Don't Let 2009 Pass You By! (BUY!)

Sure, we may not have hit rock bottom yet. But, maybe we're really close? Who knows? No one does, for sure. There are a lot of experts who consider many variables and make their predictions as to when the bottom will arrive. Many believe that we have another 24 months or so before all the sub-prime adjustable rate mortgages out there adjust and do their final, fatal damage to homeowners around the country.

Many will not be able to afford their mortgage payment once the low, introductory rate evaporates and they are hit with a much higher rate and, as a result, a much, much higher monthly payment than they ever dreamed they would be hit with. As a consequence, many will simply walk away and let their house go into foreclosure. But since Michigan has a six-month redemption period in addition to the time leading up to the actual default, judgment, etc., the house may not actually make it to market as an REO (real estate owned by the bank) for about a year or more after the rate adjusts.

All this means is that there will be a good supply of empty, bank-owned properties waiting to be taken advantage of by the prepared investor for quite some time to come. (Me and you!) Even when the market begins to recover, the values are not likely to just jump through the roof. I would not expect values to just rise as fast as they fell. That's the nature of this popped housing bubble. It inflated over a number of years, but when it "popped!" housing values dropped precipitously. Granted, these values may have dropped artificially low due to the number of foreclosures being sold off at 40-60% of market value. When appraisers started looking at property values for the retail home buyer, they often didn't filter out the "sold" price of the vacant foreclosed property next door.

We are witnessing a huge correction in housing values and we may have seen the market fall a bit lower than the true market value of properties should be. You can expect a recovery beginning in about 36 months and by 2014 you should see reasonable property values once again.

The good news for real estate investors is that you can pick up a ton of houses (REOs, owner occupied, estate sales, etc.) in great condition or that need a lot of fixing up (rehab) - whatever fits your investing style, it's out there!

Don't let 2009 pass you by -- BUY today! If you are new to real estate investing, now is the time to get on the fast track. Read all the books and blogs you can get your hands on and educate yourself. Sell off a bunch of stocks or mutual funds to get the cash you need for a down payment. Whatever it takes, get into real estate now while it's so easy!

If you wait, don't worry. Real estate will always be here. That will never change. What changes are the market conditions and the tactics and strategies you will need to make the best investment. But it boils down to basically two simple strategies: Buy, fix and flip quickly for a profit (best when market is stable or rising), or you can buy, fix and hold (rent) for the long term and build equity.

I like BOTH strategies and I'll continue to do both when it makes sense (cents!) to do one over the other.

Thanks for reading! If you have any real estate related questions, don't hesitate to post a comment. I will be happy to research your question and get back to you with an answer.