Warnings to Real Estate Investors in 2009

Posted by: Michael Gwynn on February 18th, 2009

Michael Gwynn is a student of real estate. Although he holds a California Real Estate License and multiple investment properties, Michael is currently immersed in the world of online marketing solutions that connect real estate agents and brokers with home buyers and sellers as the Sales Director at www.HomeGain.com.

In today’s world there are many financial casualties associated with the failing real estate market. There are many homeowners who purchased properties and had little knowledge, experience, or insights into the real estate market. But, there were also a number of real estate investors that could have and should have known better. These good investors had experienced bad outcomes with their property purchases because of the lures, pitfalls, and hazards associated with the world of real estate. These lessons are important to learn because there are many new and experienced investors jumping back into real estate in 2009.

Those who do not learn history are destined to repeat it.

There were several factors and causes for these bad outcomes for these good investors. Some were lured by the gains reported in many publications. Others succumbed to the attractive sirens of the real estate Guru’s.

There were those who did not understand the order of purchasing investment property because they purchase equity growth properties before income properties.  Many purchased at the peak of the price points. Other wanted only to stay in their local markets. Miscalculations were made on the costs for holding properties.

The potential issues of holding property were never realistically expected or prepared for by the property purchasers. Methods to truly analyze a real estate market and economy were not effective.  Technology and available information was not used to its best potential. Real estate professionals were seen as the enemy and not used appropriately in the transactions. Many did not understand the cycles involved in real estate.

Why is this important now?

 

The sales of properties are starting to increase. There are many “apparent” bargains in the current deeply discounted real estate market.  Investors are snapping up the REO (bank owned) properties, pre-foreclosures, short sales, and foreclosure auction properties.

There is a perfect storm for real estate investors — low demand, high inventory, low prices, and low interest rates.

Sooner rather than later novice investors will be going back into the real estate market. Will they be armed with the knowledge and lessons learned of their failed predecessors? Will they be subject to the same lures, pitfalls, and hazards associated with the world of real estate?

Hope for the future.

It would be my hope that the real estate investors of today and tomorrow will take the time to study, learn, and apply the lessons learned of the previous round of investors. This is the time to have an experienced and knowledgeable real estate professional to assist in any real estate investment decision and purchase.

HomeGain offers tools and services to help Real Estate Investors, Agents, and Brokers find investment properties, evaluate the value of the properties, and estimate the value differences with property improvements (“What if…” feature).

HomeGain also allows home buyers, home sellers, and investors to find and evaluate real estate agents based on the their needs and desires.

The bottom line for Real Estate Investors in 2009 would be to heed the warnings, proceed with caution, and use the available resources to help avoid the dangers of the real estate market of 2009.

 

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Comments

3 Comments on “Warnings to Real Estate Investors in 2009”

Marc Rasmussen

Excellent post Michael and very true. Buy when the herd is scared and sell when the herd is greedy.

Real Estate Taxi

I agree with Marc, You need to backaway when the herd is greedy. And when that herd is scared jump all over it, if you can.

john doe

Is this the same Mike Gywnn from Philly

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