Time to buy distressed real estate in USA, said Robin Trehan in London, UK

PR Log (Press Release) – Dec 08, 2008 – Time to buy distressed real estate in USA, said Robin Trehan in London, UK

Robin Trehan said, today’s economic crises in the United States has many people holding onto what money they do have.  They are hesitant to invest in anything that might cause a loss of even more capital. There are a few investors, however, that have examined the current situation and realized that opportunity for gain is available in the real estate market.  A record number of homeowners are finding themselves in distress, interest rates are the lowest they have been for nearly forty-five years and once the economy begins to move upward again, the first area that will feel the effects is the real estate market.  All these factors combine to make investing in distressed real estate a sound choice.

In the United States, real estate and the economy are closely related.  As the economy has faltered, more and more homeowners are finding it difficult to keep up their mortgage payments, causing banks to foreclose at ever-increasing rates. Investors who are educated in areas such as short sales can often buy these distressed properties before a bank forecloses.  The cost can amount to a few cents on each dollar.  This type of situation, while not ideal, is often to the benefit of all parties involved.  The homeowner is able to get out of the mortgage without having to ruin his credit too badly, the bank gets at least a portion of its money and the investor becomes owner of a property for a mere fraction of its value.

In an effort to head off even further foreclosures, banks have been steadily decreasing their interest rates.  What this means for investors is they can buy these distressed properties at a lower initial price and then re-negotiate the mortgages at a lower rate than the property currently has.  By turning these homes into rental properties, the investor can possibly cover the monthly mortgage payments and realize a profit.  Realizing a profit, the investor is able to put money back into the economy. This brings us to the third factor.

Being so dependent upon each other, gains in the real estate market improve the economy. For example, Distressed Homeowner is struggling.  He has lost his job, can’t pay the mortgage and the bank is threatening to foreclose.   He is buying only what he absolutely needs for his family to survive. The bank holds mortgages from not only Distressed Homeowner, but also several others. As they lose money, they must cut back on employees, creating even more people in distress.  Along comes Mr. Investor.  He buys the distressed property, freeing Distressed Homeowner from the added financial burden.  He in turn seeks rental property, which adds to the economy and leaves him enough extra money for spending on things other than necessities. In the meantime, Mr. Investor has turned the distressed property into a rental one. She not only can pay the bank, but also has enough money to put back into the economy. The bank is once again realizing a profit and needs to hire employees to keep up. Distressed Homeowner gets a job and is now in a financial position to consider looking for a property to buy. Property values are increasing as more former homeowners are becoming able to contribute to the economy. Mr.. Investor ends up selling the property she bought for pennies on the dollar at its full value.

In any time of financial crisis, there are always options.  The current financial condition in the United States is opening up an opportunity for gain in real estate.

contact- Robin Trehan
www.creditcapitalfunding.com