Not a subscriber? Click here to learn
more.
|
| Home | About Us | Resources | Archive | Free Reports | Market Window |
Banks Have Finally Cried "Uncle" in Real Estate – Time to Buy NOWBy
Tuesday, April 24, 2012
I couldn't believe the bank countered my offer...
I just offered to buy a bank-owned property for 90% less than it was professionally appraised for in 2009.
The bank countered my offer within a day... still at a 90% discount to that appraisal.
The bank CLEARLY wants this property off its books... It's been stuck with it for a few years, and it's finally crying "uncle." It's had enough pain and it is finally willing to accept any offer that comes along...
Granted, we're talking about raw land in northern Florida, something nobody wants to buy right now... But at this moment, I think I can hardly go wrong... I believe this is the "V-bottom" price, like the Nasdaq's V-bottom in late 2002.
Take at the Nasdaq's bubble, bust, and flatline below, and notice the V-bottom in red...
 The Nasdaq did nothing for much of the decade in the 2000s, hovering around the 2000 level (in green) for many years after the bubble burst. But buying during the V-bottom would have still made you some REAL money.
This is not an isolated event... We saw the same type of V-bottom in the stock market in March 2009 – before stocks doubled in price.
The V-bottom moment is the moment of maximum panic for sellers. And at the moment of maximum panic in real estate, you can find extraordinary prices...
Don't get me wrong... I'm not buying expecting that real estate will soar to its old peak. I just believe the bank is selling at a point of maximum panic... so I can get an incredible deal. At this point of maximum panic, prices are often NOT rational.
As another example, a friend over the weekend shared a similar story to mine...
"Our church is growing, and we recently bought 40 acres of land for our NEW church for something like $600,000. During the boom in 2006, the previous buyer paid around $3.5 million for that land."
My friend's church bought that land for about an 80% discount to that previous buyer's price! They're buying in the V-bottom too.
Sellers in general – and banks in particular – are crying "uncle" now. They want to get this stuff off their books.
And it's not just raw land... The banks (and the government) are desperate to unload the houses on their books, too. In many cases, they've turned the sales over to "quick sale" teams that are dropping the prices every two weeks until an offer comes in. (You can read more on that here.)
You are in the perfect position...
The banks want to unload this stuff... Meanwhile, we have record-low mortgage rates... And record-high "affordability" (meaning that more households can afford the median home price than at any time in history).
Around here (in northern Florida), houses are selling below replacement cost – and you get the lot for free. It's true. And they're practically giving raw land away!
The V-bottom prices will go away soon... Over the last 12 months, existing home prices are actually UP 2% nationwide. Real estate is starting to come back.
I believe you can get the deal of a lifetime, right now, if you're simply willing to go find it... but the window of great opportunities – V-bottom opportunities – is closing fast.
So get out there and get the right property for you now...
Good investing
Steve
Further Reading:
Right now, Steve is personally pursuing some of the greatest values he's ever seen. "With housing more affordable than ever and mortgage rates lower than ever," he says, "we have incredible upside potential."
Steve isn't the only one who sees value in today's real estate market. Self-made millionaire Mark Ford told DailyWealth readers how to make 54% on your money in one year and Brett Eversole recently explained how he's getting the best possible deal in housing. "You could put $6,000 down... and make a $100,000 gain as the market recovers," he writes. Get the full story here.
Market NotesANOTHER LOOK AT THE CRITICAL "CHINA SITUATION" The past few weeks of trading have been good to China bulls.
We frequently note how China is the center of a great financial debate. Some world-class analysts, including Jim Chanos, say the country is a powder keg of government malinvestment... which will cause a huge economic slowdown. On the other hand, you have many "China bulls," who say the bearish arguments are overblown and overhyped. Since China is a key cog in the global financial engine, what happens here is extraordinarily important to your investments.
There are several ways to keep tabs on the China situation. As we noted back in March, you can monitor shares of Brazilian iron ore giant Vale. You can also monitor the "Dow Industrials of China," the Shanghai Stock Index. The index tracks the share prices of China's most important corporations.
As you can see from the chart below, the Shanghai Index suffered with most other assets in 2011. It fell from its April peak of 3,057 to 2,148 (a 30% fall). The index spent the first few months of 2012 rallying off its lows (A)... only to sink lower in March (B). But in the past few weeks, the index has found buying support... and is rallying toward a short-term high (C). As long as this rally holds... and keeps the index above its 2,148 low, it's a sign China is holding it together.
.gif) |
In The Daily Crux
Recent Articles
|
