It appears that the “Bigs”–the large investors–have begun to move their money back into real estate after a lull. Everyone in the real estate business (those of us who actually work at it) already knew this was going to happen. The indicators have been suggesting an upward swing in the residential market for about 9 months now. In November of last year, the real estate market actually bottomed out, and now it is once again on the rise. Of course, it’s rising from a much lower level than it was in 2005, but it’s rising all the same.
Steve Bradley's Real Estate Blog
Steven C Bradley, CA Dept of Real Estate Lic. # 00869762
Archive for November, 2009
Getting money for real estate, part 2
There are really only 4 sources of cash to make real estate investments–
- Your own cash, which makes sense if you want income, but don’t need to leverage growth
- The Bank’s cash (fill in the name of the bank here), which works if:
- You have no more than 4 properties total (banks and other lenders are currently restricting your ownership numbers to 4 or fewer properties. Considering that leveraged purchases and realistic rents are the bread and butter of real estate investing, this makes little sense–it does prevent speculation, but certainly does not provide an appropriate path to investment.
I didn’t get my offer accepted? What happened?
What happened is that the inventory levels are now so low that virtually every agent who lists property finds himself with multiple offers on hand, and his seller selects the best one. This situation actually started to occur sometime in the late winter/early spring of 2009, long before the media began to report it. Those of us in the business found that the agents who had bank-owned property were treating everything as a “silent auction;” the offers would be made, and then later on the successful bidder would hear that his offer was accepted, with all the conditions the bank saw fit to place on the transaction. Shortly thereafter, the cash buyers came out of the woodwork, and then after that, the cash offers began competing with each other. So what’s a homebuyer to do? Here are some strategies you can use to make sure that your offer gets a good hard first look:
