A GREAT TIME TO INVEST IN REAL ESTATE LEX LEVINRAD
of homes that make great rental properties for landlords and also make great properties for fixing and flipping to
first time home buyers. FHA loans are getting approved and many first time home buyers are buying their first
home instead of renting, which means there is a substantial pool of buyers for these entry level homes. In South
Florida most of the homes that we sell are priced at less than $100,000. Potential landlords are especially
attracted to houses in the $60,000 to $90,000 price range since the cash flow opportunities are tremendous.
One example is a student of mine that purchased a house for $37,000, spent $12,000 repairing the house and
then rented the house to a section 8 tenant for $1,250 per month. We haven’t seen that kind of cash flow in real
estate for at least 30 years, if not longer. I speak to my real estate associates in California, New York, Arizona
and Nevada and they all tell me that the situation is the same in their states. Affordably priced single family
homes are where the action is right now in the bank owned property market.
Low priced homes will move first because these homes have the most buyers. Potential buyers for these homes
are landlords, retirees and real estate investors looking to fix and flip properties for a profit. For the first time in
many years, homes are finally priced affordably. First time homebuyers can purchase a home with an FHA
mortgage and have a monthly mortgage payment equivalent to what they were previously paying in rent. In
many cases their mortgage payment can be lower than what they would pay in rent. And, these first time home
buyers only need to put down 3 ½ percent for an FHA mortgage, which means that anyone with decent credit
that is renting could probably afford to buy the home that they are currently renting if it is an affordably priced
home.
There is also a tremendous opportunity in flipping properties for a profit. Investors can purchase a bank owned
home for $70,000, spend $15,000 repairing it and flip it for a profit of $25,000 or more. That is why so many foreign
investors are trying to buy
these properties. We have
investors
that
purchasing
properties
are
multiple
every
single
month for the purposes of
fixing and flipping these
properties
for
a
profit.
These investors can buy
20, 30 or even 40 homes
per year to fix and flip. If
you are a cash investor
your return on fixing and
flipping houses is much