With all the negative media and naysayers you would think anyone involved in real estate is finding a new profession. However, this is simply not true for investors. The real estate market has potential in any market. The key is finding a niche and using the current market situations to your advantage. Did anyone notice that Warren Buffet invested over 5 BILLION dollars in one week in what many consider the US's worst economic situation ever. Rather than follow the crowd I choose to examine the actions of the world's greatest economist's/business minds. In an interview on MSNBC, he basically said "buy when everyone else is selling and sell when everyone else is buying." However, we must use discretion and wisdom in our businesses during these difficult time. In a recent webinar with Paul Esajin (Fortune Builders) and Pat Precourt (over 500 successful short sales completed) they went over a few major strageties that I felt would be good to share.
1) Know your exit strategy and only do deals which are going to fit into this strategy. - For investors and rehabbers the main problem right now isn't in finding deals, but selling them to a retail client. So how do we get around this? We must stick to the properties which are going to be easy to sell and easy to get buyers financed. The best tool to use right now is FHA first time homebuyer loans. These are federally backed government loans designed to get first time home buyers into properties. These loans are not credit score driven and you can usually get them with as little as 3% down. Target these type of homeowners on your future buyer marketing campaigns. Get in contact with a mortgage broker who has access to databases were you can target these buyers. Makes sense right?
2) Keep it simple - In this market a main key is not to do any deals which may have problems selling. Simply put, stick to quality markets with similar homes. 2-4br's with 1-2 baths, good, reasonably priced neighborhoods, with similar colonials, ranches, and capes. Stay away from doing alot of rehab's on multi family's and homes that don't fit into this criteria because they are going to be difficult to finance and difficult to sell.
3) Buy investment propeties/ long term holds - With the recent explosion of foreclosures the future real estate market is going to be full of qaulity renters who were advantage of in the recent mortgage market. These will be people who couldn't swing the mortgage payment but have no problem with a rent payment. If you find the right opportunity with a decent financing option, I would suggest buying a couple rental properties. This way, as an investor, you can actually use the distressed homeowner who's house your buying and put him into a property you already have as an investment. Isn't that something you would want to mention when you closing a deal, I think so.
Just a little information that I wanted to share with you. Tell me what you think and if you have anything to add.
Quick Note - I am looking to get involved in a couple different rental markets. Two that I would like to target are Memphis, TN and Columbia, SC. If you have any type of experience in these market please contact me. I went to college in Columbia and have a decent knowledge of the area. Thank you
God Bless and make money,
Dusan Dujovic, National Home Solution, CT
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