths, 1305 SqFt, MLS# AR22166569MR, 645 W 9th ST #216, Yes Pool, 2006 YB, $848.10 HOD, 156 DOM
  5. $789,000, LOS ANGELES, 2 bedrooms, 2 baths, 1290 SqFt, MLS# 23-288553, 2939 Leeward AVE #403, No Pool, 2019 YB, $431.00 HOD, 20 DOM, Open House: 08/06/2023 (1:00PM-4:00PM)
  6. $795,000, LOS ANGELES, 2 bedrooms, 2 baths, 1366 SqFt, MLS# GD23132279IT, 1887 Greenfield AVE #212, Yes Pool, 1974 YB, $625.00 HOD, 42 DOM
  7. $810,000, Los Angeles, 2 bedrooms, 2 baths, 1234 SqFt, MLS# SR23144676MR, 800 W 1st St #2010, Yes Pool, 1968 YB, $1,530.00 HOD, 118 DOM
  8. $875,000, LOS ANGELES, 1 bedroom, 2 baths, 1260 SqFt, MLS# WS22236561MR, 7250 Franklin AVE #407, No Pool, 1964 YB, $903.00 HOD, 10 DOM
  9. $899,000, LOS ANGELES, 2 bedrooms, 2 baths, 1537 SqFt, MLS# SR23057688CN, 10701 WILSHIRE #604, No Pool, 1964 YB, $1,600.00 HOD, 89 DOM, Open House: 08/06/2023 (1:00PM-4:00PM)
  10. $998,000, Los Angeles, 2 bedrooms, 2 baths, 1483 SqFt, MLS# 23-277793, 11706 Montana Ave #311, No Pool, 1973 YB, $528.00 HOD, 30 DOM

In addition to these, there are several other distressed properties scattered across Los Angeles and throughout California, each offering unique opportunities for buyers and investors. From properties that are ready to move in, to those that are unfinished, raw, or even ready for a tear-down, there is something to suit various tastes and investment preferences. Each property comes with its unique features, pricing, and potential for returns on investment.

In a peculiar departure from the script of the past, inflation remains unchecked, stubbornly propping up home prices in real terms, even as we grapple with the harsh realities of the Greater Depression of the 2020s. This creates a challenging paradox: even amidst an overabundance of properties for sale, the elevated prices, fueled by unrelenting inflation, create a barrier that prevents many potential buyers from taking advantage of the situation.

Meanwhile, the amount of distressed properties on the market has exploded. This is not only a product of the current economic downturn but also an indicator of its severity. However, unlike in 2009, when low prices led to a surge in property sales, the current high prices — maintained by inflation — are causing these distressed properties to languish on the market. This situation underscores the unique economic conditions that distinguish the current downturn from previous ones.

While this state of affairs is undoubtedly challenging, it also provides opportunities for savvy investors, particularly those with plentiful resources. Despite the economic gloom, those with great means are finding value in the distressed property market, picking up assets in anticipation of a future rebound. As the rich get richer and the poor get poorer, the valuable locations are hot. While sketchy properties plummet run price, Beach homes and other quality real estate are doing better than ever.

The current situation serves as a reminder of the cyclical nature of economies, and while comparisons to previous downturns are useful, each crisis brings with it a unique set of conditions and challenges. In this ‘Greater Depression of the 2020s,’ we are grappling with the stubborn foe of inflation, making the road to recovery that much steeper.

Ultimately, navigating these troubled economic waters will require innovative thinking, resilient policy-making, and perhaps most importantly, the courage to make tough decisions. The real estate market, a cornerstone of the American economy, will play a critical role in the recovery process, just as it has done in past downturns. However, success will depend on our ability to understand and adapt to these unprecedented economic conditions.

As a prospective buyer or investor, it’s essential to conduct a thorough due diligence process before making a purchase decision. Remember that while distressed properties can be attractive due to their typically lower prices, they may also come with their own set of challenges. For instance, properties described as “ugly” may require significant cosmetic work, while those under litigation or bankruptcy may involve complex legal processes. Therefore, it’s advisable to consult with real estate and legal professionals during your purchase process.

For international types, Mallorca, Spain has made a tidy sum over the last 12 months. China’s housing market is so worthless, they are rushing to buy American homes.

The distressed property market in Los Angeles is brimming with opportunities. With careful research and due diligence, buyers and investors can find valuable deals that meet their specific needs and investment goals. As with any investment, it’s crucial to consider the potential risks and rewards, and to make informed decisions that align with your long-term goals.

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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Broker DRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Text and photos created or modified by artificial intelligence. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.