Are you buying a hope in San Diego? Well, 2008 has been a tough year for real estate market. The market has shown downward trend with foreclosures becoming very popular. The homes are being sold at throw away prices. It is completely a buyer’s market.
Is there still a chance to benefit from such a market? The answer is “yes”. Here is how…
First of all an investor needs to understand that real estate market in 2008 is different from market in previous years. In this market, the investor needs should go for rehabs to cut down on debts and build cash reserves. The aim should be to buy rentals. How to pay rentals? The investors could use flips to pay off the rentals. However, is flipping recommended? Sometimes not. This is due to the fact that it involves a lot of hassles.
What should first time investors do?
Investors who are looking for investing for the first time in real estate should look at buying two to three properties and give them on rent. They should later re-sell when the market revives. To ensure the seller gains trust, the investor should get a large part of his / her loan pre-approved / qualified by a commercial bank. The sources of funds [private equity or money lender or any other] should be well identified. Once the investor has bought the property, he / she should look for a tenant. While renting home, the investor should draw out a well thought rent agreement which covers the expenditure / maintenance cost as well. If it looks profitable, the investor could look at re-financing the mortgage after certain number of months, considering the interest rate and terms of loan. When an investor sees the market is at a rebound. he / she should go ahead and re-sell the house. Either keep the profits as reserves or invest in buying in another property.
What should first time investors do in case the investor does not have credit or cash?
The investors should network around and talk to maximum number of investors. Identify an attorney who understands the market and the investors. Post this an investor should identify a deal and add the escape clause. The investor should then go ahead and sell the deal to an interested investor. This is how he can build cash and reap profits, thus building credit. He is all set now to buy a home.
While 2008 is a tough year for the real estate investors, it is not as much tough for those who are confident that they are in the market to make profits.
Log on to the internet and study about the real estate market and find some more tips on how to make best of the current market situation.
Remember, the year 2008 is very different from any of the previous year. The key is to have both cash and credit and if not, investors should take steps to build cash, equity, and credit.
Tell Others What You're Reading!
Connect with me!
