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Beautiful Trends Point to a Great Investment Opportunity for Real Estate Investors
This reported sales surge indicates a market trend that will dictate real estate investor actions in the future. The National Association of Home Builders estimated that the sales surge was due to two main factors. In recent years, housing costs soared through the roof and lending practices tightened. Builders have been getting stuck with housing that wouldn’t move and buyers haven’t been able to afford the investment. So, a big switch took place that allowed for builders to move their houses and gave buyers the opportunity to afford them. Discounted Housing In a number of markets, inventory-laden builders have been forced to reduce the overall sales price of their newly constructed homes. In other real estate trends, when potential buyers aren’t financially conscious because of relaxed lending practices, builders are basically given the opportunity to add additional costs that inflate the mortgage. Toilets might be marked up an additional $50. Every board used to build the home is marked up an extra $1.50. Plus, labor costs get a little fatter. Buyers end up paying outlandishly for their investment, but the actual value of the home isn’t close to what they are paying. When the trends of the day get crazy you can be assured that a turn around is about to take place. In this case, builders aren’t able to sell their houses so they are forced to remove all of those additional costs and make it easier for buyers to invest in their own home. It’s amazing to see how much cost cutting can actually take place. A $130,000 home can come down to $100,000 and the builder still makes a decent profit. He just loses his opportunity to make a killing. In-House Mortgage Loan Incentives When builders can’t move their houses, they will consider several options to change their situation. Being connected to a mortgage lender, the builder has the opportunity to provide a wide variety of lending services to anyone with stable employment. From loan processing to underwriting and funding, the mortgage lender might even offer over 100% financing to cover closing costs. Builders also might have granting institutions lined up to ensure the buyer of their investment. The ideal opportunity for the buyer is a completely financed home. The closing cost is covered by the lending institution. A grant further absorbs a significant amount of the mortgage thereby making it easier to secure additional funds. In other words, closing day comes and the buyer walks in, signs documents and leaves with the keys to his property. Aside from a $500 to $1,500 deposit, there are no further out of pocket funds required at all. What a great day, right? Buyer Driven Markets Real estate trends always have ways of flopping, which is great for you because the next investment opportunity could literally be right around the next corner. But I’m getting ahead of myself here. Let’s back track for a moment. Because one day, one trend makes sense. But then, the market gets driven to the edge and another trend begins. After builders saturate the market with outlandishly priced housing, buyers have the perfect opportunity to gain power. They can easily negotiate better deals for themselves and their investment business because builders are desperate to move. This is the final factor of the sales surge reported by the National Association of Home Builders. Buyers have started to look for lower-cost housing because of tightened lending practices. Also, home remodeling costs have soared as well. Buyers are finding more and more that the purchasing price of the old home plus all remodeling expenses drives the costs just as high as a newly built home in most cases. So, plenty of buyers are looking for new homes. But, they won’t necessarily purchase a new home if the deal doesn’t entirely work for them. As a real estate investor, this is an ideal investment opportunity. Investor buyers are hunting for no hassle, brand new below market real estate. Mortgage loan incentives and purchase subsidies are in place with builders. Builders themselves are cutting amazing deals. And plenty of homes have yet to be sold this year. With that kind of a situation, you are in a ripe market opportunity to make a great return on investment. Want to create wealth with relative ease at the click of a button? Start applying these principles today and begin flipping real estate online by starting your 7 Day FREE Trial membership here now at INSTANTRealEstateSolutions.com Brad Wozny |
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