Q: With 2012 poised for another drop in home prices, should investors purchase REOs? If so what markets are the hottest to buy?
–REO Brothers, Miami, FL
A: 2012 real estate prices are anyone’s guess. Do you have a crystal ball I can borrow? From what I read about our economy however, I would look for home prices to stabilize more in 2012 as we come out of the recession as most all economic indicators are starting to trend more to the positive. This is a pretty common phenomenon in an election year so there’s no genius at work here.
However, when it comes to real estate, the old location, location, location rule still applies. Properties in good markets will suffer less and poor markets will continue to decline even more. Stick with prime locations and you won’t go wrong in 2012. Remember, investment in real estate should be a long term proposition.
Lee Dworshak is a Cincinnati Realtor®® with Keller Williams LA Harbor Realty in Rancho Palos Verdes, CA.
A: Aside from when, or if, the home prices will drop, an investor should purchase properties that fit their investment goals; whether that be REOs or any other distressed property.
The hottest markets again depend on your investment goals. There is NO one-size-fits-all. Without doing your due diligence as an investor, you will end up just being a speculator (in essence, a gambler).
Go back to your investment goals and plan, then assess what exactly you need in properties to achieve those goals. Once you decide specifically what is needed, based on that criteria, define what are the areas and property types needed to reach those goals. This evaluation will define your hottest markets and whether REOs should be purchased or not.
Adam Aguilar is a Cincinnati Realtor®® with Reliantra in West Toluca Lake, CA.
Are you interested in having a qualified REALTOR answer your questions?
Click through to Ask a REALTOR® now.
Are you a REALTOR who would like to answer consumer questions?
Click through to become an Ask a REALTOR® participant.