Smart Real Estate Investments Still Out There

The housing market is returning to normalcy in most parts of the country. Does that mean real estate investment opportunities are over? Not quite.
By: Robyn A. Friedman: REALTOR® Magazine Online
"There are more opportunities now than there have been in years," says David Dweck, a real estate agent with Re/Max Professionals in Coral Springs, Fla., and an active investor the past 14 years. "With the market shifting, sellers are becoming more realistic and motivated. A motivated seller can mean a buying opportunity for an investor."

Here are some ideas for spending real estate dollars now:

    • Commercial properties. Investors can’t count on short-term appreciation and a
      quick sale, but a good income stream is likely. Focus on properties with long-
      term value like medical office buildings.


    • Foreclosures. 80 percent of the part-time weekend investors who dabbled in
      real estate have folded,” says Michael Perlmutter, who specializes in buying
      and selling foreclosures. “There’s never been a better time because of the
      supply.”


    • Preconstruction condos. Many of the amateur speculators who snapped up units
      in 2003 or 2004 just want their money back, says Mark Zilbert, president of
      Zilbert Realty Group Inc. In Miami Beach. Zilbert said that the investor has
      to be prepared to settle on the unit and hold it for a year or so. After that,
      he says, they should be able to resell the condo at a profit. "They'll
      probably see a 50 to 60 percent return on their money, which is a far cry from
      the 200 to 300 percent we used to see," he says.


    • Retirement and vacation locales. Many popular places all over the country are
      still enjoying a boom. “"If you're a small investor, you should never invest
      in anything that you can't visit in one day," says Michael Y. Cannon, managing
      director of Integra Realty Resources South Florida. "Stick to the neighborhood
      that you know.”


    • Vulture funds. Scoop up bargains when you think the market has hit bottom.
      Real estate analyst Jack McCabe, who has formed McCabe Acquisitions LLC, says
      accredited investors of high net worth, institutional investors and other
      entities can participate in his acquisition firm as nonmanaging members. A
      minimum investment of $5 million is required. He plans to acquire blocks of
      condos in multifamily developments — or entire projects — in many markets in
      the country. He hopes to purchase these properties from anxious sellers at a
      discount. Be prepared to hold for up to 10 years.