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Is it time to get in the Game?

By
Real Estate Agent with Prudential Ambassador Real Estate

  

  

Is it time to get in the Game?

  

By Fred Tichauer, Associate Broker, Keller Williams Greater Omaha and investor with over 35 Years Experience.

This subject can be debated but I think for those that have been sitting on the sidelines and  wondering when the bottom is going to hit , why speculate further, this is a tremendous time for the investment journey to begin.

Lately, there is not a day that goes by that you don't read or see the negative news about Real Estate or the stock market or the uncertainty of our economy. What does it mean for someone that is currently an investor or is  thinking about investing? To me it means deals, deals, deals, buy, buy, and buy.

On any given day in the Multiple Listing Service alone, one can find hundreds of properties that make great rental/flipping prospects so why wait to get in the game. There are other sources that one can use to identify properties, but for me the MLS is the place of choice.

This is the best of times for those that are current investors or want to become investors. Sellers are having more difficulty selling their property, foreclosures are on the rise, winter is coming..... so as a buyer/investor this makes an ideal time to add to your portfolio.

If you are a buyer it's like being in a candy store and if you are a seller it is not as much fun...While it is sad and unfortunate that so many hard working people have lost or are loosing their homes to foreclosure, etc., the opportunity exists for those that have their financial resources in place to find one deal after another in the Omaha /Metro area.

Why and how did we get to this point?  What went wrong?

So many speculators jumped in this game perhaps without as much knowledge as was necessary. It seems as if in the last 5-6 years ago individuals that should not have been able to qualify for a loan did. Lenders made things way too easy for just about anyone to purchase a home/investment property(no doc loans, adjustable rate loans, interest only loans, 125% loans, no money down loans etc.

The above examples are more prevalent in such markets as Nevada, Arizona, California, and Floridaas speculators bought a pre-construction in hopes of selling it before or after completion, or bought a property to rent out etc. Like most of us that own Real Estate, we believed that the value of properties will continue the upward trend as it has for so many years, but unfortunately it was not the case and the bottom dropped.  

Unfortunately, these speculators  quickly realized they could not rent the house, or if they did, the tenant didn't always pay and sometimes they even destroyed the brand new home, therefore the problem. My guess is that a lot of these buyers we're not local investors and relied on someone locally to manage or watch over the property.

Pertaining to our  local area,the majority of foreclosures in the Metro Omaha area are not due to speculation but rather primarily to the owner occupied that lost/ loosing their home  for many of the same reasons (no doc loans, adjustable rate loans, interest only loans, 125% loans, and no money down loans) and very few are  due to investor speculation. Bottom line, who is to blame? Are Buyers, Mortgage Brokers, Realtors, and Appraisers to blame for this?

This is a very unfortunate situation, but now this current market offers tremendous rewards for those that are current investors or are wanting to become an investor .Now is  the time to buy as much as one can handle . Owning desirable rental properties have always met the test of time and will always be in demand.

Earlier, I mentioned the uncertainty of our economy and so many good people have lost so much of their fortune in the last few months in the stock market, 401K etc.In time things will rebound but how long will it take? In my opinion, Real Estate has always been one of the best investments to make , but especially now with our current economy it's a great time to diversify ones assets and perhaps make up for some of these loses .

I can't ever recall anyone ever loosing all of their money in Real Estate but I know a few that have lost most of thei assets in the Stock Market etc. One can also debate which is a better investment the Stock Market or Real Estate. Obviously I am biased.

Another sector that is also taking advantage of this market, are nationally known "Real Estate Gurus" that are offering "Free seminars" I am aware of individuals that have attended these "free" seminars, and  left purchasing videotapes, books, follow up coaching sessions for thousands of dollars. They have been promised that by following their plan/secrets they too can get rich even without having to do a great deal. I have been doing this for a very long time and can't ever recall things coming as easy as they make it to be.

In my opinion, these "students" as they are called that spent $2000, $4000, $20000 and more on the above programs could have utilized the hard earned money more effectively. There are not that many secrets or strategies worth spending that kind of money. A better use is a down payment on a property, fix up costs etc.

Local Realtors know this market much better than an outsider that  bring their "dog and pony show" for a day and then leave town. With some very rare exceptions, most of the resources purchased will end up in a shelf or listed on EBay.Sound familiar? Do you know of anyone that has attended such seminars?

In the Metro area there are very knowledgeable Realtors that are also investors and can provide time tested practical knowledge, can help you analyze a property to determine if it makes a good investment or not  and  can be the resource for years to come.

In all likelihood, you would not give much thought of going to a doctor that was not a specialist or is not considered to be the very best in their profession. There are a lot of wonderful family practitioners but not as many specialists, just as there are a lot of wonderful Realtors that are generalists, but are not as knowledgeable in the investment arena. as a "Wealth Building "option.

In conclusion, with changes in underwriting guidelines it will be much more difficult than in the past for many to qualify for a loan, therefore this market is an ideal time for those that are credit worthy, have a relationship with local bank(s) and or have access to cash to buy undervalued properties .

The demand for desirable rental properties should be strong for the foreseeable future and while cash flow is being generated , all the benefits of owning Real Estate such as tax savings, appreciation, depreciation etc., are also working 24/7. Buying rental properties today will be very profitable for years to come and you will be glad that you got in the game today and not tomorrow.  

Jump on Real Estate investing "game" by interviewing an extremely knowledgeable Team of Realtors that understand the market, are investors, can provide you practical knowledge and are capable of guiding you every step of the way. Call Keller Williams Greater OmahaRealtors, Fred Tichauer, 402-679-3914, email: fntichauer@cox.net,John Van Gelder, 402-871-5596, email: johnvangelder@kw.com, Scott Houck at 402-676-1008 email: Scott@FreeOmahaInfo.com, Bryce Penke at 402-578-9006and Shawn Prouse at 402-305-1504. With us you can count on: Excellence, Trust, Commitment, Honesty, Integrity, Leadership, Expertise, Practical Knowledge, Results and over 60 years experience as investors.

Also checkout: http://omaharealestateinvesting.com for useful information.

Attend the next Real Estate Investing Seminar on November 22, 2008 9-12 noon at the Keller Williams Office  9719 Giles Road, La Vista NE