The inevitable evolution of real estate
- Individuals bought foreclosed homes and flipped them
- But this is not what’s happening now
- You will see entire developments…
Rental properties are the real estate market of the future. Here’s a recap and the inevitable evolution of real estate.
Individuals bought foreclosed homes and flipped them. Many became rich doing this and everybody jumped on the bandwagon. Next, investors came in and bought foreclosures or short sales and fixed them up and rented them. Then, individuals started buying more foreclosed properties, fixing them up and renting them not flipping them. Next, investors bought multifamily units and fixed them up and rented them. All of these, buy it, fit it, and rent it properties were all being held until real estate prices went back up and owners could sell at a profit.
But this is not what’s happening now. These investors are not only holding on to the units they bought at foreclosure sales, fixed them up, and rented them, but these large investors are now working directly with the builders to buy up their new homes and rent them out. In fact, the builders see this as a lucrative new market. The investors have money. The investors have a new home warranty that if any problems occur the builder has to fix them.
The builders are giving investors bulk pricing for buying entire developments. You will see entire developments, huge developments all being rental properties. Big communities of people who don’t own real estate. As the prices go up down the investors still collect the same amount of rent.
QUESTION: What should readers take away from this message today?
ANSWER: That renting may be in your future.
QUESTION: Why is this information timely?
ANSWER: This information is timely because there are a lot of people out there who want a new home who can’t get financed, get a down payment together and these rental communities with amenities’ are very appealing.
QUESTION: How can readers best apply this information to their lives right now?
ANSWER: Hold off buying any real estate until you explore renting in a desirable area.
COMMENTARY: As a result of this lucrative business arrangement between larger investors, most likely hedge funds, and builders, the builders will be held to much higher standards. Hedge funds have the legal arm to command much more out of the builder than a lowly homeowner ever did. In fact, the builders may have no choice but to add a home warranty arm to their business model that would kick in after the standard builder warranty runs out. This would prevent the builder from having legal exposure to a goliath hedge fund for any construction failure that would otherwise come to light at the end of a warranty period. This is a win, win for the renter who used to be the owner of the shoddy construction and unending maintenance.
AWAITING NOTARIZED PROOF