You may have heard that it is a good time to buy a home and you may think it is merely the hyped-up advertising of the National Association of Realtors.  It may also be that, of course, but it really is a good time to buy the right home, because I am walking through homes that sold for $360,000 in 2005 that are today selling in the range of $120,000.   Not every house in every neighborhood of course, but if you know where to look and have some patience, they are available, for even less than that.  But this article is not necessarily focusing on buying homes as primary residences.

For the past several months I have been seeking investment homes for various buyers in the Pembroke Pines, Hallandale, Dania and Hollywood areas.   One tactic that real estate agents now employ for modern shoppers is to set up a search in a select area with the buyer’s search parameters such as number of bedrooms, baths, square footage, pool, lake and so forth.  The MLS computer can then email listings that meet those criteria.

The problem with the above search technique for bargain hunting is that it will produce selections you might not want walk into without a protective suit and a can of Lysol.  So lately, I have taken to previewing bargain homes, of which the majority are foreclosures.   In order to find the best bargains, you need to know your buyer’s intentions.  Is the purpose to rehabilitate it and resell or is it to do a light fix up and face lift and rent it out?

For the rehab/resale scenario, there are opportunities for investors to purchase a home, fix it up with no more than $15,000-$20,000 and possibly resell it for a nice profit of as much as $40,000 to $60,000 or even more. 

In my opinion, these purchase, rehab and resell scenarios are byproducts of thoughtful planning and execution.   The buyer and agent must be on the same sheet of music, as far as the area and type of home selected, the amount of money the buyer will put in for rehab and the sale price afterward.

Likewise prices are now low enough that you can purchase these homes and rent them out and have money left over…cashflow.  Section 8 housing vouchers in this area will pay up to $1520 per month for a three bedroom house and over $1900 for a four bedroom house.  Even if you choose not to go the Section 8 route, it serves as an indicator of the rental values in given areas. 

There is money to be made in purchasing, fixing up and reselling or renting out homes in select neighborhoods at bargain prices.

If you are a landlord and prefer to rent out your purchase, make the place safe, habitable and presentable and you should have no problem having extra money left over after all expenses and, as a big bonus, your investment house should be worth much more when the market turns back around.

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This entry was posted on Thursday, September 11th, 2008 at 10:09 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.