Real Estate Investors are Finding Opportunities to Rebuild Communities Now

Do you have a workable plan to attain financial independence? Is real estate part of that plan?

If so, you’ve come to the right place. This blog gives you a simple, practical approach to investing in real estate. It appears on the first Saturday of each month.

It’s tough to learn real estate investing on your own. I know first-hand, because I tried that approach. All I got was an expensive education from the School of Hard Knocks.

But my first investing experience made me determined to learn everything I could about real estate. For more than 10 years, I’ve studied with some of America’s most successful investors.

I’m sharing what I learned in this blog.

Real Estate Rewards Investors for Rebuilding Communities

Many investors achieve steady, high-single-digit returns – which is comforting compared with all the ups and downs of stock and bond markets. .

But real estate investing is hard to break into, if you lack expertise, practical experience or street smarts. With help from a guide, you can make well-informed decisions about key questions that face new investors:

  • Is now a good time to get into real estate investing?
  • How can you maximize the capital you have to invest?
  • Does it make more sense for you to be an active or passive investor?

Today I’ll address the first question:

Is now a good time to invest in real estate?

Now is the best time to invest in real estate since 2008, if you have capital to invest. Why?

Because a perfect storm is shaking up the housing market:

  • When homeowners get stuck at home during lockdowns, they realize that their housing needs have changed. Buyers figured out exactly what they want from their next house, such as space for a home office.
  • Low mortgage rates are drawing homebuyers into the market, but banks have cut back mortgage lending, says the Mortgage Bankers Association. Here’s what mortgage availability looks like today:Graph of Mortgage Credit Availability, 2020
  • There’s a shortage of homes to buy: 19% fewer homes were for sale in May 2020, compared with a year ago. “More listings are continuously appearing as the economy reopens,” said Lawrence Yun, chief economist of the National Association of Realtors. “Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”
  • Pending home sales spiked by 44% in May, an all-time record, CNBC reported.

To boil it down: buyers want different homes, but not enough are on the market. Bank mortgages are hard to get – creating opportunities for private real estate investors right now.

All these trends combine to make 2020 the perfect time to begin investing in real estate.

Investors are taking two different approaches:

Passive investors provide seller financing and buy promissory notes, so homebuyers who can’t get a bank mortgage can find private financing.

Active investors are finding opportunities in fix and flip properties, rebuilding communities to expand the supply of affordable housing.

In my next blog, learn more about how to make well-informed choices about investing in real estate.