What Product Type Should I Invest In?

What product type should I invest in?
By Miguel de Arcos
Sperry Van Ness Florida
Managing Director

Investors often ask me, “What product type should I invest in right now?” My answer is somewhat ambiguous… While many agents have their own opinions and large organizations have specific wants, personally I wouldn’t say there is any one particular property type I like over the other. The trick is just finding the “best” deal for you or your group’s objectives.

We are having a harder time finding straightforward cash flowing opportunities despite the major distress in the market. The REO properties that come to market for the average investor, only make it that far because they were not an easy disposition. Instead, we are seeing well priced “creative” opportunities that really only appeal to local investors who can see the upside and past the lack of cash flow or low CAP rate.

We are having great success trading failed residential land deals to investors with a long term hold mentality. Right now zoned and approved land is selling for a fraction of what is was worth just 18 months ago. The challenge is that these need to be all cash deals. Banks are NOT handing out land loans. Be sure to do your homework though. You don’t want to find yourself owning land that is worth less in 5 years than what you paid. Amendment 4, if passed in FL this Novemeber, could greatly effect land values. If done right, you can realize unbelievable returns. Additionally, certain land plays take no effort in the upkeep, have affordable real estate taxes and carry a high yield when selling in 5 to 10 years when housing bounces back. Click here for a prime example.

At the end of the day, there is not one product type we prefer over the others. It really comes down to the opportunity, your comfort zone and your cash position. There are a lot of distressed sellers out there who need to be taken out of their positions. Don’t limit yourself. Let your Advisor show you ALL the opportunities out there.

Let me know how we can help,

Miguel

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