Posted July 14, 2009 by

Today’s Real Estate Market

In today’s rough and turbulent times in our economy, real estate is one sector that is extremely struggling. For over the past year, you cannot turn on your T.V. without hearing something about sub-prime mortgages, foreclosures, and extreme drops in real estate prices. I know it is sometimes hard for some people to get beyond the negativity and see that this is a great time to be purchasing real estate from a personal and investment standpoint. 

From a personal point, I do not think people will see this low of interest rates and real estate values in today’s market in the next twenty years.  At the current interest rates, one can get locked into a 30 year mortgage with good credit at 5.25%. Also, many mortgage companies offer locked in rates that one can lock into the current interest rate and if it goes up then they came remain at that rate or if it goes down they can adjust to the lower rate. Also, the government has upped the amount of money one can get through using a government FHA loan up to $271,500 with only putting down 3%. Just to let you know, there are some stipulations to the FHA loan that require certain requirements to be met involving the property itself.

As far as from an investment standpoint, I think you are going to see a lot of people become very wealthy from this subprime mortgage crisis in the next 10 to 15 years. Investors in certain very hard hit areas like Florida, California, and Nevada, are picking up properties for anywhere to 8 to 20 cents on the dollar. As Warren Buffett would say, “be wary when others are greedy and greedy when others are wary.” This time in our real estate market is the time to be greedy. If you have the capital to start with, there is a lot of money to be made buying foreclosed or distressed properties, holding on to them, leasing them out in today’s strong leasing market, having cash flow during that time, and then selling them when real estate values increase.

I personally do not think we will be out this mess for at least another year to two years, but in the long run, investors will have high returns on properties purchased during these turbulent times and will be very glad they invested when others were too nervous to do so.

• Categories:
• economy,
• fha,
• interest rates,
• investment,
• opportunities