OfflineFor the purpose of discussion, let's consider this. With the tax incentive gone, it seems that the only buyers are investors. As we all know, investors are looking for a deal at a small percentage of property value. Wholesalers need to purchase at a price that allows them to resell the property and pocket a profit. The sales price average continues to drop because of these factors. Properties that were purchased a year or two ago at 60% to 70% of value are now valued at market rate or lower. Cash flow properties of a year or two ago are getting hard to rent with a positive cash flow because of the competition of lower priced properties, that can be rented at a lower rate. What will it take to turn this trend around and stabilize the market? A buyer who wants to hold onto the property for an extended amount of time, is afraid that the property will not appreciate or that it will take so long to do so, that a home is not a good investment anymore. What are your thoughts?
"NOW GO FIND A DEAL"
Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.
Frank Outlaw
Every path you take in REI have a risk factor. But I think, it all depends on the State where you do your REI. In my state, Wholesaling and Lease option is really the trend right now. I just do wholesaling for now while studying the Lease Option. I still consider myself as newbie and open for learning. Blessings to all. LA
Everytime you repeat the words "I CAN DO IT" with conviction, you cancel or override your fear and increase your confidence. By repeating this affirmation over and over, you can eventually build your courage and confidence to the point where you are unafraid. -Brian Tracy-
all I care about is cash flow.
All my properties have a nice monthly return and at the same time all of them have lost a ton of value or are under water.
At this point not worth my time to try and do loan mods or refi's as long as the cash is coming in, i'll just wait it out
Thanks for your response. Have you had to reduce any of your rents yet?
"NOW GO FIND A DEAL"
Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.
Frank Outlaw
Actually, in 3 of my properties I had new tenants and actually raised the rent from the previous.
My houses are all in college towns and the average time they stay in my places are 3 years because when they renew for the second year, I don't raise their rent, all repairs are immediately taken care of, and every thanksgiving I give them turkeys.
I think the market is stabilizing now, and maybe it is taking time but remember during the boom period, you had people who bagged groceries(nothing at all against that) purchasing houses they knew full well they couldn't afford. Now the correction is to make sure that those who cannot afford be allowed to purchase, which lessens any future damage.
I think we're on the right path
Actually, in 3 of my properties I had new tenants and actually raised the rent from the previous.
My houses are all in college towns and the average time they stay in my places are 3 years because when they renew for the second year, I don't raise their rent, all repairs are immediately taken care of, and every thanksgiving I give them turkeys.
I think the market is stabilizing now, and maybe it is taking time but remember during the boom period, you had people who bagged groceries(nothing at all against that) purchasing houses they knew full well they couldn't afford. Now the correction is to make sure that those who cannot afford be allowed to purchase, which lessens any future damage.
I think we're on the right path
I,m in Phoenix. I have had to reduce one of my rents. My lease option property (that I purchased 1 1/2 years ago at 60% of value) is under water so the leasee is not able to purchase at our agreed on price, and I can't sell at current value. They can get another lease at a lower rate, so I will be loosing them. I have not tested the market yet to see what my lease amount will be.
"NOW GO FIND A DEAL"
Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.
Frank Outlaw
I am not sure if the final sale price (between the wholesaler and the end buyer) is the sale that is recorded. The contract price for the sale, is the original agreement. The wholesalers mark-up is a seperate agreement, and is probably not included in the sale price that is recorded. I may be wrong on this. If someone knows, please let us know. The mortgage rules that allowed unqualified buyers to buy homes did not come from the banks. They came from the Government. The Banks did make a lot of money for awhile, but I don't believe they are going to come out ahead in the end.
-e
"NOW GO FIND A DEAL"
Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.
Frank Outlaw
Yes, e you hit it on the head. There was concern by the government that not everyone was able to follow the American dream because of their income, so bills were passed that required banks and Fannie Mae to take on loans they normally would not approve. I'm glad there is someone else out there that knows this. Most people do not realize this. Here's one of the article from the NY times on that. http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-ai... (because you wouldn't believe the number of people that don't believe it! LOL)
"In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups."
area? College Towns that is great. Are there any more available in the college towns in your area?
i think he was talking to elix, he said his properties were in college towns