This is really a great time for real estate investors. I’m talking real ones with the cash and credit on hand to buy up good deals. Most of the amateur investors have left the market. It seemed like during the boom, everyone was a real estate investor. Everybody and anybody was out there buying single family homes to rent out one at a time. Now with credit not really being available, those small investors have left the scene.
But for serious investors who have made a full time income from this, this is a hay day for them. First of all, as everyone knows, due to the powerful combination of foreclosures and seriously depressed property values, investors can get houses for really cheap these days.
The best places to find investment properties these days are at foreclosure auctions. They are happening and still happening. The story has sort of been buried these past few months due to other highly publicized news, but foreclosures are still occurring at a dizzying pace.
And the Obama Administration’s mortgage modification plan isn’t really helping homeowner’s that much. Most who are part of the plan are in too deep a financial trouble for this plan to work. It is just delaying the inevitable. Many of these homeowners owe more on their homes than it is worth. That means they are just using the mortgage modification plan to buy time. But many will still foreclose, and those house will trickle onto the market. And we should have increasingly more foreclosure properties available.
There is more supply than demand. In addition, there has been an increase in new housing starts. That means contractors are starting to build new homes again. This probably doesn’t make any sense. But the reality is that the market is really low and it’s a buyer’s market. And there are some buyers that prefer to buy brand new homes. This little phenomena is adding to the inventory of houses that are still in oversupply.