Foreclosures are up. Property values are down. Credit is virtually impossible to get. On the surface it may seem like the worst time in history to invest in real estate, when, in reality, the time has never been better.
Savvy investors know the No. 1 rule of real estate: buy low and sell high. There may never be a better time to buy low than right now. With some foreclosures selling for as much as 70 percent off their current value, there are deals to be snatched up.
The key to making money in real estate in this downturned market is knowing what to do with those properties until the market rebounds.
Instructions
Becoming a Smart Investor
Find the right properties. Not every property is equal. Just because a home is selling for a fraction of its worth right now doesn't make it a good investment. Just ask the myriad house flippers in recent years who bought homes in dire need of repair only to be stuck spending a small fortune fixing them up with no buyers to take them off their hands when the work was done.
When looking for good real-estate investments, consider more than the price. Also look at: the neighborhood (neighborhoods close to schools, with low crime and close to amenities are easier to sell); the condition of the house (with such a large foreclosure inventory available, it doesn't make as much sense to buy an investment property in need of thousands of dollars of repairs); the size of the property (bigger family-style homes are simply easier to unload than smaller condos or townhouses); the ability to rent it now; potential profits; and more. Make sure that you really can make a profit on a property before buying it.
2
Find properties. There are a lot of ways to find good investment properties these days. Ask around or advertise for homeowners who face pre-foreclosure and are willing to sell now to get out from underneath a burdening mortgage.
The second is to hook up with a local Realtor who specializes in selling foreclosures. Also called REO (or bank-owned real estate) agents, these professionals are very good at contacting investors when good property is about to come on the market.
Contacting local lenders is another good way to get ahold of good REO properties. Most lenders these days have large departments handling their foreclosure inventory. Buying in bulk (a package of properties) at once can garner even better deals.
Buying at auction. While foreclosure auctions can yield good deals, investors do need to exhibit caution here since most auctions do not allow for inspection of the property and must generate a certain amount from the sale in order to satisfy the mortgage debt. It can be better to wait until the bank takes possession of the property (if it fails to sell at auction) to garner a better sales price.
3
Pay with cash. When it comes to investing in real estate these days, cash is king. There are a lot of benefits to buying your investment properties with cash, including an ability to negotiate the best deal and the ability to hold onto your property through any economic climate. Without a mortgage payment, you are much more likely to be able to weather a further economic downturn if necessary.
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Maintain your properties. You'll have to hold onto any investment property you buy right now until the current housing crisis is over. While you may be tempted to do some major renovations to increase your property's value and resell it right away, it may be smarter to simply keep it maintained and hold off for a few years to see where the market goes and whether any real renovations will be needed in order to sell it for a profit later.
As you may know the real estate market is finally starting to heat up.
There is one area that is already getting all the attention of investors.
Beacuse that's where the buyer's are plentiful.
John Alexander has just announced his new "Inverse Option Flip" strategy for this new market.
Check it out, then let me know what you think at:
https://m279.infusionsoft.com/go/iof/sgroup
Roosevelt
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