Market stimuli for first time home buyers and those who upgrade will be running out by the end of April. Once these programs end we'll surely see the market fall back into pre-incentive times.
However, investment opportunities do exist for those with the capital to invest and the right plan of action to make their investments work for them. One such approach that appears to be surfacing in several market areas is in the purchase of distressed homes. Investors are buying up homes at very low prices with the intent of making minimal repairs and then placing them on the market as rentals, land contract opportunities, or lease to own.
In order to make this work the plan needs to include a process for making needed repairs and rehabbing these distressed properties to make them livable. They need to be priced at a range that will attract people who may not be in a position to purchase more expensive homes as well as include investor based financing.
Land contract or lease to own options appear to be the method preferred by some of the larger investors who also provide financing. In affect, the investor becomes a land lord over long periods of time with the end goal of having the tenant become a home owner at the end of the contract.
Some of the pitfalls in this approach certainly would be in the area of some clients defaulting and the investor faced with terminating the contract and evicting the tenant. In turn, this means adding additional funds to the investment in order to make necessary repairs and finding new clients to enter into a purchase agreement via land contract or lease option.