From a hard money perspective, we have established that some markets are now becoming very attractive for investors. Buying properties in such areas, may be one of the best investments investors will be able to make in a life time. Identifying these markets and the properties that make sense to buy is going to be a factor of success. Here are some pointers:
- Markets first touched by the foreclosure wave
- Markets with a lot of foreclosure currently
- Property rent can cover mortgage payments
These markets are at or close to the bottom. They were the first market touched because the primary home owners had limited or bad credit history and limited or no down payments. Home owners bought properties they could not afford speculating on property value increasing. These past home owners can not today qualify for any type of financing and are becoming renters. Some of these markets have lost 50% of their values or more.
Today investors are buying in these markets at rock bottom prices and some time at below value. In this case the “value” would be defined as costs to build even if you had the land for free. As hard money lenders we like to work with investors in these areas as we know our loans are better protected. In these markets, we would be lending in general up to 70% of purchase price.
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