By Ken DuVall
There’s no question that America is in a tight spot. It’s not pretty out there. Most days we still get recession related bad news. But tune out the negative chatter for a moment and listen up. All our recent financial and housing crises have in fact led to opportunities for smart investors who want to get rich the right way. Real estate remains the original get rich slow scheme. Visit a casino if you want to gamble.
The reality is our economic collapses have actually created an exceptionally favorable environment for real estate. Some get the elevator, some the shaft! Interest rates are low, property values are depressed, and real estate is still a great long term investment. It’s a smart player that knows where he/she’s at in the game. Doing it the wrong way is what put us in our current jackpot. The right way will lead to great financial gains over the long term. I’ve been doing this since 1963. Nothing’s changed in almost half a century.
You might call this a class in “Real Estate 101”. First of all, you need a nest egg. If you haven’t already got one, save up. Cut every possible expense you can- as I’ve said many times, there’s no free lunch- to build up your savings. No pain, no gain. You will need some cash to close the deal. We got a “G.I.” (generous in-law!) loan for our first house.
Your credit rating must be in order. A low FICO score can cost you a bundle in higher loan costs, or even prevent you from getting a loan at all. The best deals are available to investors who have both cash and sparkling credit.
Buy only properties in the path of progress, where pride of ownership prevails. Those areas will continue to improve in desirability. Call your Realtor for the latest offerings. Look in areas where people really want to live. People make the values. Rentals in Chico are in greater demand than ever.
Look for underachieving properties that are ‘tired’ with deferred maintenance needed. You should be looking for properties that are not already in ‘silver platter’ condition. Why? Because the value added appreciation has already been taken by the current owner. You’re going to create your own new value. Remember: you want properties that need “TLC”- tons of loose cash!
After refurbishing, you will attract tenants who might not have wanted to live there before. And now the rent can be increased because it’s a more attractive place. At a certain point, you can afford to turn it over to professional management, let them deal with your tenants and maintenance while you sit back and enjoy appreciation, tax benefits, and the fruits of your labor.
Successful real estate investors tend to be diligent, conscientious, hard working individuals. They have vision, commitment, personal skills, and resources. You too can acquire unique properties with that all-important value-added potential often missed by others. Take advantage of this buyer’s market. Today’s depressed prices have nowhere to go but up over the long term. Find that diamond in the rough. Be a winner!
Ken owns Ken DuVall & Associates, REALTORS at 3rd Ave. & Mangrove in Chico. Ken was the 2001 President of the Chico Assn. of Realtors and the 1995 Chico Realtor of the Year. See Chico MLS listings at www.KenDuVall.com and call Ken at 345-3700 for all your real estate needs. Free consulting.
