ABC News And The Down Turn In House Sales
So they had a big story about how people are not able to sell their homes and are cutting the price all the time. I know that the Gov said we are now at levels equal to those of 1993. Lots of homes on the market. Is this good news? What I mean is this a good time to buy and hold. With people cutting prices $40,000 or more is this the time to jump. My local news was talking about how rents are on the way up. So how do you plan to make money during this time. I think quick sales are out. I think that other ideas like sub-to and Short Sales are the way to get these house. Would like to hear what you think.
J
I saw it too. Now is the time for buying and holding my friends. Also lower your offers as well.
Can you really do this "Nothing Down" stuff I keep hearing about?
Joel your a wise man. I think now is the time to buy up blocks. Just got home from the in-laws and on their block there is 6 house for sale and they had a realtor visit them today because they are thinking about sell (long story) anyway looked at the stuff he left and and for the 3 that have sold in the last month shortest time on the market was 6 months. I told them now was not the time to sell but hell what do I know I am just their son-in-law who has been doing this investing thing for many years and have given them great returns on their money. Also we are talking nice homes in a very good area some sitting on the lake.
And yes you can do no money down and some of these people will even throw in a car and closing cost....
What I have noticed is that you are right all real estate is local but there are signs and trends. I hate to say look at the tech bubble but I just did. People are looking at their houses as the new ATM and we get to see the mess. This is setting up to be a time when deals are there and I like you love to see these stories because it keeps people out of the market. Happy investing.
J
Here in Northern Va the market is really overheated. I predict that the decline will be long and painfull for those who bought in late and high. All one has to do is look back at the last downturn at the end of 1990. How long did that last? Try 3-4 years before values started to appreciate.
Spoke with a seasoned realtor here last week and there is currently excess of 8 months of inventoriy in the area. Which means if there are no new homes listed and the pace of selling does not decline it would take 8 months to completely move all the inventory. This amount now exceeds the level in 1993.
Good news for investors / buyers though. But buy now?? No way............................unless the selling price was 60% of the current comps.
hey - you just need to run the numbers. If they can cashflow for current market rents you will win if you hold. If you buy in hope of a quick flip and quick cash - forget about it.
True but the problem is what way you buy. Like I said before I think there are deals. Lots of people have low rates so maybe sub-to will still work. What else? What about people with high rates do you use Short Sales? Always looking for the best way to help and make money.
Self fulfilling prophecy! Negative news about the softening housing market makes the market soften even more. More and more articles are being published that proclaim doom and gloom for the housing market. Some even predict a 40% decline in market value across the nation (pretty speculative and broad). This kind of news increases consumer fears. Buyers are more reluctant to buy thinking that prices might continue to fall. Hence, you get a self fulfilling prophecy. Based on this theory, I think it will get a lot worse before it gets better.
is a good time to buy, but the middle of winter is even better because the market is generally much slower then.
Is now the time to buy? Here in MI (one of the top 3 foreclosure states), the month of August (known as the "August slump"
Do you all think the market will be worse next year?
The market like any market reacts to fear. The fear of the unknown, the fear of the known, the fear of buying to soon or buying to late. The adjustable rates that some owners have will be a problem when they reset. Most used them to get into homes they could not afford. Prices drop which makes the idea of a new refi less likely. As the payments go up more and more people will lose their homes thus driving down prices which makes it a buyers market. Look to the past we repeat it. What happen in the 80s? What happen in the 90s? What are the signs of a turn around or a crash? Rates are a factor, jobs, political climate, think about the changes that could happen with new taxes or capital gain changes, laws. It takes a lot for us to see into the future. I am thinking the buy hold and cashflow is the exit stratagy for me however how I buy may change. What about you?
Hi all,
Im a novice investor/bird dog in the Atlanta and Macon areas.
The current market situations is what has gotten me so interested in investing, because there are a lot of scared people out there running from there houses. Practically giving them away or just saying forget about them and letting them go in foreclosures because theyre ignorant to the fact that troubles dont last always. These are just trials and tribulations to test our wisdom. Everyone/thing has to struggle at some point. The market will climb back up to another peak, eventually, just like before. But until then I think we should take advantage of these market values and catch these deals for the low while we have the opportunity. If u buy for low, u can sell for low, and shouldnt have any problem getting the property off. Stop trying to squeeze every penny u can out of the properties.
Everyone has to have a place to stay, and theres always atleast someone looking!
Gee, monkfish...maybe the guy used to be a weather man.
: )
Joe
Just what I needed to hear. I have been thinking in this direction for the last few months. Most of the deals I have been looking at are less than 50k, rehabbing and then selling for 90 to 100k. Lots of labor and I end up making 20 to 25% but that does equate to alot of money. Now if I could make 20% on a 200k house, I would be happy. In the end, you take dollars to the bank, not percentages.
thanks for the affirmation
What is the percentage of return to the investor on the borrowed funds?
Frankly speaking I think the average investor will feel more comfortable lending you $50K than lending you $500K.
If you are a beginner without experience I would say not to jump into $500K deals. I do not think deals are just about the dollar figure. You have to calculate the risks and what you stand to lose as well.
It seems like everyone is is such a hurry to get rich that they forgot that you can also get rich doing small deals. 10 deals for the year netting you $17K each gives you as much as one deal netting you $170K at once and it is often easier to move the $60K property than it is to move the $600K property.
If you have the experience for the $500K deals - go fo it. But if not, then be cautious. There is nothing wrong with a comfort zone. And the carrying costs on the smaller deal has to be more manageable than those on the big one.
"Plan your work and work your plan"
oh and to answer A1Realty, I structure my deals with my cash invesotors a few different ways depending on how they invest. If the put up the cash for the buy and the rehab then it is a 50/50 profit split. If they put up the money for the house and I put up for the rehab then it is 60/40 and if it the other way around then 70/20 profiit split.