Do you agree?
It’s hard right now to buy properties because so many are upside down! How do you buy a house and make a profit when the loan balance is higher than the value? Add to that the fact the banks don’t want to make loans right now and you’re really facing an up-hill battle. Even with a good job and great credit score, getting a loan is tough! Lenders are so afraid of making another mistake.
Selling is hard – really hard. House prices are depressed so you have to price your home well below what the market says it’s worth to attract any interested buyers. Everyone today wants to buy at foreclosure prices and they still want all the bells and whistles when they buy: hardwood floors, granite countertops, new faucets and light fixtures. You have to put a lot of money into a property just to prepare it to sell for a significant discount. Ugh.
And, there aren’t many qualified buyers. Why?
Because it’s so hard to qualify! Lenders are looking for higher credit scores, more downpayment – creeping back to the 20% down that it used to be – lower debt to income ratios and more cash reserves in your bank account.
It’s not just the buyer they’re scrutinizing harder but the property as well. They’re much tougher on inspectors and even sellers. They want more repairs done prior to closing – less credits given from sellers to buyers for repairs at closing.
If you’re an investor and renovated prior to closing, they’re asking to see a list of repairs made, expenses itemized, proof that workers were licensed and verification of any profit you receive above 20% of purchase price!
Every year, we believe that the next year will be easier, that the market will be trending up. Every year, we realize that we have to wait again. 2011 looks like it will not be much better, if any, than 2010. You can find articles stating that things are turning around but, are they for you?
I recently wrote an article and had a comment from a Realtor in Florida saying that, in Florida, positive cash flow on rental properties wasn’t possible. Her statement, “Positive cash flow is something that just doesn’t happen here because of our home values.” Housing costs there are so much higher than rent potential that you probably lose money every month on rental properties.
We read that this is a great time to buy because prices and interest rates remain so low but, how do you sell to be able to buy and, if you’re an investor, what do you do with it once you own it?
What’s your experience in today’s real estate market? What strategies have you had to change to survive? Are you flipping? Holding rentals?
I’d love to hear from you what you’re doing now.
