With the ‘pop' of the housing bubble, many investors in St Louis & St Charles real estate put a hold on expanding their portfolios. Risk, that four-letter word, was the topic of every conversation. However, smart investors know they can still buy real estate and make a profit.
Short-term vs. Long-term Investments
Even now, St Louis & St Charles County real estate can be a short-term or long-term investment. Let's take a moment to examine the market:
- There is still at least a seven-month supply of homes.
- More foreclosures are hitting the market, potentially driving down the prices of homes.
- Lenders have become stricter with their lending guidelines.
- Many first-time, second-home and upgrade homebuyers are unable to meet the stricter lending guidelines, even with good credit.
If only there was a way to lower the supply of homes, match credible buyers with the home of their dreams and make a profit...
Owner Financing as a Long-term Investment
Real estate is still a viable long-term investment, but, as with short-term, it comes down to owner financing. (This is not the same as "For Sale by Owner," although some get the two terms confused). With owner financing, the investor steps into the roll of the lender. As with a traditional lender, the homebuyer signs a real estate note agreeing to pay a certain amount each month for the cost of the home, as well as interest.
Why is this a good long-term investment? Because owner financing provides residual income. The investor receives that amount every month for the life of the loan or until the home and interest is paid off. This is good for the buyer who can't get a loan through traditional means, and it also benefits the investor who has the upper hand in sale negotiations.
Owner Financing as a Short-term Investment
Most investors want to make a profit right away; they don't want to wait to make their money back. However, once signed, the real estate note is a negotiable instrument; in other words, it can be sold to the highest bidder.
No matter what the St Louis or St Charles real estate market is like, there's always opportunity. Look around at the great deals available and see what you can make happen in 2010!
If you're looking for a great short or long-term investment property, I can help. Call me at 314-630-4227 or email me at email@example.com for more information.
Real estate note http://www.realestatelawyers.com/Promissory-Note.cfm