By Nicholas Vanikiotis
Flipping houses can be a great use of your time and money, especially when the market is hot. But what about when the real estate market is on a cold streak like it is now? How is an investor supposed to deal with such a bad real estate market and economy? There are a few ways to go about investing in such a market so investors can still have a solid revenue stream.
One of the first steps will be to make sure you have enough cash on hand and to maintain good relationships with real estate agents and lenders. Due to the recent credit crunch lenders are much more strict about whom they lend to, so cash is necessary for investments right now. Fostering good relationships with real estate agents will benefit investors because the agents will find you highly discounted prices, thus benefiting you and the agent.
The main focus for any flipper should be foreclosed properties and those properties with high discounts. This is a hot time to buy due to the fact that everything is so discounted, but investors must be willing to take risks and come up with the cash. Investors must also be willing to tae a hit on their profit margin if they continue to flip during these times. Houses are not selling at the prices like in the early 2000s so the investor must make the house more appealing which includes lowering prices.
An alternative to flipping houses right now would be to purchase homes, renovate them, and then rent the property out instead of selling it immediately. This would ensure a good stream of revenue until the market will give an investor the price he or she would like. Holding property for the long term is most beneficial in these hard economic times.