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There is the right way to invest and the old way to invest and if you're investing the right way you could set yourself up for life. The old way of investing was based on appreciation and a wide array of financing options for even the worst borrower. If you are stuck in this way of thinking you are one of those crying and whining about the market and you will be for a long time to come. This way of investing is gone with the wind and all that remains is the griping industry remnants left in the dust. The right way to invest is based on the huge foreclosure market and its crippling effect on values. You're probably asking yourself how that can be a positive, and here's how. The real estate market is currently supporting two distinct markets. There is the homeowner market, which consists of homes that are primary residence to its owners and there is the foreclosure market. The homeowner market is made up of homes that can be financed with traditional FHA/conventional financing because the homes will pass a mortgage appraisal. The foreclosure market is primarily composed of homes in poor condition that will not pass an appraisal and therefore in most cases cannot be financed traditionally. This leaves cash buyers as the only outlet for banks to rid themselves of these liabilities. Cash buyers are able to take advantage of these abnormally low values and profit heavily from them. An investor in Cleveland can purchase a property for $25,000 put $20,000 in repairs and rake in $1200 monthly in gross rents. That's 32% annual return on your investment! Try getting that from your 401k. My company specializes in taking the cash buyer business model to the traditional investor who relies on purchasing investment property with a 25% down payment on conventional financing. We achieve this by purchasing and rehabbing the property so that it is now financeable to the average investor. I have clients all around the world purchasing investment property with 25% down and seeing huge ROI's. A typical deal works like this. We buy and rehab a duplex in a good neighborhood. We then hire a property management company to screen and place desirable tenants. Once this home has been renovated and now has tenants in place it can be financed because the banks now view this property as an asset.
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