I spent 15 years in the TV news business before I got into real estate investing. During that time I worked for 11 different news directors.
What does a news director do?
The news director is in charge of the news department – from the video editors to the cameramen to the producers to the reporters to the news anchors. The news director is sort of like the head coach of a football team. When things go well they get most of the credit. And when things go bad they get all of the blame.
I remember one of these news directors quite well. His name was Bob Henry.
Bob told great stories. He particularly liked the one about a guy his news crew interviewed for a breaking story. The dude lived next door to a house that was burning down. Looking directly at the TV camera, he blurted out “I knew I was in trouble when I came home to find the news helicopters hovering over my house!”
That’s sort of how I felt when I read the headline in the Arizona Republic this weekend: Big Profits for Home-Flippers Signal Phoenix-area Rebound.
You know you’re in trouble when the local news media starts reporting about the big profits fix and flip investors are making in your city. It means the horse is out of the barn. Every Tom, Dick and Harry with a cordless drill and $50,000 in their bank account starts descending upon Phoenix looking to make a quick buck.
The truth is those big profits aren’t so easy to come by. Good deals are scarce. Great deals even scarcer.
Professional bidding service companies dominate the trustees’ sales held at the courthouse steps. They represent well-funded buyers with streamlined fix and flip and/or buy and hold operations.
Thinking you’ll find a great deal on the multiple listing service instead? You can bet every Realtor in town is scouring the MLS for diamonds in the rough.
Is there money to be made here? Yes. Are the juicy deals easy to find? No. Be prepared to get outbid – at the auction and on the MLS, over and over again. You will most likely have to overpay for a house because values here are on the rise.
And when you do this people won’t refer to you as an investor anymore. You’ll be called a speculator.