Real Estate Investing

Across America, builders are saddled with unsold inventory and are being forced to get creative. Builders are ever eager to build and lenders are ever eager to lend to whomever, wherever. After all, it is their lifeblood. It was an ominous train headed for Disasterville and it finally derailed, causing the housing market in some areas of the country to become reminiscent of the 1980’s.

Builders are coping and doing the best they can to survive. Licking their wounds, builders are turning to auctions as a means of unloading these houses. The housing market has swung so fiercely in the buyer’s favor that they can demand lower prices or incentives even if the home is auctioned, according to an article by United Press International.

The Good: Builders might not starve, or even lose any weight at all. Furthermore, investors have a golden egg just waiting to be harvested. After all, most savvy investors will tell you to buy when no one else will. A recent study shows real estate is still the top investing choice for the vast majority of self-directed investors, particularly for the purposes of renting the property out. Smart move. Our recent interview with real estate investing expert Lisa Moren Bromma reiterated this point. The current condition of the housing market dictates that real estate be held, not flipped.

The Bad: Existing homeowners neighboring the auction properties are really, really mad.

According to the San Jose Mercury News:

“In his own attempt at civil protest, homeowner Randy Brown tried to scare off investors one day by raising his garage door, pulling out his jacked-up truck painted with green flames, cranking his music and revving up his motorcycle. ‘I bought my house on August 16,’ Brown said. ‘If one of these houses goes for the minimum bid, I will have lost $155,000 in six weeks.’”

Unfortunately, Brown isn’t the only one dealing with such a scenario, though he might win points for most creative.