Cheap Real Estate Property Is Hard to Find


When it comes to real estate in the post-subprime era, it’s really hard to find a cheap property, or even to identify one. Cheap property, including one-to-four family residential homes were very prevalent during the early part of the 1980s. They were ideal for people on a budget; and to give real estate agents a chance to do more business.

Agents could make a better impression on their buying customers by showing them how to buy a home at a low price, do some rehab work on it using the 203k rehab mortgage loan, and resell it at a higher price. Making money with real estate was much easier then – no matter how you approached it. Finding cheap property today is a totally different story.

Between 1987 and 2007 the price of real estate property increased by over 300 percent according to a Property Price Index chart I found on the Steadfast Finance website. While this post is not intended to be scientific in nature, it is necessary to use facts and figures to back up the main idea that, due to the balooning of home prices over the 20 year period mentioned, and the subequent crash, it is tough to find a cheap property which doesn’t have a mortgage that dwarfs its value.

There is not much room left to build equity for the foreseeable future without a dramatic rebound of real estate market prices, and I don’t see that happening anytime soon. However, there may be some instances where you may find cheap property throughout the United States, but the market areas – some being better than others – in which they are located will most likely be depressed, thus removing the motivation that would otherwise exist for you to purchase it.

Let’s face it, most towns/neighborhoods that offer the cheapest properties would normally be economically depressed in most categories. Even those areas that are considered middle class by the traditional definition suffered a great loss of property wealth and has none to offer you as an investor looking to turn a quick profit, or home buyer who is looking to build equity.

There is some indication that property values show signs of increasing but that increase in value, providing it is real and consistent will go towards leveling off the property owners’ existing underwater situations. It does not help prospective buyers simply because the property owners are unable to sell until they are able to satisfy their lenders from sale proceeds. It is unreasonable to assume that a property owner is willing to dig into his/her own pocket simply to make a sale to anyone and walk away that much poorer.

You may be thinking; well if all this is true, how will investors be able to stay in business? The answer to this question is rental income! Some investors buy to resell while others buy to rent. Short term versus long term investments; And you can safely assume that when the buy/sell market is tough, most of them will put their money into rental properties.

Keep in mind that when the market is tough for investors, it is similarly tough for home buyers to get reasonably priced homes to buy and mortgage money to finance them, so many of them become new tenants for the long term investors.

If you are in search of cheap real estate property in today’s (July 2012) market, you might get lucky and find that proverbial need-in-a-haystack property that is either free-and-clear or has a very low mortgage balance, where the owner has passed away and the estate is forced to sell…

Or a free-and-clear/low-mortgage-balance property that is in disrepair and perhaps uninhabitable without major rehabilitation and you have the means with which to purchase, repair and resell. However, you might have to look long and hard, so be prepared for the long haul.


If you have been in the market to buy a home for your own personal use, or you are an investor looking to buy cheap, repair and resell; I would be interested in learning about your recent experiences. If you have had some good luck and found the ideal property for your purposes, or you’ve had the worse time trying to find a property you can work with; tell me about your experience in the comment box. Good luck!

Choosing A Lender For your Real Estate Financing Needs


When dealing with real estate property there are certain realities that cannot be escaped whether you are an individual consumer, investor or corporate entity. One such reality is financing, which is needed on about 99 percent of purchases by individual consumers.

It is true that real estate transactions require a number of specific services in order to satisfy federal and local laws, guidelines and ordinances, but for the home buyer choosing a lender is among the very first steps that should be taken.

Your lender maybe the only third-party entity that can make or break your transaction, either by agreeing to provide you the finances – approve your loan – to purchase your home, or to withhold those finances (deny your loan). So how exactly do you go about choosing a lender that you can work with and who will work with you?

Before you get involved with anyone that you are going to entrust with your most confidential information, your good name and your money it’s important to make sure that they are going to offer you the best treatment, loan program and service, as well as act in your best interests.

However, in order to make sure you will get the best treatment you need to know what questions to ask by comparison to what else is available in the mortgage marketplace. Once you know some of the basic concepts, you can begin to look for a lender that will work best with you.

The first set of characteristics that you will want to look for in a lender involves the type of loans that they offer, the lending policies they are guided by and the various agencies they are authorized to by, e.g. FHA, Conventional, VA, etc.

If, for example, you did a little preliminary research and learned that your monthly costs can be kept at a minimum by excluding any kind of mortgage insurance (PMI or MIP) if you put down 20 percent instead of the 15 percent you had intended, your question to a prospective lender might be, what is the best way to accomplish this?

The loan that is offered to you should fit your individual financial needs and give you the benefit of all the financial community has to offer. This doesn’t just include the loan types, it also includes the extra fees that are attached to loans and how these will affect with you, and whether or not they are all necessary. You should also ask about things such as pre-payment penalties and the cost associated with available rate locks your loan, if any.

You will also want to know how working with a given lender will be most beneficial to you. Sometimes you can have discount points added to your loan in exchange for a lower rate (this is known as a buydown of your rate), as well as any lender guarantees that may be helpful to you.


Buydowns and Lender Guarantees, Mortgage Insurance and Discount Points (in some cases) are all designed to either reduce your monthly payment or your down payment and, edpending on your particular financial profile, will help you to secure financing for your real estate purchase. So do your research – made easier on the Internet – and arm yourself with some basic information with which to interview prospective mortgage lenders.

The main idea when finding a lender for your home or to refinance is to make sure that you will get exactly what you want from the loan. This includes everything from the type of loan that you will get to the timing and type of mortgage insurance that will be offered to you. With any situation, go with your list of questions ready and be willing to listen to possibilities. However, if you aren’t satisfied with one lender you can find another that will be more receptive.

Even if it will be your first time buying a house or if you are trying to get some extra money from a refinance for debt consolidation or educational purposes , you should always walk into a lender’s office knowing exactly what you are getting into (with your eyes wide open?). In the long run, this will make a difference in your ability to live in a home of your choosing and benefit from the best that is being offered in the marketplace.