Real Estate. Yes, it is tough, but, if you do your homework and buy right, like previous cycles, what comes down does go back up.

Many people have emailed me to talk about real estate investing in today’s market. What would I do now? Would I consider buying? If so, what are the key factors that should be taken into consideration in this market?

Here are three items to consider that will help assess location, real estate in a local marketplace and strategy:

1. Research the local market where you are thinking about investing. What are you buying—land, commercial, or residential property? What are the vacancy rates in the area? Have taxes or insurance premiums, due to hurricanes for example, changed the potential for cash flow in the area?

2. Look at the health of the local and state economy. Sure, there maybe an increase in foreclosures, but if people are still moving there and the economy is strong, that area will rebound faster than others. There are still areas of the country where the prices of property are going up.

3. Financing options. With the demise of the sub prime mortgage market and even the financial problems with Countrywide, the nation’s largest lender of good loans, financing options are tight. However, if the seller is motivated enough and still has equity, the seller could finance some or all of the sale. Depending on what you could negotiate, you may be able to profit on the property.

Research helps to assess the location, health and state of the economy, future potential and financing options available. Of course, there are many other strategies one could use, but considering the market conditions, I myself would look at seller financing strategies.

Happy Investing!

This entry was posted on Wednesday, October 24th, 2007 at 8:46 am and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.