Posts Tagged ‘management’
The Secret Behind Flipping REOs
Investing in commercial real estate can be easier and more profitable than single family homes. While the income potential may more than justify higher prices, coming up with the funding to support commercial real estate purchases may be both intimidating and even prohibitive for many real estate investors.
If this scenario rings true for you, then you might consider something a little more basic to help build some investing momentum and to also put some cash in your pocket as you’re doing so. One of the best ways to make some big bucks in the current real estate market is by flipping REO properties.
Just so we’re all on the same page, REO properties are those that have been foreclosed on, and are now back in the hands of the bank. There is no homeowner to negotiate with, or to have to explain the foreclosure process. REOs have clear title, are often discounted, and investing in them is very much a repeatable process.
The acquisition process for REOs will require that you have a good local realtor on you team, which isn’t a bad thing to begin with anyway. The reason for this is that the REO business is very much a numbers game, even more so than for other types of real estate investments. The advantage you have is that there is a high volume of available properties out there, so you can look for those great bargains and make offers until something sticks.
Once you are able to find quality REO deals, the next step is to turn them into profit, cash flow, or both. For many investors who are looking to bolster their cash supply for larger and more long-term purchases like commercial properties, the idea of flipping REOs can be very attractive, and quite lucrative. End buyers for these kinds of properties are becoming more abundant, and the quality of discounting that the lender owners are offering with many REOs can be quite impressive.
In subsequent articles on the subject of REO properties, I will be discussing how to use proceeds from them to help build towards larger purchases like commercial real estate. I will also tell you how attracting private lenders to smaller REO purchases now can set the table for having ready sources of private capital down the road with your commercial investments. With that said, stay tuned, as I have a lot more to share with you.
Home Buyers Still Holding Back
I recently saw a report on MSNBC that more than half of potential homebuyers say they’re still not ready to enter the housing market, according to a poll conducted by Realtor.com. Their biggest concern was that they would lose their job and be unable to support the new home. Additionally, potential home buyers were troubled over falling home prices and anxious over whether or not they could sell their current home.
In my day to day business I am seeing that while more restrictive lending is stopping some would be purchasers from moving forward, even those who are highly qualified to purchase a new home are not rushing to snap up the deals and feel that values will continue to drop. Furthermore, as many of the best deals in the marketplace are foreclosed properties, new homebuyers are constantly reminded that purchasing a home is a big risk financially in these troubling times. Additionally, many perceive purchasing a foreclosed property as a lot more complex than other transactions.
The poll by Realtor.com also found that Americans generally are skeptical about Obama’s plan to alleviate the foreclosure crisis by giving the lending industry $50 billion in incentives to lower borrowers’ monthly payments. Less than one third of the surveyed individuals thought it would do the trick.
What is the end result of all this? I am finding that, at least for now, many purchasers as well as sellers are choosing home rental over home buying.
Renting gives those relocating an option to test out the market and find the right fit, and allows those needing to upgrade a chance to do so much sooner than they might be able to in these current conditions.Those who might otherwise sell their home are also finding renting an attractive option, as it allows their property to recover its value as the real estate market improves.In my opinion, until Americans become convinced that the market is changing for the better, renting will become the preferred option for many who would otherwise have purchased a home.
DenverRentAHome.com can help those in the Denver, Colorado and surrounding areas with over 75 years of combined expertise in the residential rental and property management fields. Homeowners can now post their properties online for FREE for two weeks, followed by a low monthly fee. And prospective tenants can now get pre-qualified online! Visit www.DenverRentaHome.com for more information or call 303.681.6767.