Tommy Dobczyk compares distressed real estate to clearance racks: properties sellers want gone fast, priced to move. Buy only when you can add value through repairs and get a deep discount, ideally 90% off. Time matters more than money when you have the skills to fix what's broken.
When it comes to brokers, are most of them trying to manipulate the situation and trying to manipulate the sale?
Like, again, when you, when you go shopping, when you're doing real estate, imagine you're going shopping on the clearance rack at Macy's, right? And you know, at the clearance rack they've got like one or two of everything nobody else wanted, right? These are all things that nobody else wanted, so they're on the clearance rack for a reason, because because they didn't want to get hung back up, or they can't go back to the store, whatever. So does it mean that it's on the clearance rack that you should buy it? No, you're going to find the one that fits you, is comfortable, has all the buttons on it. Like, maybe it went to the clearance rack because the sleeve is ripped. Are you going to buy it? No, only if you know how to sew, you know. So if you know how to sew it back up, yeah, great. But if it's only 90— if it's only 10% off with a sewn— with a rip, rip sleeve on it. Nah, I'm going to need it the other way around. I'm going to need to buy it at 90% off, not 10% off. Right. So because if I got to do some work to it and create a Tommy, you know, a Tommy shirt out of it, like, that's the way that I look at real estate is that these are all on the clearance rack. They're trying to get rid of them. Right. And so if they're trying to get rid of them, they have to be negotiable either on price.
We lost you.
Time. And when I say, Tommy, are you going to hold it for me? Because here's— buy something, I have to put it in holding, have holding costs on it until I get, get done with it, with whatever I'm going to do. Right. So if I can get the current owner to do the holding costs for me and that's all I got to worry about is just getting the work done on it till it's— until I can make money off of it and they hold the, hold the thing with holding costs. That's, that's doable in some situations because then when I buy it, it'll have a bigger value to it than what they sold it to me for. Because they, they did it and like they held it for 6 months or a year. And so there's been a couple of those where, like, we can, we can do those. And, and it's, and it's, you know, beneficial. But again, we're negotiating time over money. And I'd rather have time than money. I'll pay full price. If I can, if I can get the time to make it worth more money. because I'm good at that, right? I'm good at sewing the sleeves on, right? So that's the way I look at these deals. And, and if you can look at them that way too and be like, look, we need time more than money, it gives us a chance. But in, in these— all these situations we've had right now, they're, they're interested in having time and money both on their side, and it, and it leaves us with like— we're like, sorry, we can't do both, you know? So you just have to walk away.
