I watched a lot of investors take advantage of some incredible deals in Minneapolis during early 2009. Homes were priced from $5000 to $40,000. The cash flow was insane. Slowly but surely however, these opportunities have been drying up. More and more investors have been brought into the mix and made the competition for the good deals fierce and scarce. The party seems to be over. Has the ship set sail on great opportunities in the Twin Cities?
I hope not but I think you will need to find other kinds of opportunities to focus on. The next wave of foreclosures is coming, but it won’t be in the same areas as before. The Minnesota Home Ownership Center posted an interesting blog article about the next wave of foreclosures.
According to this article, the suburban communities in the Twin Cities have a large number of homes the have the dreaded “Option Arm Mortgages” that are due to reset in 2010. Statistically, these mortgages have a default rate as high as 80%.
Realtor/Blogger/Investor Scott Ficek is taking aim at where he thinks the next pot of money will be made. (He was certainly right the first time around with Minneapolis) He is doing a seminar at our office in Burnsviile next week entitled “Renting Homes for more than $1500 plus per month.” His new strategy is to focus on higher priced homes with bigger rents and bigger upside potential.
There is going to be some great deals on homes between $300,000 on up. The cash flow on these larger home purchases won’t be as good as the little guys, but if this market ever turns around, the appreciation could be really attractive.
Happy Investing!
1 response so far ↓
1 Know Your Home Loan // Mar 18, 2010 at 10:39 am
Rob thanks for sharing this information. It’s nice to see someone be able to make themselves a pot of gold in today’s market. Investors on the fence…. time to jump!
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