Cleveland Real Estate: Opportunities on the dis-balanced Market.
Let me start from two bold statements:
Cleveland Real Estate market is seriously dis-balanced, and it means a lot of serious opportunities for home buyers.
All home buyers today want good deals but not all good deals are as good as they look.
In many neighborhoods of Greater Cleveland we have few parallel Real Estate markets. Home buyer today has an option to chose from:
- Bank owned homes, including HUD owned, Fannie Mae owned, Freddie Mac owned
- Short sales
- Private Owner occupied homes
- Already Vacant homes offered for sale by private owners
- Homes rehabbed and remodeled by investors
- Homes offered for sale by relocation companies - mostly in upscale neighborhoods.
All buyers today want to think like investors and act like investors (means - buy for less). Not all home buyers have a privilege to do this.
Just few samples.
Scenario # 1. You are a home buyer who shops for a low priced, usually bank owned or short sale property, for example, in still desirable South
Euclid, Shaker Heights or Maple Heights.
Good news - there is a decent inventory of low priced homes in a decent condition. However, as soon as you find a low priced home in a more or less good condition, I can guarantee that few more investors will be interested in the same property, and you will find yourself in a multiple offer situation.
Dis-balance # 1: bottom prices for pretty good and solid homes create harsh competition between cash buyers.
Dis-balance # 2. Remodeling costs may be higher than acquisition cost, so real estate investor should be financially sound and ready to use some extra money for repairs.
Dis-balance # 3. As prices in this category are very often lower than $30,000 and banks usually do not lend that low, there is almost no place for the buyers with mortgage financing. Mostly cash investors compete for the best priced properties. As a result, we have more investors buying to rent out or flip the property than home buyers who purchase their own residence.
Solution for home buyers who want to buy discount properties and need to borrow money: work with a lender who offers rehab programs - FHA 203K, HomePath, or any other rehab loans. Make sure that you partner with a reliable contractor who is ready to use own money and wait until funds from the rehab part of your loan become available.
Look at the houses, which are owned by private owners - people who love their homes, take a good care of them. Price wise it may be not real higher than any project which you buy for less, considering all costs of repair, rental expenses during remodeling, etc.
