Buyers have the advantage right now when it comes to Myrtle Beach Oceanfront. Inventories are high and buyer interest is low. Why? Because the cash flow gap continues to widen. Rental rates can’t support the current price levels.

Momentum Investors – people looking for quick appreciation – are looking elsewhere. In a slow market, they can’t recoup the carrying costs – especially if they buy at today’s prices. So, a new buyer profile is emerging – the Value Investor.

Value Investors – people looking for intrinsic oceanfront value – want property for their personal use (family and/or corporate) and are looking for long term appreciation. The cash flow gap is mitigated by large down payments and/or the tax advantages.

Buying Strategies: Are you a Value investor? If so, here are some strategies for finding good values in today’s oceanfront market.

1. Start Shopping Now – the off-season is the best time to find a bargain. This Winter has been very slow, but the market is expected to pick up in the Spring. You have a three or four week window of opportunity to shop for a bargain right now.

2. Prepare for Rejection – make a low offer and expect to be turned down. Make a second or third offer, if they are willing to negotiate. Be prepared for several “no’s” before you get a “yes.” And, don’t get your heart set on one particular unit, or even one particular resort – you have to be willing to walk away.

3. Consider Makeovers – bargains sometimes need cosmetic work, or upgrading, that the current owner doesn’t want to be bothered with, or can’t afford to make. Look for the “ugly duckling.”

4. Make Offers on Several Condos/Resorts – some resorts have large inventories of similar units. You’re more likely to find a willing seller if you make offers on 10 units than on only one or two. Looking for units in a couple of resorts will further increase your chances.

5. Work with a Buyer’s Agent – onsite agents and listing agents are not working for you – they are working for the developer or seller. Find an experienced buyer’s agent who will represent you and your best interests exclusively. She/he will be knowledgeable about the oceanfront market, will do the leg work of presenting several offers on several units, and will help you negotiate a deal.

6. Ignore Listing Prices – they only reflect what the owner hopes to get and may not reflect current market reality. Do your own market analysis with the help of your buyer’s agent and then determine what you are willing to pay. In the end, market value is determined by what a unit actually sells for.

7. Look for Motivated Sellers – you already have the advantage of a slow market, now look for owners that are anxious to unload their unit. Some listings actually say “motivated seller” - most don’t. But you never know if a seller is motivated until you make an offer. Most sellers won’t give you that information in advance.

8. Offer Incentives – give owners a reason to take your offer. Offer to close quickly (30 days) with few or no contingencies. Pay cash, or line up your financing in advance. Price out needed improvements in advance then offer to buy the unit “as is.”

Value Investors will need solid financial resources in today’s oceanfront market – even if they do find a bargain. They will need to make large down payments or be able to carry significant negative cash flows. And that will work out just fine for some buyers – but not everyone.

Oceanfront Value Investors have to love Myrtle Beach, love the oceanfront and love the resort they’re buying into. Then they can enjoy their new condos and wait a few years for long term appreciation while 79 million “baby boomers” with their incredible buying power continue to come to the beach to live, work, play and retire.
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Are you a Value Investor looking for Myrtle Beach oceanfront?
Contact Barbara Chartier at 843-421-6680 or barbarachartier@century21.com .

Coming – “Myrtle Beach Oceanfront: Selling strategies in a slow market.” (Part 3 of 3)