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Foreclosures Open Up Fresh Opportunities For Savvy Investors
The rise
in foreclosures that we are experiencing this year poses a challenge
our economy simply cannot afford to ignore. For real estate investors
the deal is always to find ways to create value out of situations which
are seemingly bad.
I say seemingly because there is no cloud without a silver lining and
the foreclosure crisis is the perfect example. Let's take a worst case
scenario: the number of foreclosures in the coming months manages to
hit new records which means that the housing industry will undergo a
slump and mortgage lenders will suffer significant losses.
Despite the cut in interest rates by the Fed (the largest single cut
in 25 years as a matter of fact) the crisis of confidence that's being
undergone by the money markets is sufficient to affect a lot more than
just the housing industry which means that suddenly the dreaded 'R'
word becomes a lot more plausible and a recession looks like it might
be on the cards.
Left to its own devices this is exactly the scenario that will pan out.
What becomes a saving characteristic is the fact that real estate investors
act as a catalyst buying up properties that are gridlocked due to foreclosure
and releasing them back in the market while working out deals that free
up cash for mortgage lenders and, possibly, existing home owners.
In the process they create movement in the lifeblood of the housing
market: new home owners who suddenly find they can purchase properties
at prices they could not afford to before. These properties which if
they had been left without the intervention of real estate investors
would have become black holes in the local (and national) economy suddenly
become sources of further wealth, helping money go round through purchases,
repairs and development.
Foreclosures are part of our economic model and when they get out of
hand they can seriously hurt the economy. At this stage it has become
evident however that they are one of the symptoms and not the cause.
By becoming as active as possible in foreclosures real estate investors
help do one of the hardest things possible in the housing market: break
gridlocks and move things forward, helping everyone along the chain
make the money they deserve.
It all starts with finding the right foreclosures to promote and the
right market to promote them in and the right type of buyers to take
these properties off your hand and, lucrative as it may be, it is also
just the right kind of thing our economy needs right now in order to
rebound.(Author)
(Article Source)
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