Invest now for the future
With all the doom and gloom in the economy and particularly the real estate market people are running for the hills and avoiding real estate at all cost. I on the other hand am running straight for it. I am not going to argue that home prices aren’t down or that there is nothing wrong with the market, however there has never been a better time to . With the amount of foreclosures and bankruptcies increasing everyday there are more houses on the market than there are buyers. According to Realtytrac.com one out of every 355 homes is in foreclosure. Mortgages for 1 million dollars or more are defaulting at twice the rate of normal houses. These numbers are not taking into account that in January of 2010 there is a whole other batch of adjustable rate mortgages (ARMs) that are scheduled to reset. Sound like a good time to ? It does if you have cash. Since the banks are already hurting from all of their previous bad debts they are tightening the reins and are being very selective with whom they lend to. That is why if you have the money to invest in real estate the market is yours for the taking.
There are also more exit strategies than ever to use once you acquire the property. Just as it is a good time for cash buyers, retail buyers also know it is time to . This leads to the first possible exit strategy, fix and resell. You can easily find houses for pennies on the dollar put in a few thousand in repairs and resell the house on the retail market for a substantial profit. Believe it or not there are a number of people out there with the money and credit to qualify for a mortgage. The vast majority however may have some money to put down but lack the credit to finance a house. That is where the next two exit strategies come into play. Since you are paying cash for the house and there is no outstanding mortgage you do not have to worry about your rates going up, so you could rent the house without having to worry about being foreclosed on yourself. If you don’t want to be landlord I don’t blame you. One way to avoid that trap would be to hire a property management company, they handle all of the repairs as well as finding and if need be evicting tenants. The other option offers more security through owner financing. The way this works is you become the bank and rent to own the house. This could also be done with a property management company, the difference being that the tenant is leasing to own the property so they have more incentive to care for the house because they will own it one day. These are only a few of the possible scenarios that one could use to invest in a house. None of these options will work without the right deal…
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