I’m a beginner in this whole REI thing. I’ve yet to purchase my first investment property, but plan to do so this year. But I was wondering everyone’s thought about the market in regards to investors? I’ve noticed already in listings how they are reducing prices, offering closing help, money for carpet, etc here in the Maryland area. Does this means the market is getting bad? I know it has slowed down a little, but what does this mean for investors? Will it still be as profitable? Will it be better to hold and rent the property instead of flipping?
Again, I’m new to this, but would like to read your thoughts and advise on this topic. I believe it will help me when I begin my investing. Or am I begginning this new venture too late?
A good investor will know how to adjust to the changes in the market…Remember people will always need a place to live, so you can look at longterm rentals if you want…Just make sure you buy right. You make your money when you buy the property not when you sell it…
Look to buy properties with 20-30% equity in them so you can always sell fast for a discount and at least break even…
If the market slows and people fail to be able to make the mortage payments, then you will start finding great deals on foreclosures. Banks will start letting them go cheap again like they did in the late 90’s before they got into the real estate business hardcore…
Lease Options are great ways to recoupe your downpayments and get PCF. Its a strong tool to use when someone has bad credit and still wants to own a home, so look into learning about Lease Options.
As for more homes being on the market, its a great thing. If you plan on using a realtor, tell them you want to see properties that have been on the market for 60-90days or more, they can search by days on the market so you will hopefully get the desperate motoviated seller…Rememeber if you not embrassed to make the offer, then your offering to much money for the home.
I just looked at a SFH in FLorida I wanted for myself, told the realtor to put offer in at $330K, the seller was asking $410K and place needed no work and being offered for FMV. The realtor told me that was to low and said they feel funny doing it. Well i told the realtor there job is to put in what I am offering, not what you think is right. It gives me a starting point with the seller, I can always go up but not down on the price. i ended up dumping the realtor because of his comment to me. If using a realtor with offers always tell the realtor you want to know why the offer was refused also…
Another thing to remember is that in the retail market, house prices go up because of appreciation, not because of the actions of the owner. That is speculation. We are investors. We buy at a discount because the house is in horrible condition, we then fix that condition and our equity is created because we fixed the house up.
For example we find a house where houses just like it in the same neighborhood have sold for $100k during the last 12 month. It needs about $10k worth of work so nobody wants to buy it. We buy it for $60k put the $10k into it and now we have $70k in it, and sell it for $90k and pocket the $15k after holding costs and fees. It doesn’t matter what the market has done, that deal will work.