2009: A Great Time to Invest In Real Estate?
According to RealtyTrac.com, there are currently over 2 million foreclosure properties listed in the United States. While this is not great news for the industry or the US economy in general, it represents a HUGE opportunity for real estate investors who have cash to invest or can qualify for a home loan!
Now is the time for contrarian real estate investors to strike, while prices are low, the number of distressed properties continues to grow and yet home loan funding is still available at historically low interest rates.
How Do I Buy a Foreclosure Property?
Web sites such as Foreclosure.com, Foreclosures.com and RealtyTrac.com all provide comprehensive listings of pre-foreclosure and foreclosure properties, so these days locating a distressed property to purchase is easier than ever!
Couple this with the fact that many real estate investors were caught with their pants down after the boom; many who invested in a home or rental property in 2005 or 2006 have their capital tied up in properties that have lost value.
If you are prepared and were looking ahead during the boom years, wondering “Hmm … When will this bubble burst?” then now is your time to start looking at potential real estate investors.
How Long Until We Reach the Bottom?
I remember in the 80s there was a huge boom in the foreclosure market. Get Rich Quick marketers were all over the market and investors who were willing to risk buying distressed properties using hard money loans and other creative financing snapped up properties at prices never again seen.
History repeats itself, so I would expect in the next year or two we’ll see the Quick Buck Crew peddling their DVDs, audio books, e-Books and training seminars all over again, promising to show you how to make a fortune buying foreclosed properties.
When is it the Right Time to Buy?
The thing is, for the most part they’ll be right. But timing is everything in investing and by that time money supply will likely be even tighter than it is now and home prices will gradually start to recover.
Timing is why I sold a home in California in February, 2005 for $1 million. The market felt close to the top and peaked a few months later. You don’t have to hit the absolute top or bottom of a market to capitalize and rarely, if ever, can time any market that accurately.
Fear is the thing that holds all of us back though; how much lower will it go? Is this going to be a deep recession, with energy prices, a post-election era with a new US President and long-lasting job losses, inflation and continued uncertainty?
Or, are we coming toward the tipping point when a new time of prosperity and continued gains in productivity made possible by disruptive technology and renewed demand for new homes, office buildings and industrial properties?
Looking for Signs of a Recovery
The guess as to when things recover is ultimately for you to decide, but just as people get caught up the irrational exuberance and euphoria when a market is near the top, they go even farther to the other extreme at the bottom. Some people predict doomsday, others say the markets won’t recover for years and things seem dark and disparaging. Who would invest money at a time like that? The smartest investors always do, riding the crest of each wave and taking their time looking for the next set to come in during a down time.
We’ll continue to discuss this topic in the coming months as America elects a new president, holiday sales and year end financial data continues to change the economic landscape. But start getting your ducks in a row if you want to make money in the next real estate boom! Don’t believe the mainstream media; the real estate market may very well create the best long term financial growth strategy over the next decade.