subject: Coming To An Accommodation With Minnesota Foreclosures In A Rocky Economy [print this page] Looking at a challenging economy in light of Minnesota foreclosures (and nobody familiar with the nation's economy would dispute that it's currently in a "challenging" state) might require that one constantly see the glass as half-full. It's true that Minnesota real estate markets are down, but it's also true that are still opportunities for a savvy investor or prospective property owner out there.
Anyone who's considering taking on the burdens of home ownership or property investment in a down market might want to make sure that the specific market in question is understood thoroughly before jumping into it. It's all about location when it comes to real estate, and purchasing a foreclosed-upon home that will never regain its former value needs to be avoided whenever possible.
A smart thing to do, though, is to take what's known about the specific market and the average price that homes are selling for within that market and then looking at foreclosed properties for certain characteristics. Most especially, one should consider whether the house can be bought low enough and then sold high enough and at a relatively speedy pace to ensure a decent profit.
That's the essence of any actual market, including property, though other investors might be willing to purchase something low and then sit on it for some period of time until a very large return on investment might be able to occur. However, for real estate (unless one is just intending on living within the home), it's probably better to find something low that's easily sold off for more than it sold for.
So then; if buying an investment property is on the menu, make sure that the housing inventory in the market being considered includes a number of bank-owned properties. In many cases, banks at present are willing to let these homes go for much less than what was once owed on them. For example, buying a home for $100,000 that once sold for $200,000 is actually possible under the right circumstances.
Any profit margin between $100,000 and $200,000, of course, will depend on expenses and fees needed to bring the house up to a salable condition and to cover certain closing costs when a buyer's found. Maybe the home will go for $150,000 in the new market. The profit, after all expenses, might be $30,000. That can be a significant return on investment in the new real estate marketplace, one would have to say.
These days, it's probably advisable for most people considering investing in foreclosed properties -- whether in Minnesota or elsewhere -- to go this route rather than to go the "purchase and then hold" strategy because it could be years until the "hold" is justified by a high selling price. This strategy (quick turnaround) is the same most anywhere one would be purchasing, by the way.
Minnesota foreclosures can actually offer a solid opportunity for home buyers and investors who are willing to take the time to find a nice property in a nice location that can return an investment at one point or another in the near future. If this can be pulled off, and investor or home buyer might actually stand to make a nice profit.
