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As I continually stress to my apartment investing students, it is absolutely essential that the beginning commercial real estate investor educate him or herself thoroughly before deciding to invest their hard earned money and time into buying apartment buildings.
With all of the bad news coming out right now about the U.S. economy many people are tempted to hide their head in the sand and pretend it isn't happening. From my experience investing in various markets, including commercial real estate, I have found that the most successful investors are always keeping a lookout for a unique situation. In my opinion, we are now seeing one of those unique situations inside of the apartment investment market.
For example the New York Times published an article today titled "U.S. Mortgage Relief Effort Is Falling Short of Its Goal". Here is the "bad news":
1) The dropout rate from the Making Home Affordable Program was very high: 96,000 trial modifications were canceled by lenders in July. The number of canceled trials now exceeds 616,000.
2) Many modification seekers were not qualified to receive permanent status, either because their debt load was not heavy enough, they did not live in the house, their documents were incomplete or they simply failed to make the trial payments.
3) Many Critics say the program will provide little long-term relief.
In addition to the failing U.S. Making Home Affordable Program, the government now admits that as many and 1 out of every 3 home mortgages is now underwater. This is a startling statistic and it can only mean that we will eventually see more foreclosures.
So how does this affect the apartment building investor?
The answer is simply one of supply and demand. It is obvious that those families who are leaving their homes because of foreclosure will have to live somewhere. The best choice for many former homeowners will be to rent an apartment. This means that demand for apartment housing in the near future could outstrip demand.
This is why I urge you to take action now. Get your head out of the sand and see the "bad news" for the opportunity that it truly is.
About this Author
If you are looking to expand your investment portfolio and you would like to learn more about the many benefits of an apartment building investment then I suggest that you read my free mini course on apartment building investments that can be found at Apartment Building Investor
If you are really serious about learning exactly how to find, buy and manage very profitable apartment buildings then you must enroll as a student in my Buy Your First Apartment Building E-Course
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