This is a great market to invest in. I just hung up with Kevin Bent at WR Starkey Mortgage and non owner occupied investor money is at a 5 ½% rate. Can you believe that? This is record lows for investors.

Another piece of good news for investors is Fannie Mae and Freddy Mac is considering lifting the 4 unit maximum. They are seeing the light that “Good Investors” can pull people out of this crisis and provide housing for those that have lost their homes.

Price wise, the best investment opportunities need fixing. Their prices are low because banks want to dispose of these homes quickly and they need work. A good philosophy is to “Fix and Hold.” Fix and flip is not a valid plan because the desired yields cannot be made. An example of fix and hold: Buy a 4 bedroom home for $130,000. The down payment is $26,000. Let’s assume the repairs are $10,000 with you doing the work. Total investment is $36,000. A 4 bedroom home just like this we sold in the Vista Grande area. Rent has been achieved at $975.00 per month. The payment is $740.00. The positive cash flow is $235.00 per month, $2760.00 per year. This is 7.6% return on investment. Hold this home for 4-5 years and another $40,000 in equity can be achieved.

Flipping the home in this market would only have achieved after costs (S.P. = $175,000 – 8% closing cost & commissions = $161,000 – carry cost and initial loan costs $8050.00 = $152,950. Subtract $10,000 in repairs = $142,950 which leaves $6000.00 profit. This is not enough to support the risks.

I hope this helps you. I have been investing in homes for over 30 years. Please give me a call and I can help you.

Thanks,
Brian