Real Estate Investment Strategy during times of US recession
By Jerry on Mar 31, 2008 in Investment Strategies
Question: What would be the best investment strategy if I don’t have have 10 or 20% down, the average REPO in my area is $150,000, I can’t prove my income because I get paid in cash and my credit is really bad?
Answer: Can you afford to buy a home all cash for $100.00?
For $100.00 dollars????
Yes, you can buy a home today during un-officially times of US recession for a measly $100.00.
How about this…. How would you like a FREE House?
You are probably thinking that we are trying to pull your leg or something but I’m not…
Watch this…If you go to Realtor.com you can find this:
How would you like to buy a house for $1,000.00?
Wait!!!!! The above listing is OVERPRICED!!!!…How about buying a $100.00 house?
Oh no!!!! The $100.00 house is ugly and is burned down…How would you like a FREE House?
Before you click away from our web-site thinking that you are being scammed…Please read the rest of this post.
Where are those houses and why are they so cheap?
The above property are located in Detroit, Michigan and they are so cheap because Detroit is probably the city that is going though the most depressive market in the nation.
Why is the market so bad? Because since the price of gasoline increased so much, many of the car manufacturing companies that were established in Detroit closed down laying off thousands of people thus creating this huge decrease in house values.
Let’s talk about numbers
Let’s say that you buy the $1,000 You will put $1,000.00 down to buy it all cash, and let’s guesstimate and say that you will pay $3,000 in closing cost. The $3,000 would pay for Title Insurance, Escrow (if applies), transfer tax, inspections, etc. Your total out of pocket investment is $4,000.
We checked Dataquick.com to see how much this house was sold for in the past and this is what we found:
The $1000.00 house was sold for $68,000 in November, 2005.
Now let’s pretend that it will take 10 years for the $1,000 house to go back to a value of $68,000. That’s a gross profit of $64,000.
That’s a 1600% Return on your Investment!!!!
Let’s say that it takes 20 years to reach to $68,000…Would you agree that you are still making a pretty good return on your investment?
Of course!!!!
What to do next?
You can make money or you can make excuses? The question is….What do you want to do?
Are you going to listen to the people who is saying that we are going through the Real Estate Apocalypse and that money is not to be made in real estate during times of recession?
During the Great Depression, you could buy property at 10 cents on the dollar. The people who bought at the price…turn out to become Real Estate Millionaires.
Are you going to let the fact that those properties are in another state stop you?
Why do you think the property management companies were invented for?
Are you going to let the fact that you are broke stop you?
If you are broke….Why not use OPM (Other’s People Money)?
The limitations are the ones you make up in your head..
Don’t let yourself get in your own way.
Warm Regards!
Real Estate Professionals
P.S. A savy investor always does his/her homework. Talk to a Detroit realtor for tips and advice. Fly to Detroit to examine the market if you have to. Do your research before buying…and more importantly…Take Action! That’s what we are doing ourselves.
