Thanks Dan. I should add that I love dying markets! Those are the best of times for investors. Investors should remember that our best markets are the opposite of the best markets for mainstream real estate. The “hot” market of the past few years was good for realtors but bad for investors who wound up paying ultra high prices for investments. When you are living in the house the cost is only a relative issue. When you are investing to make money with a house, cost is everything. I say yippee for slowing sales and falling prices. Dying markets create real opportunity for smart investors.
I live in So.Cal and recently’s when I’ve had a big interest in real estate. But unfortunately, the demand on homes isn’t as high. But as I drive around looking for junkers and possible handyman projects, I still see homes that are in need of major repair. Move in anyway if the money’s right? any other options, rent/ lease? input’s highly appreciated.
Lack of buyer demand on the front end should be used to your advantage to negotiate a better deal. Just be sure your exit strategy will make sense. i.e. you need to get a good enough deal to be able to move it in a slower market. Buy right, sell at a good discounted price.
Re: rehabbing on a dying market, smart?? - Posted by Dan Aiuto
Posted by Dan Aiuto on March 09, 2006 at 20:48:03:
Donna’s right, if you can acquire these junkers at significant discounts and build in good margins you have a good shot.
One of the keys is to completely turn these ugly ducks around by smartly improving them to exceptional homes worth your buyers time and investment.
You’ll have to sift through and put out a fair amount of lower than expected offers but that is the way to building up a margin that allows you to profit from this type of real estate deal. Don’t settle for less than 30% off!