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Two years ago (2/28/2014) I wrote a blog post looking at the Market for foreclosed properties in our area - the post said....

3,587 properties (houses, townhomes, condos) have sold in the last 6 months in our local  MLS area. Out of those - 526 were FORECLOSED......... that is almost 15% of the total sold!!!. Approximately 60% of the properties sold for under $100,000. On the other end of the price range, about 3% sold for $300,000 or more.  

I was curious....... what are the statistics regarding foreclosed properties in our current market? 4,186 properties (houses, townhomes, condos) have sold in the last 6 months in our local MLS area. Out of those 317 were FORECLOSED........ that is 7.6% of the total sold. Approximately 47% of the properties sold for under $100,000. On the other end of the price range, about 1.5% sold for $300,000 or more. These numbers show that things have gotten decidedly better in our market in the last 2 years. Sales were up 17% but the number of foreclosures sold was down almost 50%. Let's hope this trend continues.

Bill Arey   REALTOR

The Pat Wattam Team

ReMax First

[email protected]

Investing in Real Estate - Know Your Numbers

by Bill Arey

Investing in Real Estate – Know Your Numbers

 

Real estate investments should be part of your overall investment portfolio. Why?

Return on investment – plain and simple. In looking for investment property properties the first factor I look for is the 1% rule. Will the possible monthly rent be at least 1% of the investment basis (purchase cost plus any renovation cost).

Example: a client recently bought a one bedroom condo for $58,000, the monthly rent will be $750, monthly condo fees are $100…….. so net income is $650 which is 1.12% of the purchase price. Again anything 1% and above should easily be cash flow positive.  Besides positive cash flow, I look for properties that have the potential to appreciate in value over time and the key to that is the proverbial “buy low”. Recently I have found the best values in foreclosed condos.

Example: a client recently bought a Fannie Mae foreclosed two bedroom condo for $45,500. Comparable units sell for $80,000 - $85,000.

 

There are plenty of opportunities out there and it is possible to start with a modest initial investment. Most importantly – Know Your Numnbers!

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Photo of Pat Wattam Real Estate
Pat Wattam
RE/MAX First, Independently Owned and Operated
4750 Sherwood Common
Baton Rouge LA 70816
Office Direct: 225-298-6900
Office Main: 225-291-1234
Fax: 225-295-1234

RE/MAX First
Each Office Independently Owned and Operated
Main: 225-291-1234

Licensed by the Louisiana Real Estate Commission