Regular readers know I've started buying real estate again. But I'm not doing it because I think the market is about to rebound. On the contrary, I don't think we will see 2004 prices for another 10 years. At least. In the meantime, you can still make plenty of money.The reason the market will stay weak is because of economic fundamentals. I've mentioned them before: failing businesses, growing unemployment, pent up credit card debt, etc., etc.
By the first quarter of 2011, Deutsche Bank tells us nearly 50 percent of Americans with home mortgages (about 25 million) will be "under water." That is about double the current rate. A third of those (8 million) will owe more than 125 percent of their home's value.
If that proves true, buyers can expect plenty of bargains in the coming years. But, as I said, I'm not waiting around till some big bank tells me what to do. I'm buying now when the numbers are good. If I can put down 20 percent and get positive net cash flow out of a residential property, I'm going for it. The time to make big profits is, and always has been, when blood is running in the streets.
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