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5 Ways To Invest In A Declining Real Estate Market
This is the beginning of a lucrative market for
investors. The US real estate market has proven over the years to be
a sound investment, even in both booming markets and surprisingly,
in depreciating markets. It has been a steady performer over the
long haul, and now with a significant dip in property values, it's
quite notably the single greatest decrease in values we've seen in
decades. Good profits from investments can be made in real estate.
Both individual investors purchasing in small scale and multi
billion dollar investment firms have the opportunity to make great
profits. The changing real estate market is proving itself with
dropping prices. Investors with foresight should take the
opportunity to cash in on available deals. Here are a few ways
investors are making a profit in this present day market.
1) Use a realtor to help purchase properties at wholesale. Realtors
can be made a part of your wholesale purchasing team. It’s a
numbers game when purchasing houses to rehab and retail for
profit. You will have to make hard money, line of credit or cash
offers until you lock in on a wholesale purchase. For those with
limited money, “hard money” loans are used for leverage and buying
power.
2) You can wholesale properties to investors. You can put
properties under contract and wholesale them to investors or
pre-qualified home buyers for a profit. This is done by collecting
a list of wholesale buyers. When you get a property to wholesale,
you can pick up a phone and call your list of buyers as soon as they
pick up a deal to wholesale.
3) A "short sale" is a popular way for investors to wholesale
properties to their buyers. This is a process of negotiating with
the bank to purchase properties at discount. Sellers often take this
direction to prevent going into foreclosure. Banks do this to avoid
the costs of paying attorney fees and the headache of foreclosure
procedures with the homeowner. Investors can do this one at a time
or in volume. There are many instructors who specialize in short
sales.
4) One of the most overlooked forms of making money and by far less
risky is to be a "finder" of deals. There are different ways to be a
finder; you can find an investor who has access to funding and
connect them with a motivated seller. If a deal is done, you make a
finder’s fee for putting the two together. The fee will range from
$500 to as high as $5,000. Keep in mind, the larger the deal, the
greater the fee! Always get your fee agreement in writing prior to
introducing the buyer to the seller.
5) Currently, the highest compensation is for capitalized investors
purchasing bank owned property (known as REO.) These properties have
already been through the foreclosure process and re-owned by the
lender/bank. Due to the changes in the real estate market and influx
in foreclosures, some lenders need to sell off their large inventory
of properties in the shortest amount of time. As a result, they can
be purchased in bulk at steep discounts.
Large numbers of defaulted loans, record numbers of foreclosures,
increased bank inventory or re-owned bank property all contribute to
the significant changes in the real estate market. Over the last
year, the media has focused on sub-prime lenders, mortgage companies
and credit unions having financial difficulty and many going out of
business. It’s a good time for investors to look for opportunities
with prices taking a down turn.
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Andy Ford is a real estate investor
in Southern California whose experience is marketing, buying,
selling and rehabbing real estate.
www.sterlingholdingsinc.com |