Many property flippers are questioning their approach to real estate investing. What was once an easy profit has become something of a struggle, and investment properties are continuously taking longer to sell. This has led many investors to discontinue flipping real estate and begin searching for other investment opportunities. Some investors have even bailed completely out of the real estate market.
Granted, times are getting harder for real estate investors, but that does not mean that there is no longer any money to be made in flipping. As times inevitably change, it is up to the investor to revamp his strategy so that he can continue making money in a tight market.
One of the benefits of a declining real estate market is that properties can be purchased at rock bottom prices. Yes, homes are losing value, but this only means that you can purchase more home for each dollar that you invest. And as any investor will tell you, the key to making money is buying low and selling high. That makes the current real estate market a perfect place to buy, buy, buy.
The downfall of a declining real estate market is that the number of houses for sale far outweighs the number of buyers. This can make it difficult, but not impossible, to quickly flip a property for profit. What is needed, then, is not to forgo real-estate investing altogether but to change your sales strategy so that you can stay ahead of your competition.
To make money flipping homes in any real estate market, you need to sell the property quickly. In fact, the majority of flips that lose money do so because they simply sat on the market for far too long. With this in mind, it makes sense that you can still make continue to sell quickly.
The number one thing that you can do to ensure that your properties sell before those of your competition is to offer something to your buyers that they cannot find anywhere else. A good example of this is seller financing. Seller financing not only attracts buyers, it is also a great way to supplement your income during a time when you might not be able to earn as much profit from real estate investing as you were once able to.
Offering custom upgrades is also a great way to attract buyers. You can do this by marketing the home before it is completely finished. Many buyers jump at the chance to choose the finishing touches of their new home. Allowing buyers to choose carpet color, appliances, and other last minute details can give you an edge over the competition.
Keep in mind that each market is different and will require different strategies for success. Being open to change and being willing to adjust your marketing strategy to reflect that change may be just the thing to keep the money rolling in while your real estate investing competitors throw in the towel.
During the last 12 months the five most competitive two year fixed deals' fees have increased from 998 to 1,500. Three year fixed deals' fees have also increased from 575 to over 1,100.
Last October the base rate was 5.75% and the average interest rate of the top five two-year fixed rate mortgages was 5.68%, but now it is 5.57%. Three-year fixed deals have seen a similar tiny reduction in interest rates with the average rate of the top four deals moving from 5.84% to 5.65% over the same period of time.
All the recent publicity recently about the credit crunch and the bank's fluidity problems has stoked the near panic in people and they are tempted to grab the best percentage rate deal they can find. The problem is that very often they overlook the fees which when added to the 2 or 3 year deal make the mortgage a lot more expensive than it first seems.
People really need to consider seriously the cost of these fees. It's too easy to just focus on the interest rate that's been charged but especially in a shorter term deal they will have a serious impact on the true cost of the mortgage.
There are still many good deals out there for people with substantial deposits or equity in their home and strong credit ratings. Unfortunately many people will not be eligible for them as lenders are increasingly taking a tougher line.
All brokers and intermediaries should reconsider their strategy in helping clients wishing to raise capital in the light of the recent credit crisis and changes to the Consumer Credit Act. The changes in the market and to the Consumer Credit Act mean that a secured loan could be a much better option for many clients.
These new changes changes to the act mean that all secured loans for residential purposes of any size come under the Consumer Credit Act and therefore every loan has to have a cooling off period, so the client is not pressured and an important factor is that early repayment charges are a maximum of two months interest depending when in the current month they notify the lender. When you add in that there are no upfront fees in the shape of application fees, booking fees and valuation and conveyancing costs then it's pretty easy to work out that on a direct comparison secured loans work out to be better value for clients.
If your mortgage deal has some time to run and you're tied in but you want to raise some capital or consolidate some other debts then looking at a secured loan could be a better option than a re-mortgage.You now have the added protection of the Consumer Credit Act, a lack of upfront fees to enjoy and of course much smaller early repayment charges and you've no need to contend with the ERPs on your current mortgage deal.
Both James Klobasa & Russell Marsh are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
James Klobasa has sinced written about articles on various topics from tax, Marketing Secrets and Arts. James Klobasa, once broke with no job and $20,000 in debt made a choice that changed his life forever. That choice was investing in Real Estate. With the founder of, The Little Building Co. you too, can learn at. James Klobasa's top article generates over 135000 views. to your Favourites.
Russell Marsh has sinced written about articles on various topics from Real Estate, Successful Blogging and Internet Marketing. Get the best in the UK market. We will scour the entire UK portfolio. Want a mortgage? then go to. Russell Marsh's top article generates over 9900 views. to your Favourites.