Foreclosures Going, Going, Soon to Be Gone!

The window of real estate foreclosure opportunities has started to descend. Soon the conversation will turn to that of lost real estate opportunities. While this foreclosure market lasts, Michigan and much of the nation is breeding a new generation of millionaires, investors who once again are able to flip real estate. Savvy real estate investors are compounding their profits by doubling their money and doubling it again.

Everyone knows winners buy low and sell high. In 2008 and 2009 home values were on a free fall while inventories swelled, which made it difficult and risky to purchase housing. But welcome 2011, the housing market has touched bottom and there's nowhere to go now but up, albeit slowly.

The foreclosure market is seeing 2 moving fronts. First, foreclosures are getting mopped up by owner occupants and investors alike. Banks are liquidating their housing inventories faster and while pricing homes aggressively. And second, the foreclosure floodgates are being plugged. Banks have systems in place to make short sales easier and faster, reducing the potential for future foreclosures.

It's not too late for a novice investor to get in the game. Actually, the timing couldn't be better for new investors to learn the foreclosure housing markets. And not all winning real estate investments are made flipping sales. Keep in mind that rentals are HOT! A symptom of the foreclosure market is that there are a lot of people who will be renting for a long time. When looking at long term real estate investments, pay attention to property taxes and their respective homestead and non-homestead rates. Ask about homeowner's insurance and flood insurance for homes located in a recognized flood zone. Calculate repair costs and costs to cure deficiencies. AND don't forget to check with the municipality for restrictions and additional tax burdens on homeowners like resale inspections, rental inspections and vacant property registration fees, etc. If a novice investor makes a misstep in today's market, holding the investment may very well be all it will take to make lemonades out of a lemon. The short term loss from holding the investment of course would have to be weighed against the potential loss of other new investment opportunities.

As foreclosures slip away, home values will start to rise. Some will be watching the market, some will be in the market and before long, someone will be saying, what market?