Today’s Unique Market Opportunity 4/1/2013

In the real estate market, there is incredible opportunity... you just have to know where to look.

There are two ways to make money in real estate investing: cash flow and appreciation. Cash flow should be your primary consideration when looking for properties to rent. The beauty of cash flow is that it provides income every month. It ensures that, no matter what is happening in the market, there will always be properties that make sense for investors. All you have to do is make sure that the math makes sense.

Although cash flow is the most important element to consider when investing in real estate, it doesn’t mean you should ignore appreciation. Appreciation occurs when the value of your property increases after you buy it.

The great thing about cash flow is that it exists in any market. Good markets and bad, there are always properties in which the math works out so that cash flow can be achieved. What makes today’s opportunity so unique is that so many of the properties can be bought at a discount.

The reason these properties are available at bargain prices is because there is still a backlog of distressed inventory, homes in danger of foreclosure, that sell for a discount.

For homes that have yet to be foreclosed on, a short sale is the most common method of investor purchases. In a short sale, the bank agrees to accept an offer that is less than is owed on the mortgage. The result is that these properties can be purchased at a bargain. In fact, in a recent RealtyTrac study, the top 15 markets in the U.S. for short sales offered an average of $106,000 under market price for the property. A qualified real estate agent can help you find these properties.

When a home has already been foreclosed on, it becomes “Real Estate Owned” by the bank, or REO. The same RealtyTrac report stated that the top 15 REO markets offered close to 30% savings under market value when purchasing the property from the bank.

This opportunity is real, and it’s incredible. Savvy investors are taking advantage of this market because the recognize it is a once in a generation opportunity.


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