Over the next 2 years there will be great opportunities to invest in real estate for those people positioned to take advantage of this down turn. The time to buy is when everyone is wants to or is "forced" to sell. Here are two great opportunities to learn more about if you're serious about investing in real estate.
Number 1: Short Sales—A Win/Win/Win situation
A short sale involves a complex transaction on a property where the owner is in default on the loan payments and has received a Notice of Default, and where the market value of the property is less than the amount owed. The 'short' refers to obtaining a discount on one or more of the notes on the property. Investors will usually turn the property quickly for a nice profit.
There are many factors to consider in a short sale even to determine whether it's a deal worth pursuing. The investor must understand all title issues, have complete knowledge of all outstanding notes and liens against the property, and have a good sense of what the Brokers Price Opinion is likely to be. Even after finding a good candidate, the investor needs to be knowledgeable in negotiations, in how to put together a complete and professional offer packet for the banks and in how to obtain the best possible BPO. As well, it is always best to have buyers lined up before hand.
We've selected this strategy as one of our top two because there are so many opportunities in today's market. Many homeowners are in serious trouble out there, with some researchers estimating that foreclosure sales may account for up to 10% of the properties in many markets in California. The recent flat and down market combined with too many 100% financing deals with adjustable rate mortgages has created an opportunity for savvy investors. A typical short sale in California can net the investor $25,000-$40,000.
If you don't know EXACTLY what you are doing, you should not be entering this arena. However, if you DO have the knowledge to systematize this strategy, it can be lucrative in today's market, not to mention it's a win/win/win situation: homeowners may be able to prevent foreclosure and can move on with their lives, the bank gets the bad debt off their books, and YOU pocket a nice piece of change!
Number 2: Multi-tenant—The Opportunity Behind the Opportunity
If you know what you're doing, opportunities to cash in on the current market are everywhere. Case in point is the multi-tenant market, or what we see as the opportunity behind the short sales opportunity.
Think about all those people facing foreclosure leaving their homes to become renters…and rents are lagging far behind property values…
So, will there be upward pressure on the rental market over the next few years? We think so. Where would you go with your investments to take advantage of this situation? Perhaps it's time to consider multi-tenant situations. Remember, though, that you are now entering the world of commercial real estate. These are the higher stakes tables. Before you sit down at one of them, you really need to have 'game.' If you'd like more information on how to take advantage of these opportunities contact us.
No comments:
Post a Comment