Is it Time to Buy Real Estate Yet?
Posted on: Mar 3rd, 2009 | By Ted Peroulakis | Filed under Real Estate Investments
Real estate prices are down substantially and many foreclosures and short sale opportunities are out there for the picking.
We are certainly in a buyer’s market right now and real estate investors have quite a bit of bargaining power these days.
But is this the time to buy or will real estate prices head even lower?
We are seeing millions of foreclosures coming on the market, which is currently driving prices even lower, but this could come to a head in the near term. Many experts think we could see the bottom in real estate prices sometime this year.
My suggestion: Keep your powder dry and get ready to jump into some real estate investments in the next year as long as the right opportunity presents itself.
My wife and I have had a great deal of success investing in real estate over the years. We were fortunate enough to see the writing on the wall and dumped most of our investment properties in 2006 at a net profit.
I attribute our success to a wise man that once told me “You make all your money in real estate the day you buy the property”, basically this means you have to buy the property for much less than it is currently worth.
Now, we are getting ready to jump back in and are looking to add real estate to our investment mix again. Recently we have been spending our weekends driving around looking at distressed properties. We are looking at properties that are bank owned or are being short sold by a homeowner that is upside-down on their mortgage.
The trick is to find nice properties that you can rent out and make a positive income stream. Essentially, you need to be able to receive more rent money than your mortgage payment.
And the most important part: Low Ball… Low Ball… Low Ball…
You need to make an offer 40% to 50% below the current market value. Now, 19 out of 20 people will tell you to go somewhere else. But if one out of 20 accepts your low-ball offer, you will get the deal of the century.
Source: Is it Time to Buy Real Estate Yet?
Ted Peroulakis, MBA graduated from Florida State University and received a Bachelor of Science in Finance. He has also earned his MBA from the University of Miami. Ted has over 14 years of experience in the financial industry and he is a top performing options trader and financial analyst. He was trained in the World Trade Center by Morgan Stanley Dean Witter and gained financial market experience as a stock broker on Wall Street. Ted is a contributor to the Investor’s Daily Edge. 
Hello Ted,
good points above, how does the long term market look for some of the areas that have a weak job market. Meaning, some areas, the long term job market for the area may look very depressed, closing down of large factories, and even if you purchase at a 40% reduction from list price, the local job market may not…ever recover. Do you have different areas identified of the US where you see stronger job recovery locations than in other regions? I for example am working down in the Mexico Real estate market, and am working in one of the strongest job growth, and population growth markets in all of Mexico (Playa del Carmen, Riviera Maya). I try to keep track of these factors too. What are your thoughts on these factors?