Many potential investors in the real estate market have been paralyzed, either by the fear that the market will continue on its downward slide, or by the lack of available financing. People that have been on the side lines, and are not already invested into the real estate market have a chance to make some money.
Real estate values generally go up over time, so purchasing excess housing in growing areas may provide an opportunity for investors that are willing to wait several years for their return on investment. This goes for finished product or lots that have been abandoned following construction. If you decide to get into this market however, don’t overdo it. Find the area where you want to be, and patiently wait for a good deal to hit the street. With so many homes in foreclosure, there are deals to be had.
If you are a potential lender, now is a great time to find ways to tap into that type of business. Banks are reluctant to lend on real estate, and so there are plenty of qualified buyers that can’t get a loan. This is the backlash to the lenient standards that led to the collapse of the market in the first place. It is hard to believe that the banks will abstain from this excellent source of revenue for very long, since there is so much money to be made. However, they are still reeling from the crash, and it may be another few months or a year before they are ready to re-enter the game. You may consider working with a broker or real estate agents to find potential borrowers.
There is also a lot of land that was speculated and is now held by investors that are going broke. It is a little more risky to purchase raw land in the path of growth if you are an investor that isn’t savvy about development. However, for those who are, there are plenty of choices out there, so be patient and take your best pick. Land investors are becoming more and more desperate, so time is on your side. These types of deals may not “hit the street”, so research and chasing down owners will be part of the process.
Regardless of your position, or which angle you plan to take, you need to make sure you are investing in the right market. You want to be in a long term growth area. You also need to set realistic expectations for return on investment and the term of the investment. Finally, don’t over-expose yourself to real-estate, in proportion to your other types of investments.