In most areas, the real estate market has recovered and the home sales are rising...both in terms of numbers of hojes sold and the proce of the homes. The prices are going up in most areas, and the number of properties in foreclosure is going down.
Accordingly, many people ask me whether this is a good time to invest in foreclosure properties.
Many people have asked me that same question in the past few years, and it was understandable since the market was in a down cycle. They were unaware of the opportunities that only insiders knew so they were concerned about their ability to sell the property and make money in such a down market.
Death, divorce, job loss, illness, buying a new house, etc. are all still present in a hot real estate market. There are still houses going to foreclosure.
Sure, the percentage of motivated sellers is lower than a few years ago, but there are still plenty of them for you to make your own fortune.
On the upside, the risk of not being able to sell the property is a lot lower. This is an important distinction because there are buyers. Also, depsite negative information to the contrary, there are lenders that can accommodate even a reasonabley qualified buyer. There are also a plethora of cash buyers.
It is reasonable to assert that in a down real estate market, there are more motivated sellers so it’s easier to find them. However, the properties move slower, and it’s harder to get a top price when you sell. Accordingly, you need to work harder to get a better (lower) purchase price.
In a hot market, it takes a little more marketing to find the motivated sellers, but it’s a lot easier to sell the properties – and the holding costs are a lot lower. This allows you to pay a little more for the property and still come out with substantial profit.
Therefore, it is reasonable to conclude that there is still opportunity.
There are cycles to real estate markets. When a cycle appears to move against you, it is not the end of the world. you may just have to change one aspect of your business model in order to succeed.
Remember, that creative real estate investing works in up and down markets, but the strategies used need to change.
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