Over the last 50 year cycle of real estate activity, the average rate of appreciation (on a national basis) is…4.7%. The real estate boom of the middle part of this decade wasn’t a “real” boom. It was all “smoke and mirrors” driven by a combination of predatory lenders, irrationally optimistic home buyers and upside-down government policy.
Owner-occupied homes never were, and never will be, an “investment”. In most parts of the country, housing values (in the last 50 years) have done little more than keep up with inflation. HOWEVER, non-owner occupied investment properties have always created wealth. Every Real Estate investor knows that “cash flow” is the “real game”.
During the “fake” boom, homeowners quickly adapted to the idea of “creating wealth” through home ownership. Owners used equity to fund college educations, buy second homes and otherwise acquire a comfortable lifestyle built on the assumption that real estate would never lose value…rather it would continue to go up, up, up.
Now, here’s the “REAL” Real Estate story. Circumstances have forced the housing market back to “normal”. Normal simply means that owner occupied housing provides shelter…it is not an investment!
In the “new” normal, things are shifting back to the way they were in the “old” normal. In other words, more people will be renters and fewer will be owners. People still have to live somewhere, they just don’t ALL have to own homes. Renting is perfectly acceptable, and necessary, for many people.
For investors, this means OPPORTUNITY, as owner occupied housing trades hands into that of Real Estate investors via distressed property sales (short sales, foreclosures and bank owned property).
For investors who have a Real Estate IRA or Solo 401(k), the opportunities have never been better. The 3-part series we wrote back in August 2009 about investing in distressed properties is as relevant now as it was then…maybe more so. (In case you missed it, here are the links: Part 1 - Part 2 - Part 3)
The “American Dream turned Nightmare on Main Street” has created the greatest volume of home foreclosures in the history of our nation and every indication is that the sell-off of owner occupied homes will continue into the undetermined future.
Alternatively, many of our Self Directed IRA Real Estate investors are “loaning” funds, rather than “owning” property, through a turn-key program with one of our trusted partners . It is classified as “Interim Construction Lending”.
Utilizing Self Directed retirement funds is perfect for this investment since it has the potential of “supercharging” your account at a time when many investors have seen significant losses in the stock market.
For more information, please contact us by phone at 877-229-9763 or fill out a Contact form on our website.