In spite of some gloomy, but real, news recently I'm glad to report that there are buyers just waiting for some "sanity" to return to the investment real estate market.
In the past several years many investment grade properties were purchased on pure
"speculation" by buyers who simply want to "flip" these for instant and large profits.
Even marginal core city multi-family rental units where purchased ( and sadly financed) for extraordinary high prices by many infomercial inspired new guru real estate buyers who wanted to "flip" these into the sky rocketing condo market and again make speculation profit.
The wild real estate party is over and yet he high prices remain in the clouds.
Serious and experienced real estate investors seek what is known as cash-on-cash return. They could place capital in a savings bank, they could play the stock market but many would still prefer to purchase real estate for a long term investment.
But not at speculation prices. Each property must yield a positive cash flow after expenses and debt service!
Buyers seek a fair return on their cash investment of between low of 7% to 11-12%+ depending on condition, location and most of all that four letter word:risk.
This current real estate market has a way to go before the "dead wood" is cleared out of the path. It going to hurt and be painful.
Yet true opportunities will eventually begin to surface and know that there are qualified and sane buyers waiting for the right wave!
BIll McInerney
Commnercial Realtor
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