Oversaturated Market.
I work in a town that is growing at a phenomenal rate in northern ****Must Reach Senior Investor status before posting URL's***he town has about 7000 residents and growing fast,however, there are all kinds of new developments of new homes. People are moving out of the old homes to the new ones, leaving a glut of older homes on the ****Must Reach Senior Investor status before posting URL's***st are staying on the market 6-8 ****Must Reach Senior Investor status before posting URL's***he old homes are listed at only 10-12000 less than the new ones.
Is this an opportunity for an investor, or a problem waiting to happen as it refers to buying some of the older homes and not being able to sell them in a reasonable time?
That is a good question. I dont exactly have the answer, I am simply posting to tag this topic. I am curious!
-Brandon Richardson-
it sounds to me like a good opportunity for a buy-and-hold investment strategy.
perhaps u could buy one or two units and do some small amount of rehabbing, just enough to get tenants in them.
if companies r staying in the area, that's what i would recommend. however, if companies are also moving out of town, that might indicate a long-term slow-down in the market and u might have difficulty renting out u'r newly-rehabbed properties...
that's what i c anyway.
If people are moving out of the old, and in to the new, as you say, the longer the old houses are on the market, the deeper the discounts can become on the old houses. if they're not selling, there are alot of owners making two payments, and probably not enjoying it. You may be able to make some Sub2 deals, with owner financing, no or low payments with a balloon payment sometime in the future. An important key here is to know your exit strategy going in. Once you control the properties, how will you turn them into cash.
Good Luck,
Jeff