Yesterday I had the pleasure to meet with an earnest young couple who, upon reading a book on how to accumulate wealth in real estate, wanted to know what properties would be available to "lock and reassign". They said that phrase quite a few times and were seriously wondering what they could tie up and double escrow. It fell to me to give them the bad news.
In a declining market, there are bargains, but don't look for a quick flip. Think about it. We have too much inventory, declining numbers of sales and trouble for many getting financing. This is not the market to get into looking for a no money down deal! If foreclosed properties and short sales are selling, what would make anyone want to buy a deal from someone else? The deals are there. There are bargains everywhere for the picking. But short term investing in real estate is best done in an appreciating market...not a declining market.
This couple did not own their own home yet. The single best real estate investment still is one's own home...what with the tax benefits, not to mention the emotional benefits. My goal was to get them on a path to their first home first. And teach them the realities of real estate investments for the future.
Right now cash is king...there are plenty of bargains available for investors whether they are looking to rehab or walk in. REO properties are selling for pennies on the dollar (sales prices often hover around 50% of loan balance at time of foreclosre) and below market for surrounding normal sales.
Bottom line...real estate is a great long term investment particularly now but it's imperative that the investor has eyes wide open and a game plan before jumping in.
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