The BP oil spill has not been contained and oil could continue to leak for another few months. If there is a tropical storm or hurricane and a storm surge brings the oil inland, what will that do for business or real estate? Are people starting to panic?
Just spoke to a person who has been looking to buy real estate in Florida for many years. Four years ago, the condo was put up for sale and the housing market dropped. The property did not sell. One and one half years ago, the owner received an offer equal to 53% of the original asking price. Now with the pending oil spill potential disaster, he panicked and just sold the property for 33% of the original asking price.
The investor decided in this case to low ball many different properties. He wanted a property but only for the right price. If someone was desperate, he would buy. Since his is paying cash, he was not worried about the potential oil spill, he had sufficient capital to weather the storm. He wanted to “bottom feed”, try to buy at the bottom of the price range, get a good deal, wait for the economy to recover. he was preying on people panicking.
Will this happen with businesses also? Will people panic to get out and sell their business just in case their business is worth considerably less or does not survive if an oil surge takes place. What does this mean? It means that opportunities may exist depending on what happens with the oil spill. If the spill grows and affects Florida or the east coast, will there be businesses panicking that this could affect them? Will this create buying opportunities?
For those who are willing to gamble, there could be a buying opportunities to get businesses far cheaper over the next six months compared to a normal business environment.