Real Estate In The Twin Cities Minnesota-First Time Buyers And First Time Investors

Why you should consider buying investment properties or your first house in MN Today

Vulture investing in foreclosures or short sales can turn out to be tremendously profitable IF you have a long enough holding period of time.  Based on what I see in the market today, you should plan on at least a 4 year holding period.  I feel that the market should have turned around within the next four years. Real estate investing has always been attractive to those looking to build wealth.  In the past few year,with all the stories of people making tremendous amounts of money in real estate it's no wonder why so many are looking at real estate as an investment vehicle. In general, real estate may offer more security than the stock market.  In addition, real estate provides great potential leveraged returns and tax benefits.  Everybody can buy and sell stocks from their phone or computer these days. But real estate requires a time commitment and mastery of a learning curve to be successful.

Lack of capital can be one of the obstacles that many are faced with. Lack of money to acquire a piece of property prevents most people from buying.  Although in reality this is usually not the biggest problem. Credit or job status have typically been bigger limiting factors.  You might say "Hey, what do you mean that "no money", isn't the biggest obstacle. I would love to invest in real estate, but I just can't afford to!" The point is that hardly anyone who buys a piece of real estate has enough money in their account to pay for it with cash. That's where your banker comes in. Do you know anyone that owns their own home? I mean truly own it? Probably not unless they are retired. You know a lot of people that have a house to their name, but wait until they get behind on their monthly mortgage payments and you will soon find out who really owns their house. That's right, the bank. So if these people can use the bank's money to buy a house, why can't you? This is the principal of leverage.

Understanding and accepting that "money" is not the limiting factor will allow you to move forward. For example, just take a look at how many people are still renting a property instead of buying one. Now of course the relation between rent and housing prices varies from country to country and even from area to area. But wherever you go you will still find people renting, because in their mind "they don't have enough money to buy a house." In reality it would be much cheaper for them to buy! If only they would shift their paradigm. We have many programs that provide for 100% financing.  Zero down in not just limited to veterans with VA loans.  

Renting can be the right decision, but it might not be.  When you rent, you are getting the pleasure of living with less responsibility, but you're not building any long term equity. Every dollar you spend on rent is a dollar you will never see again. Whereas if you own your own home, instead of paying rent you would be paying for your mortgage and getting appreciation.  This assumes a normal real estate market.  In the Twin Cities, Minnesota we are projected to grow in population by over the next 15 years.  The influx in population will lead to greater demand and appreciation.

So if you've ever thought about getting started in real estate-either as an investor or first time home buyer-JUST DO IT. Take action now. Owning real estate is a great first step towards building your wealth.  In the renting Vs owning analysis,in many cases, it just makes more sense financially to own your home. When real estate prices go up, so does the value of your property. Whereas the money you owe the bank, your mortgage, remains the same. In other words this helps you build your net worth. Compare this to people that are paying rent... Their net worth does nothing. However their landlord's net worth is doing very nicely in this scenario and he or she will probably love you for it. So if you get a warm fuzzy feeling about making somebody else rich at your own expense... Keep renting. If you would rather build your own equity... Buy your own house!

Think about people you know.  Many who have been home owners have accumulated more money through appreciation of their property than by working a full time job for many years. As you may or may not know, real estate prices do not always go up, and certainly not in a straight line. The current market we are in has led some to analysis paralysis. The downtrending market has been a nightmare for many people. If for some reason you would have to sell your home in a down market, it can be a costly adventure. You wouldn't be the first to end up with a house worth considerably less than the existing mortgage balance. This is when people approach their bank with a short sale or foreclosure.  The new mortgage debt forgiveness act was specifically developed for this reason. Historically, real estate prices  rise, but in any cycle there are down periods. This why we say you should consider buying now.  We are at the lower end of the market cycle. Patientience will be enable you to sit through these times and profit from the long term up-trend of rising values when they return.