Distressed RE Market; Let the Land Grab Begin
Posted by: Administrator in myblog on
Oct 01, 2009
As the collapse of the market seems to be bottoming out, at least on the residential side, there are a lot of investors who are actively searching for investments for their 401k's. With some of the markets suffering from complete obliteration just a year ago, there are an endless number of opportunistic investments in the market especially with investment properties.
Over the past two months we have seen a surge in our clients starting to use their 401k for the purchase of investment properties for use as rentals or to hold for the future. In cities such as Stockton, Ca one of our clients just bought a condo for $24,000 and her rental income on the property is positive $524. This is the same property that two years ago sold for $104k. I cant think of many more investments that offer a better return than that. What our client did was roll a portion of her 401k into a Self Directed IRA account and used those funds to purchase the property. She now has a free and clear property that is cash flowing just over $500 into her retirement account every single month.
Another investment that has become increasing popular in this distressed market is purchasing land and/or finished lots from developers. We have all heard and seen the effects of this downturn on the construction industry. Buildings are being left half built, land is just sitting there with approvals in order to break ground and these developers cannot find the capital to proceed forward. As a result a lot of these projects and lots of land are being fire sold in order to stay alive. Clients have been utilizing their Self Directed IRA's to purchase these distressed properties, knowing that they will eventually rebound and their IRA's can only benefit from the rock bottom purchase price. Over the summer Brooklyn Troy has acquired 3 new distressed developments and many clients have capitalized as a result. There is no time better than now to turn this market of lemons into lemonade and help secure a more comfortable retirement.
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