You know, it was only a couple weeks ago or maybe even 4-5 that "Old School" (my nickname for Allen Greenspan) used a phrase similarly tothis, "the housing turn is in sight". Then he went on to say that "in sight" meant 8 months or so. I hope Old School is right! The Dallas Morning News's Steve Brown reported that the DFDub saw an 18% fall in preowned homes this August compared to last year this time. Ooops! I guess it's got to hit rock bottom before it takes a turn for the better.
Additionally, Steve mentioned that the average sales price fell by 3%. That could happen without the price per square foot falling, but I bet that is not the case.
I had a client looking to buy more rental property. She owns 4 properties now, that are all financed I might add. At the time GMAC/Homecomings was the only lender I knew of that would lend money on a borrower that had four or more financed properties, so she'll have to pay off some mortgages before we can get her another with traditional loans. Anyway, they asked me, "is this just a bad time to buy rental property"? Now I should have just said, "I'm sure if you send that question into the Rain, you'll get a number of different answers"...I didn't. I told her and I believe my answer is right on. Now is a tough time to buy. Some of the good deals aren't as good by comparison to 3-6 years ago, and if you have intentions of buying, fixing up/rehabbing, and them selling, then you probably aren't in a timely buying window. On the other hand, if you are looking to build a portfolio, like they were, then for the long term goal you are great. Where the same home 3-6 years ago that in good shape was worth $120k, and foreclosed or had foundation issues and so forth it could be sold at $108k. That same deal today in good shape is probably worth $115k and under duress sold at $106k. So 3-6 years ago you had $12k to play with for profit and costs. Today that same home in this example is only $9k. This example should show that for buying and selling, right away it doesn't look like the profit margins are as available, but since we all know that Real Estate eventually always appreciates, this example would say that buying homes for your long term rental portfolio makes this the best time to buy them. Buy low and sell high.
See more on Active Rain or me on Active Rain.
Call for mortgage quote, Brad Lynch-469-450-2723
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Tuesday, September 09, 2008
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Testimonials & About Me
- Brad Lynch
- Frisco, Texas, United States
- In 2002, Brad Lynch began energetically consulting families in finding the right mortgage plan for their needs. In the beginning years, he was trained by a mentor who led by example, and this example was the epitome of integrity. Brad learned in the beginning by his mentor that many prospects may not consciously see what good intentions he has for them, do to the “wrap” many have caused w/in this industry, but always do what is right for the customer and in the end it will payoff. Integrity coupled with an energetic nature to nurture relationships, Brad has created clients for life. Through these clients for life, referrals have become the lifeblood of his business.
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