I have been away from the real estate market for a litte over 2 years now...and have now been reconsidering getting back involved. Are any of the experienced investors (those who were actively investing before this mortgage meltdown) experiencing resistance/hard times in your investment endeavors??
Your feedback will be greatly appreciated.
Regards,
It is a different world out there... Kinda nice in a way.... FAR less competition however fewer mainstream buyers.
Sellers are so afraid that they B E G you to take their house....
And the reality is that every day a house is sold in our market we have to make certain that the house sold we own..
[ Edited by MichaelQuarles on Date 04/14/2008 ]
Hi Michael,
I guess I'm under the assumption that properties are being held onto longer by investors due to the now stringent guidelines set forth by banks in an attempt to decrease the likelihood of ANOTHER foreclosure. I know there are people/investors who are capitalizing on this current fiasco, which makes perfect business since. But it seems inevitable that there are other investors are feeling the pinch.
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It is actually easier than ever to get a loan if you have good credit- financial institutions are still in the lending business, and their pool of potential customers has shrunk dramatically. With an 800 FICO, I get credit offers every day.
Chris
Chris
Makes sense. I hope this is true for me... I am heading to a commercial bank just as soon as I get my taxes done;)
Hi Chris,
Thanks for the reply...but the thing is the average homebuyer doesn't have a credit score anywhere near the 800 range. I am referring to the process and hold time of sitting on a property and waiting for it to be sold...AFTER I have acquired it. Are the buyers of the properties you sale, if you're into residentials that is, still able to obtain financing from the banks w/o hinderances and "extra" red tape b/c of the mortgage mess?
I know builders that are sitting on spec homes indefinitely and I don't want to fall into this dilemma.
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Sorry for not elaborating. Several months ago, an 800 score didn't matter. The answer for an investor was NO. And one guy actually showed me the door! And I was asking for 60% LTV. It didn't matter. So to answer your question about "resistance/hard times"... for investors, the answer is YES!
I think everyone is experiencing some pain. Chris and I run holing companies, so we do not rely on sales, per se. But since I do have a few properties for sale right now (it's a portfolio adjustment, more than anything) I can say that buyers are very nervous and lenders remain tight, especially on credit (from what I see/hear.)
As ITB noted, I have not been trying to sell properties- this is not the best time for that if you are able to hold.
I have never been shown the door when trying to borrow money- last purchase money investor mortgage was in January. My experience has been lenders competing for my business more strongly than ever. It isn't that they aren't as eager as ever to make loans, it is just that they are only interested in "A" paper. Doesn't even have to be 20% down- my last mortgage was 10% down. Not that I am bragging about the rate; but I don't mind paying 7% for a 30 year fixed investor loan even when typical is closer to 5 1/2%. As long as I am making money...
Chris