The news media is all doom and gloom about the current real estate market, and the economy in general. But let me tell you. You can still make money with foreclosed property, especially in today's economic climate. I've had great success with this, and it can work for you too.
One of the first precepts students learn in medical school is primum non nocere: "First, do no harm." Similarly, my first order of business in real estate is: Never lose my investors a single dollar.
It's ugly out there.
Properties aren't moving; sales volume has plummeted. Foreclosures are up 48 percent from a year ago. Prices are down as much as 20 percent to 30 percent in markets ranging from Miami to Los Angeles.
A title company wired just over $97,000 into one of my bank accounts this afternoon. Once I get the insurance and escrow refunds, it will amount to a little more than $100,000.
When you get to know an area intimately, you can spot deals and snap up a property before anyone else.
As real estate prices fall, the income you get per dollar invested rises. This means greater cash flow and the ability to deliver bigger dividends to your investors.
I've advocated buying only cash-flow properties using fixed rate, amortizing loans. But now that you're in this situation, here are a few things to consider:
I've been investing in real estate for 20 years, and I've been able to make millions using many of those strategies to find potential deals. I've also used time-tested techniques borrowed from direct marketing.
The short sale has been around for many years. It's nothing more than the lender/bank agreeing to take less than what is currently owed on the property.
A recent trend in real estate investing is toward smaller homes and apartments in the "new exurbs" - and that's where your real estate money should be invested.
By Marc Charles | Sat, Jul 19, 2008
1 Comment