Investors are looking forward to 2008 for the new opportunities it presents—not just for weight loss, but for monetary gain by way of real estate. New Year’s resolutions can be tricky for investors, as they take into account the successes and failures of past investments. While it may be discouraging to fail at shedding those extra few pounds, or to finally give up hope of ever finishing War and Peace, losing sight of investment goals can be much more detrimental—and the consequences much more lasting. For some insight into the goals and resolutions of successful investors for 2008, we looked no further than our 2007 Investor Highlights.
For some, 2008 brings an opportunity to try new methods of investment, particularly within real estate financing. “I plan on taking advantage of subject-to financing,” David Dweck, a south Florida realtor, hard money lender and June 2007 Investor Highlight, said.
While experimenting with new investments and new tactics is important, equally important is the attention investors should pay to past market trends—investors need to be aware of where the market has been in order to be able to place bets on where it is going. Provided investors have staying power and market savvy, 2008 will be a prime year for asset acquisition, Dweck said.
For others, the new year serves as an opportunity to further explore familiar strategies and take advantage of market conditions, including the credit crisis. Seasoned real estate agent, property manager and April 2007 Investor Highlight Robert Locke said Atlanta remains a favorable place for real estate investment because of its surplus of new construction and recent issues in financing and credit, among other things. “The sales market has stagnated. This slowdown is creating lots of deals for the intelligent investor who understands the market and knows where to buy,” Locke said.
Many investors see the start of a new year as an opportunity to re-evaluate their businesses and goals. Tiffany Elder, a Raleigh, North Carolina real estate broker and September 2007 Investor Highlight said she plans to re-evaluate best practices to achieve maximum results with real estate investments. “I plan to systematize my business during the first quarter to ensure that I can achieve optimal results with less effort,” she said. Elder also intends to focus on her interest in development by starting her first subdivision project, she said.
Jeremy Cohen, a real estate investor, entrepreneur and November 2007 Investor Highlight, also intends to systematize his practice, he said. He plans to involve other investors so he can teach what he’s learned, he said. “I have plans to develop my real estate investment strategy into more of a system, so that I can extricate myself and have other people use the same tools that have proven to be successful for me.”
2008 will be a big year for investors bold enough to dip their toes in the waters of the foreclosure market, as banks stand to have a great surplus of inventory, Dweck said.
“The rise in foreclosures will make for great acquisition options for investors with the means to finance a purchase,” Elder said. Foreclosure rates should continue to rise in 2008, supplying investors with opportunities to buy at a lower cost than traditional investment strategies may otherwise provide, according to the National Association of Realtors.
The credit crunch serves as a ripe opportunity for investors with healthy cash reserves to buy into rental homes that prospective buyers may be priced out of because of financing issues. Those who were once prospective buyers have now become renters or lease option prospects, further increasing the demand for rental properties, Locke said.
2008 will be a great year for investors focused on rentals, as lower mortgage rates are making non-owner-occupied financing more attractive, Elder said. “Less availability of 100 percent and aggressive financing options for first-time buyers with less-than-ideal credit will lead would-be homebuyers back into renting mode until they can build up credit and reserves,” she said.
Cohen said he intends to continue investing in real estate in 2008. “Now is the time to buy. Bargains are plentiful, and the savvy investor has tremendous opportunity in this market of hype and fear. I will be buying as much as I can finance,” he said.
Seasoned investors know that legislation can either work in favor of or against the condition of their portfolios. While some investors look forward to the benefits of a healthy rental market, others have voiced concerns relating to the subprime market and mortgage lending. Dweck said that further credit tightening, coupled with market correction, may place an even bigger crunch on the credit crisis. He said that laws will continue to change because of the subprime mess, and persistent issues with fraud.
Some investors, such as Elder, are continuing to watch the pending legislation before making any hasty changes to their portfolios. Other investors, such as Cohen, are looking forward to more opportunities in the foreclosure market as a result of legislation. “New foreclosure laws in some states will provide more opportunity to investors,” he said.
The first day of every year provides an opportunity for investors worldwide to make predictions about the impending year. It is important for investors to take into account the trends that influenced the successes and failures of previous years and to learn from their mistakes. The close of 2006 saw several markets in the midst of a real estate boom—and in many cases, just as quickly as the booms came, they were gone.
Investors should plan for 2008 with a watchful eye on trends that influence real estate, and as the market continues its flux throughout the U.S., and even the world, it is important for investors to experiment with new tactics, set new goals and take some risks.
From those of us here at NuWire, have a happy, healthy and prosperous new year. Cheers to you and your success!