3 Examples Of How To Make Real Estate In Bellingham Pay

Monopoly HousesI admit I “called the bottom” in the winter last year. All the indicators seemed to point to it but, alas, I was wrong.

Now that we are 3 years past the bursting, most of us have resigned ourselves to the fact that we are not just snapping back.

It’s probably not news to you that until we can stem the flow of foreclosures, there is no hope of recovery. And foreclosures are tied to unemployment. And on and on.

But, hey, enough of that – you’ve heard it – let’s talk about something more pleasant. Opportunity. I’m not saying run out and buy something. I’m saying, pay attention, this is a time of change and that means opportunity. Forget about hitting the exact bottom of the market. You can only ever tell the bottom or top afterwards, not during.

Think of it as a range, and in the Buy Low, Sell High proven way to make money, this would qualify for the Low Range.

So should you buy? Well if you accept that we are in the Low range, then you should look around, gather some information. Determine a strategy (Equity, Cashflow, Cash) and see if something fits. Here is an example of each and how they might work now.

Equity: Find an under-valued property in a great neghborhood. Buy it with 30% or more down, ideally. Good neighborhoods would be South Hill, maybe Edgemoor, many parts of Fairhaven, Columbia and Cornwall for a start. The advantages in this market are good rents in good areas and low interest rates therefore low payments. You are focusing on a quality, under-valued home. And you’re not the only one, so once you decide to go this route, be decisive when the right property presents itself.

Cashflow:  Decide what return on investment you want. I like straight cash on cash return. I put in $100,000 I want to make $10,000 a year on it. 10% return. It was an example, but I like 10%, I actually like 12% better than that. Can I do it? It’s hard, you have to look at a lot of properties and stick to your rules. Now granted, when you factor in the added perks, depreciation and (future) appreciation, your return is even greater.

Cash: Buy on the courthouse steps. That’s where the banks officially take the home through foreclosure. It’s right in the courthouse lobby. If you’ve never attended one, you should. It used to be that the bank always bought the property back for the value of the note, if you wanted to buy it you just had to pay more than the bank was going to go. Not any more. Now the trustees holding the sale can bargain. They are authorized to a certain amount.

This is where, hypothetically, you can get the best deals. I say hypothetically because you are not always able to get in the property, let alone have an inspection. So it’s tricky. The foreclosed upon owners could still be living there and you have no idea in what condition they will leave it or when or how.  What looks on the surface to be a good deal may be a nightmare. And did I mention, you pay cash, due in 48 hrs? But is there opportunity?  You bet.

Start taking a look – see if you like the market from an investor’s standpoint. There’s the contrarian principle that says when the majority of people are on board, if you go the opposite way, things generally will turn out better for you. It’s resisting our inherent “mobness” and going against the crowd. Refuse to buy into the doom and gloom. Think for yourself and see the perfect storm of elements that have come together right in front of us: Super low interest rates, affordable properties & good rents.

All the strategies have a learning curve involved. This is where it pays to have help. If you’d like to talk, contact me.