Florida Housing Market Repot

Many homes are priced very attractively when compared to cost to build. Many investors are snapping up homes under $50,000 for cash.

Buying for cash is a requirement for getting these properties in today's market. First off because of the current credit crises, getting a mortgage on these properties is not an option. Secondly, these homes are bank owned properties that the banks got back through foreclosures and at these fire sale prices, cash is the only way to get them.

Investors are buying homes at $26 to $50 a sq. ft., when cost to build these same homes are at $75 a sq. ft. or higher. The other reason to purchase these lower end homes is because the first time home buyer market is what is moving, thanks to the $8,000 first time home buyer tax credit and investors want to turn over there inventory as fast as they can.

It makes perfect sense, You can buy two houses for $45,000 each put $5,000 into each for clean up and repairs for the same price of buying one $100,000 home.

 But what if prices keep dropping? Prices may keep dropping, but they will drop on the homes that are at "market value"  that are already not being sold.

 The homes that are being purchased from the banks at wholesale prices are already discounted below a future 10% to 20% drop in housing prices. How much down side risk can you really have on a home priced at $30 a square foot?

Investors are making a tidy profit in this market. This is actually shaping up to be one of the best times to invest in real estate. Investors are buying first time home buyer properties from $ 30,000 to $50,000 and flipping them for $75,000 to $125,000 depending on the home of course. The best part is there should be no shortage of homes to invest in, as there is expected to be another wave of foreclosed properties being released by the banks over the next year!

The problem most of us are having today is coming up with that amount of cash to purchase an investment home, especially in this economy. This is where we have to get a little creative. Here are a couple ways to get started.

First instead of thinking you have to come up with all the money for this type of investment yourself consider getting with family members, friends or other investors to pool your money and resources. Starting with one investment at a time it won’t take long to increase the number of properties your group can purchase simultaneously. Soon you will be able to go solo if that’s makes sense for you.

Another way that has actually been around for quite a few years, but for some reason has remained relatively unknown, is using retirement funds to purchase investment properties.

What a great concept, not to mention avenue, for diversifying your portfolio. Actually the reason it is not widely advertised is that the companies that service your retirement accounts don’t make money when you take your money out of their control. So why would they advertise that to you?

Just think, buying investment properties, selling them for a nice profit and Not having to pay Capital Gains Tax. You pay tax at your regular tax rate when you are able to start withdrawing your monies at retirement.

You don’t have to buy and sell just homes either you can buy homes and build a portfolio of rental properties, or you can buy land or commercial property or in a business. In fact, according to IRS rules, you can invest your retirement monies in anything other than Collectibles, Life Insurance and the stock of S-Corporations.

As with anything else there are guidelines. In order to utilize your retirement funds such as a 401K you must set up and have them rolled into a self-directed IRA.

 At that point you will now have complete control as to how your Retirement Dollars are invested. Now you can invest and take advantage of your areas of expertise instead of letting some fund manager, whom you’ve never met, churn your
account.