All you have to do is turn on the television to hear yet another person discussing the housing market and the ever increasing number of foreclosures. So, the question becomes. . . Is this a good time to buy real estate?
Ask Yourself these questions:
· What is my goal in buying real estate ? If you're buying for long term wealth then the answer may be different than if you need immediate, quick cash. Depending on the market that you're in it may or may not be a good time to buy and hold. If you think that your market is still coming down and it has another 20% drop in it's future, then buying and holding is not the best option right now. However, keep in mind that timing markets is really difficult, even for the really experienced investor. Do not get greedy and wait until the very last minute or you could miss out on some great opportunities.
· Do I know what's happening in my area ? Have you been keeping up with real estate statistics in your area and what are your feelings about the future market. This plays heavy into how a real estate investor defines their Business model. In my market right now I'm still just wholesaling and moving quickly. We have had 2 months of flattening so I'm continuing to watch that and as soon as I see inventory drop to below a 5 month supply and prices level off for another couple months, then I'm going to begin buying and holding again. Talk to some Local Realtors and to your Local Realtor board, along with other real estate investors from your Local REIA to get a pulse on your market.
Do I have a way of buying deals ? One of the best strategies that is working right now is buying properties at the courthouse steps and selling quickly to other real estate investors or to first time homebuyers. Another strategy that is working is buying bulk REO's. Both of these strategies require money, and preferably cold hard cash. Do you have a private lender that you can work with to quickly and easily take advantage of good deals when they come along? If you do not have a private lender then do you have another plan for getting the money together – hard money?
Do I have a Back – Up Plan ? You plan to buy it at the courthouse steps, do some basic fix up work, put it on the market below comparable prices to sell quickly and sell it to a first time homebuyer – sounds like a great Business model. One that we use all the time. As with any good Business model always have a back up plan in your back pocket. Do not let the "what ifs" sidetrack you or keep you moving forward, but do have a back up plan in case Murphy shows his ugly head.
The bottom line is that every market is different. You have to make educated decisions based on your market and your goals. Some of the wealthiest people in the USA have made their money in the real estate market. Many of them will tell you that they made a lot of their money during bad markets or what is considered by many to be down markets. The key to making it work is above. Do your homework, set a plan, then take action to put that plan into motion!