If you have a June 2011 issue of Time magazine, you will see an article regarding double dip prices in the housing market. Double dip means that home prices have fallen, then showed a recovery for a brief period, and now are falling again. Whys is that? For the regular Joe, this is a scary scenario. For opportunistic investors, this is a perfect time to start getting these deals.
According to CAR (California Association of Realtors), 60% of home purchases in California for this year were bought using cold CASH! Investors are buying in! They have cash and they are negotiating properties to be purchased at steep discounts. The banks who own the foreclosures are selling these properties at a very low cost because the banks do not need these non-performing assets and pay anymore price in maintaining them as the foreclosure process has cost them dearly.
The banks, of course, want to sell these foreclosures at the biggest margin possible, but so far, only cash investors are buying in. Some properties are even marketed to retail homebuyers for the first 15 days, before they open the property for sale to investors.
If you look at the same article in Time Magazine June 2011, there is a graph inside that shows "it is better to buy than to rent" in the Los Angeles market. Meaning the cost of home ownership is cheaper than renting. So if you are not ready to buy a house to live in to right now, why not buy a house then rent it out? Following Times’ assumption, you buy a house paying $1,300 mortgage per month, then rent for $1,900 gives you $600 cash flow! You add the tax benefits of owning a rental property and appreciation of the home in 10 years. Sum up the tax shelter and the cash flow, one cannot miss the benefit of owning a property right now.
So review your market and contact a licensed realtor who can clearly explain the trends of today's market. An expert realtor can find creative ways of purchasing a property, given that every person’s ability to get financing is different. There are alternative ways to the usual, conventional financing, if you are credit challenged. The time to take action is right now! Don't let this unbelievable opportunity pass.
