In just about every Denver zip code, the inventory contains a certain share of distressed property which can have some effect on the values of the neighborhood.  Some areas of the Denver real estate market struggle with this more than others and in some cases the numbers of distressed property can significantly devalue and entire area.

photo courtesy of respres – Flickr Creative Commons

It is difficult these days to find very many neighborhoods without some of the inventory being bank owned, pre foreclosure, short sale, etc…in other words, a distressed property. What kind of effect do these properties have on the value of the neighborhood?  Typically they are priced lower than the other property in the neighborhood, sometimes a lot lower.  If there are just one or two in the neighborhood, it may not drastically impact overall values, but it may to some degree.  If there are several, or in some cases, predominantly distressed property then the values will usually decline significantly.  Good for some, bad for others.

Many of the homes become less cared for or uncared for, causing an eyesore for the rest of the neighborhood.  Especially in the summer months, these homes often become vacant and the water turned off.  In this scenario, about the only thing that grows are the weeds.  Usually, lots of them.  Neighbors aren’t happy, they have to look at the yard every day and watch it devalue their own home.  Not good.

So is this good for anyone? Unfortunately the economy and the effects of unemployment and a housing crisis has caused so many typical, average homeowners to find themselves in financial difficulty, many of which struggled hard to maintain their dream and ultimately had to give way to pressure of finances.  Homes fall into foreclosure and the effects are mentioned above.  Who can win?

Investors.  People or companies that find themselves in a fortunate position to be able to purchase and renovate these distressed properties for pennies on the dollar at times.  They clean up the home and the yard, get new owners or renters in the house and help restore the area in a small way.  Who else wins?  Buyers.  Normal buyers looking for a new home.  Often these distressed homes can offer affordability to a buyer and with some sweat equity, they too improve the area and take advantage of the opportunity.

If you may be looking to invest in real estate in Denver, or maybe just buy your first home or a move up, let me know and I would love to help.  There are opportunities out there and it is an incredible time to take advantage.  Not to mention the help you may be giving to the neighborhood.

The headlines are loud and clear and everywhere, “recession, depression, housing crisis, unemployment, and the national credit rating is devalued”.  With all this great news, how could I possibly suggest this be a time to invest? Especially in real estate?

Yet that is exactly what I’m asking you to consider.  Yes it is true, real estate values have been hit hard in the last several years and many areas have been decimated with foreclosures and distressed properties can be found everywhere.  However, looking at the long, cyclical history of real estate markets in this country, over time real estate is still a powerful investment.

Some argue that real estate is too risky, the bottom hasn’t been hit yet so it would be better to put money into the stock market.  We’ve seen with the recent volatility of the stock market, that can be far more risky. 401k’s and other investment accounts can be wiped out practically overnight.

There is an important point to make here.  That is the difference between investing and speculating.  Real estate investing looks at market trends, demand for rentals, neighborhood values and affordable financing among other things.  I’m not talking about get rich quick, fix and flip (although there can be opportunity here) strategies.  I’m talking about solid investment, buy and hold, long term property investment which historically almost always winds up a winner.

So, if you wonder where to put your extra retirement income and not just place it in another mutual fund or money market, then consider real estate investment.  Take advantage of the all time, incredibly low interest rates we have now along with the low cycle of the market with value opportunities in every area and buy some rental property now with an eye on the longer term gain and the shorter term tax advantage.  You may already have the bulk of your investment money in a retirement account.  That’s ok, there are vehicles like self directed IRA’s that if done correctly, maintain the tax advantage and allow for real estate investment through the account. I can’t provide legal and tax advice, but I can provide guidance to help you make real estate investment a very successful strategy.

They say, buy a rental for each of your children, if you have any, when they are young and use it to fund their college education when the time comes.  Who knows, depending on where you buy, maybe they’ll even live in it while at school.  If I can help you or someone you know make real estate investing a tool in your arsenal, please get in touch and I’m happy to help.

720-849-6101

Some good news for Denver real estate investors and buyers. HUD has eased the requirement of the “90 day rule” which required a seller to have held title to a property for at least 90 days prior to being purchased by a buyer using FHA financing.  HUD had previously allowed homes owned by foreclosing institutions to waive this rule.

This change can now allow investors and buyers to take advantage of buying homes for resell to an FHA buyer, even within 90 days!  There are, of course, certain stipulations to this waiver.

However, this is more great news from FHA that it intends to look for ways to continue to support a housing recovery. The waiver begins February 1, 2010 and extends for one year at this time.  If you feel you qualify and want more information on how to take advantage of this opportunity, let me  know and  I can get you started in the right direction.  There are still a lot of investment opportunities in the Denver real estate market.

Steve Scheer, Denver Realty Partners
Real Estate in Denver & The Suburbs

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If you would like more information on the Denver area or more information on Denver real estate, contact Steve at 720-849-6101.