Well television got it wrong. Television made it look so easy. If you have been in Real Estate for any length of time, fixer uppers at one time were good deals for those didn't have enough cash or didn't want a big mortgage and were looking for a good deal, and usually the person fixing up the home would end up living in it for a couple of years. But during the housing boom the amounts of money that was made with fixer uppers was huge. Below are some issues investors face today: * Overwhelming back log of inventory of homes that are on the market.
* Banks have tightened loan underwriting guidelines. * The negative impact that the media has put on the housing industry will have consequences for years to come. * Banks helped create, and fed the fuel during the housing boom a couple of years ago by implementing easing of lending programs, such as no money down, no verification of income, and in some cases not verifying assets. With foreclosure's skyrocketing banks are having to take back properties that they really don't want on their books.
They have done a 360 degree swing from over lending to under lending. They are even calling back home lines of credits and lowering credit cards amount to limit exposure. If you were waiting on the sidelines waiting till the market corrects itself you are brilliant. I haven't seen deals like I'm seeing in this market in over 27 years. Distressed properties in my opinion have more negative risk than value.
In todays market there are many options buyers have for a safe investment, because of the amount of new homes in good condition available sometimes at 50 cents on the dollar. In most cases, there is no need to have to put significant money to fix newer homes , like you would have to in a fixer upper. What I am doing lately is finding great deals and quickly finding renters to cover the costs just to break even with the mortgage payments and taxes.
You can only do this if the house is in great condition and don't need much work. This market is cyclical and will eventually turn around. I would rather purchase a new model home at 50 cents on the dollar than a fixer upper. I wish I had a magic ball and could say that I see an end to this but I don't. I wouldn't be surprised to see this last another 24-36 months.
I would like to be optimistic to say otherwise because many of us are suffering enough with the economy ang high gas prices.
F. Lanni is a Top Producing Realtor in The Million Dollar Club http://orlandoreunionresorthomes.com