There are two primary ways to make money in real estate investing. Let’s take a look at each method and see how it may work in relation to how the market currently looks:
Method #1 – The “Buy and Flip” Method
Basically the buyer purchases the Paradise Valley property and fixes it up then sells it for a profit.
There are two things going for you with this method:
First of all, in a short sale nobody pays for repairs – After all, the seller isn’t going to pay for it out of pocket (they’re broke) and the bank sure isn’t going to shell out the cash.
As an investment buyer however, you can afford to fix up the home, because you’re going to make money.
Second, you have time on your side. Unlike the seller who was under massive pressure to pay a mortgage payment they couldn’t’ meet, and the bank that had to get rid of properties that are losing them money as fast as possible, you don’t have the same time constraints. You can afford to create a real marketing campaign for the house once it’s fixed up and polished and sell it at a premium price.
Method #2 – The “Buy and Hold” Method
In January 2000, the median sale price of homes in Paradise Valley was $590,000. In January 2005, this went up to just under a million. In 2006, the median sale price went to $1.5 million dollars.
From there, the market stabilized and seemed to take a downturn. small bathroom remodel . Between mid 2007 and mid 2008 the median sale price hit a peak of about 1.8 million dollars and from there has been falling. As of this writing in May 2010, the median sale prices are back at around 1 million dollars.
There are several philosophies that real estate investors subscribe to. It depends on your threshold for risk and your patience.
The “Never Catch a Falling Knife” philosophy says that basically, you don’t know when prices will stop rising and you don’t know when they’ll stop falling. Instead of trying to guess when the market will stop falling, you wait until the price of price of homes start going up instead of down. crowd spring . Texas Foundation Repair contractor . Avoid catching the “falling knife” and getting cut, so to speak.
Yet another philosophy says that housing prices are always going to go up. The population is only going up and premium real estate like Paradise Valley property is only going to go up. Indeed, although sale prices have dropped over the last couple years, over the long run (10+ years) housing prices have almost doubled.
What’s more, now may be a great time to buy simply because there are so many short sales on the market – You have options and you’re likely to get a killer deal.
Between buying and flipping and buying and holding, with premium real estate like Paradise Valley properties you’re likely to make a killing either way. Do your research and take action.
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