For those interested in making money in real estate investing, now could not be a better time. The market is flooded with foreclosures and people in trouble with their lenders. As I've stated before, buying real estate for the purposes of renting or flipping can yield an enormous ROI if you purchase right.
What is purchasing right?
Purchasing right is about finding a "diamond in the rough," a home that needs enough work to discourage most folks who are shopping for a home, yet can be easily renovated for a few thousand dollars. Every foreclosed or short-sale home that I've purchased needed paint (inside and out), carpet, and new light fixtures. Some needed plumbing repairs or countertops. All properties were neglected; after all, if the owner had money to pay the mortgage, he could keep the house in good repair.
Look for the following in a potential investment house:
What is a good location?
Pick an area between new growth and old blight. I tell my realtor to look for a home with the above attributes strategically located between the newly built Starbucks and the first crack house... that is the fringe area where you will get the best deals with the most upside potential!
Finding "Highly Motivated Sellers"
To find a person, bank, or other entity who wants to unload a property, the best device to use is the "bandit sign" that you see by the highway. If these signs didn't work, they would not be there. I also use a lead gathering website, http://www.kellybuyshouses.com/ , which is equally effective.
Happy Hunting!
JM Kelly, The IT Entrepreneur
2 comments:
It might still be not the best time to buy real estate yet. The market might go down 30% or so more for a couple of years. The real estate prices are still way above the long term trend.
I hear what you're saying. However, market timing for real estate is like market timing for stocks. Many folks are so risk averse that they never "get in the game" out of fear of the market going south; as a result, they never invest.
My strategy is to "buy right" versus the comparables in the area, and hold until the market rebounds. Renters can build the equity until I liquidate the properties.
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