Real estate prices are low, but the lack of available financing is preventing people from taking advantage of them. This of course presents an opportunity for investors. By providing hard money loans, investors can make a healthy profit with low risk. See the following article from REIClub for more on this.
It is a truism in real estate investing that money is made when you purchase; the profit is realized when you sell. The problem for the investor is that everyone is trying to buy at a discount. The competition drives the price of any worthwhile property near or up to full market value. Even so called distress sales; foreclosure, bankruptcy, probate, divorce, can result in competitive bidding.
The internet has been a great friend to the seller of property. Fifteen years ago someone with property to sell either had to accept a discount for a quick sale from one of the all cash “we close quick” buyers or spend months waiting for an offer while his property was listed in the “MLS Book”. Now, information about a property for sale is instantaneously transmitted to potential buyers worldwide. We have sold Houston apartment buildings to California based investors, a Bryan, Texas office – warehouse to a Singaporean transportation company, and an Austin church building to a Dallas based ministry looking to expand.
In years previous, being an all cash buyer allowed me to purchase property at 70 – 80% of real value. However, for the reasons mentioned above being an all cash buyer no longer warrants a 25% discount (by the way we are talking about REAL current value here, not some inflated appraisal done one year ago before prices dropped 30%). Going to auctions, subscribing to foreclosure listings, contacting probate lawyers, were no longer generating the deal flow I needed.
It’s really well done! Respect to author.
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