Today’s buzzword is “urban”. Young people want to be near excitement, restaurants, and entertainment that only a city can give them. Most importantly, they don’t want the commute. So the burbs are basically out.
Answer? Invest in the [tag-ice]rehab[/tag-ice] neighborhoods close enough to the action with the view but without the cost. The key here is to get in and out before the neighborhoods become hot. Once everyone else discovers such areas, prices will rise.
Are people actually doing this? Yes.
Scott Patterson, a real estate investor from Charlotte, North Carolina, often buys dilapidated [tag-tec urban]homes[/tag-tec] for under $100,000. He renovates and can sometime sell them for over $300,000. Scott also resells a number of them to other investors making a $5,000 to $10,000 profit per pop. So far the 31 year old has done over 50 houses.
His main secret -besides getting in before the crowd?
Get your team behind you. That includes a creative banker who loans you money based on the potential of the property. Also build solid relationships with contractors who will work on a continual bases with you. In other words, if you, or a group of other investors can supply the work you’ll get the service.
Fellow investor Michael Doney, 29, sums it all up. “I just like taking something like this and seeing what we can turn it into.”