Wow, are we lucky. Believe me, this market, this city, this town is extremely lucky.
Columbia, SC, as I have stated before, has never been a Boom market. We have not been hurt by the way of a massive dump of foreclosed properties, your property values are still rising. The one problem that we do have is the massive amount of inventory on the market. We are no where like Florida, California, or many of the other places which are being hurt...but we do have a lot of inventory on the market.
This creates a GREAT opportunity for many buyers, which we call investors. If you are an investor, you can skip this paragraph. Investors, which you have seen on programs like "Flip This House", "The Real Estate Pros", etc are people who purchase a house to make money by selling it or 'flipping' it. There are a couple of people in Columbia that do this, but not that many.
Housing investments can be very lucrative, but at the same time they can kill you financially. Below I am going to put some investment tips and ideas on whether you can invest in homes.
Obviously, when it comes to anything you are purchasing, "cash is king". Many investors use cash, loans, HELOC's, or Unsecured lines of credit to purchase homes. Many of the homes they purchase are foreclosures or short sales.
Most everybody knows what a foreclosure is. Many people in Columbia, Lexington, Chapin, and Kershaw are loosing their houses to foreclosure. While I believe this is very very sad, it presents and opportunity for investors to make money. Here is a past post about foreclosure and investments I have written.
Distressed properties tend to be less expensive than their competition because the banks want them gone...they are not in the property ownership business, but are in the business to lend money...therefore they want to get rid of these houses to get the money back to lend more.
What to look at if you are a first time investor (very simply put):
First, do you have access to the money to make the purchase? If yes, go to step two.
Second, do you have access to the money to Rehabilitate the property. Most foreclosures are sold 'as is' and will need some work. This may be minor, this may be major.
Third, can you afford to sit on the house? This is usually termed "carrying costs". This can include the mortgage payment, taxes, insurance,HOA fees, and anything else that you have to pay for while the house sits.
Fourth, is there enough money to turn a property...does the property cash flow? If not, why would you do it unless you are planning to live in it? Does it cash flow after Realtor fees, rehab fees, carrying costs?
The above thoughts are very very basic and rudimentary. There are many more things to ask yourself, talk with your Agent about, and consult your financialadvisers about. One must look at more than just the money....especially time. How long, if you are flipping, will the house sit on the market? How long, if you are renting, will the house take to be rented? How long will it take to rehab the house?
When making an offer, there are also many other items to ponder such as: How long has the house been on the market. This goes with all houses. For example, atWal Mart...they have a 'widget' on the shelf for 3 months at regular price. Soon they will put it on sale and take less. After 6 months, this 'widget' will be cheaper...and so on and so on until it is sold. Many times below the cost thatWal Mart pays for the item.
In Columbia, SC there are deals to be made! Currently (as of today) there are 21 houses available from HUD and the VA. This is not many at all and includes the Greater Columbia, SC Area (Columbia,Chapin, Lexington, West Columbia, and Irmo). Our community is very lucky.
If you have any questions, feel free to email me. Since I began Real Estate, 43% of my transactions have dealt with REO and investment properties.
Originally posted at http://iblogcolumbia.com/2008/04/24/investing-in-homes-in-columbia-sc/
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