Written by Kevin Rocio – Multi-family specialist – At Properties
With all of the bad news that continues about the U.S. economy, many people are tempted to hide their head in the sand and pretend it isn’t happening. From my experience investing in various markets, including commercial real estate, I have found that the most successful investors are always keeping a lookout for a unique situation. In my opinion, we are now seeing one of those unique situations inside of the apartment building market.
For example the New York Times published an article today titled “U.S. Mortgage Relief Effort Is Falling Short of Its Goal”. Here is the “bad news”:
1) The dropout rate from the Making Home Affordable Program was very high: 96,000 trial modifications were canceled by lenders in July, 2010. The number of canceled trials now exceeds 616,000.
2) Many modification seekers did not qualify for permanent status, either because their debt load was not heavy enough, they did not live in the house, their documents were incomplete or they simply failed to make the trial payments.
3) Critics say the program will provide little long-term relief.
In addition to the failing U.S. Making Home Affordable Program, the government now admits that as many and 1 out of every 3 home mortgages is now underwater. This is a startling statistic and it can only mean that we will eventually see more foreclosures.
So how does this affect the apartment building investor? The answer is simply one of supply and demand. It is obvious that families who are leaving their homes because of foreclosure will have to live somewhere. The best choice for many former homeowners will be to rent an apartment. This means that demand for apartment housing in the near future could outstrip demand.
As I continually stress to my apartment building investing clients, it is absolutely essential that the beginning commercial real estate investor educate him or herself thoroughly before deciding to invest their hard earned money and time into buying apartment buildings.
Get your head out of the sand and see the “bad news” for the opportunity that it truly is. Message me and I will recommend the best course to enroll in your area so that you can begin to invest in highly profitable apartment buildings anywhere in the United States.
There are distressed opportunities like these in every town. Don’t let one pass you by.
Robin Wilson | Buying, Selling, Leasing, Home Staging & Property Management