This has been a rocky year for the real estate market, it had it up and downs. Even though the year is not over the market will continue to be unstable. By keeping yourself busy by setting goals you will end the year successfully. The questions you should be asking yourself are “What are you going to accomplish this year?” “Have you set your real estate goals this year or are you halfway to achieving them?”
The Two Different Types of Brilliant Real Estate Investors
Right now, I believe there are 2 types of investors; those who are buying properties as fast as they can and those that are on the sidelines. The investors that are buying are seeing many of the same things I see every day, all of the positives in the market, showings are up (when it isn’t 90+ degrees), closings are happening, interest rates are still low, rental vacancies at an all-time low, the deals are plentiful, need I say more? For those on the sidelines, what are you waiting for?
I often hear investors comparing now to the late 1980s when real estate prices were depressed and investors took advantage, I also hear that now is an even better time to buy real estate. I must admit in the late 1980s, I was hardly riding a bike without training wheels and G.I. Joe cartoons were my primary interest. But now I am seeing the signs of an opportunity that we will not see again for some time.
Many of our clients me included are taking this rare opportunity to acquire rental properties; we have a rare opportunity in the next 3 years or so to buy properties that will produce great cash flow from day one. The rental vacancy rate in the Los Angeles area is 2.2% from the last report I heard, a historical low. These properties do not take a lot of fix-up to make them rent-ready and I am seeing cash flows of up to $600 a month after the refinance. Using hard money to acquire and fix the property for little or no money out of pocket and typically no money to the refinance. If this strategy interests you, let me show you how the logistics look.
House Flipping is Not the Same As It Once Was in Real Estate
We are still seeing clients make money fixing and flipping properties even in this market. In the fix-and-flip arena, it is more important than ever to have the best product at the best price. There are a lot of houses on the market; you need to set yours apart, whether it is staging, finish or price. It is still a buyer’s market on the retail side; help them buy your house. We are seeing a few deals in the higher price points, remember the spreads seem wide but monthly costs and price reductions can shrink that spread, know your exit strategy including the marketing plan in this price point.
Check Prices and Inflation Rates
Prices are down, some say we have hit bottom, and some believe they could continue to fall. Important to understand your time horizon regardless of your purpose, investment, or owner-occupied. The low prices help both of the above strategies as well as if you or someone you know is buying a home for the first time, the opportunities for everyone to buy a house “right” are staring us in the face. So where are all of the deals? We are seeing deals right off of the MLS, wholesalers, private sellers, short sales, and even some HUD properties coming around after all of the changes.
Research the New Interest Rates
I hear on the radio every morning that rates are going up, hurry and refinance or buy now. Rates on the rise a ¼ or ½ point seem like a lot, but they are crawling up from historic lows. The owner-occupied, the as good borrower should still see a rate under 5% and non-owner OCC, in the mid 5’s. In the time frame, I mentioned previously when I was learning to lose the training wheels it was not uncommon for rates to be above 10%.
Many Investors All Over The United States Are Betting on the Rise of the Real Estate Market
I recently viewed a video from a site most of you have probably heard of, TBWSdaily(dot)com. The video focused on John Paulson a hedge fund Billionaire who made $4 billion dollars betting on the subprime meltdown of 2007. Paulson in 2010 made $5 billion betting on the mortgage recovery, not to mention the $1.9 trillion his hedge fund gained. All signs from this Wall Street billionaire, not Gordon Gekko, say it is time to buy.
The Real Estate Market Will Be Investor Driven for Many Years to Come
The real estate market will be investor-driven for the next 3-5 years; there are a lot of opportunities for everyone to be profitable in 2011 and beyond. We have money available to fund your deals and always appreciate the opportunity to look at them. Be sure to make it to our next happy hour, always free and full of value.