It is 'Buy and Hold' Time!

Cable TV is loaded with "Flip This House", "Flip That House", "Property Ladder", etc. The theme to all of these shows is buy it, fix it up, and resell it for a big profit. Like you, I am an avid fan and often a critic of what the "stars" are doing.

The key to making this work is buying the property far enough below market value to allow the repairs, carrying costs, and re-selling expenses to be paid and still leave a profit. Good flippers invest wisely, but too many would be flippers pay too much for the property. If they proceed to spend too much on the repair phase, or take too long, the profit part of the formula can disappear like a vapor. The "take too long" part has become more prevalent with a lot of flippers in the current slow sales market.

If you are considering real estate investing, proceed with caution, but do proceed. We are in absolutely one of the best buyer's market that has existed in many many years. Now is an excellent time to acquire real property at the lowest prices we have seen in a long time. BE WARNED, reselling that property at a profit is not so easy at present.

That brings us to an investment method many of today's millionaires used to build their fortune. We call this Buy and Hold. In this scenario, the current low prices allow you to buy property at the lower prices we now have due to the recent market corrections. You likely will have to do repairs, some minor, some extensive. But you should still have a solid investment; you just need to hold on to it for a little while.

Once you have the property, a good tenant will be around to make your mortgage payments until the market rebounds and prices rise again. With so many people not buying at present, they become tenants since they must still live somewhere. Since the market correction began (somewhere in 2006 or early 2007 - depending on which expert you consult) there have been millions of people creating new households, graduating from high school or college, leaving their parents home, and starting new jobs. All these life changes create housing needs. We know they have not been buying, so they must be renters.

So, to summarize keep these points in mind:
Prices are still low, mortgage rates are low, and there are still mortgage funds available. If you have good credit, you CAN get a mortgage at a very good rate.

Many people have lost their homes to foreclosure or are offering houses at bargains to avoid foreclosure, so bargains are out there. Like always, you must do your homework.

The usual large number of buyers are not buying, so they are still renting. This means you should have tenants who need housing. When they finally get off the sidelines in a year or so, market values (and interest rates) will probably be rising again and you may have a ready buyer.

So, find a good Realtor with investment experience and go find some bargains. Take a look at my September 4 blog entry:

Searching for a REALTOR®... Homebuyer's list.

In the Chattanooga, Tennessee market, my team and I will help you. Check out UpwardRealty.com
Copyright 2007