fliprent

I still believe that this is the best time to get into the real estate investing business.  However, the strategy used in this market may be the key to your success.  I’m not so sure that all of the creative strategies taught buy the self proclaimed gurus will work in this current market.  The differences in the strategies can make or break you as an investor.  For example, if you are looking for short term investments in which you control or own the property for less than 4 months, i.e. house flipping, this market should scare you some.  No one knows where the bottom is, including the gurus and even at a 20 percent discount (in today’s market) you could still be over priced in three months.  Wholesaling (house flipping on speed) may be a safer route to take since in most cases, you only control the property for a very short time frame.  The down side is you run the risk of not finding a buyer and potentially loosing deposits or down payments.  Don’t get me wrong I am still a proponent of house flipping, however only as one car in your freight train to wealth.

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As a house flipper a lot of your profit goes into real estate agent fees.  Finding a good real agent is a huge advantage in this business for several reasons.  First you want an agent that is constantly building relationships.  These relationships should be with buyers, sellers, other agents/brokers, investors, etc.  They should be full time real estate agents and willing to work for a lower commission.  Any agent that specializes in working with real estate investors will negotiate their commission.  Many of them are offering 3 percent to investors and I’ve even come across a few that offer the same to any seller, although I doubt that the latter will last after the market rebounds. 

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As we all should know by now real estate is local.  Even in the midst of this bubble/crash or whatever they are calling it these days, there are still hot markets around the country.   Thanks to the military, some area markets are drawing tens of thousands of new residents and in turn real estate investments.  Why thanks the military you ask?  Well if you haven’t heard about the defense base realignments and BRAC, I suggest that you look it up.

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There are many ways to buy and sell real estate.   The main objective for a real estate investor is to make money.  In a down market like the one we are in now, many house flippers are jumping ship.  This opens the gate for the ones that choose to continue and whether the storm.   The question still remains.   How can I make money investing in a down market?  Much of what we see on the house flipping television shows and what we read in house flipping books says that houses should be flipped quickly.  The longer we hold them the more they cost.  While this may be true if you are carrying the note without a tenant, it does not mean that you cannot make just as much if not more by holding the house over a longer period of time.  Many houses are sitting on the market for a year and counting.  This is where the lease purchase exit strategy can pay big dividends. 

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The Question 

This is a question that every real estate investor should be asking someone right now or even two years ago for that matter. Everyone wants to know “when”, but will you be in the best position when it does?  You can turn to your local PBS radio station and hear forecasts about when.  You can read real estate market experts like Steve Bottfeld of Las Vegas. He says sales will increase in 2008 by 25% for new homes and 45% for resale homes.  Steve explains that new home prices will increase by 8% and resale home prices by 10%.  The fact is that no one knows when the market will begin to flatten.  Notice I said flatten which is still better than the recent trend of falling prices.  Read the rest of this entry »

Are you able to sell the houses once they are completed?  I get this question quite a bit lately and a good question it is.  The answer quite honestly is yes, but it can take a while.  Many real estate economists predicted the current real estate market years ago.  Investors should have formulated a plan B from the start, but especially within the last 2 years.  Read the rest of this entry »