Tuesday, April 24, 2012

"Mailbox money"................

Finally an article about real estate investing written for the common-sense investor!   After two years of reading about all the big money flocking to "safety" the "core" markets and over-paying (again) for the honor of owning trophies, my trade magazine highlights the money to made in secondary and tertiary markets.  About time.  Of course, it would be a stretch to call our market even tertiary.  Still, small town America is home to some of the best deals going in investment real estate.  Full essay is here.  Money quotes are here:

"Asset tangibility is also a factor. Baker works with local private investors who like to know the property and the trade area. In other words, they want a property they can literally hold on to. 'They’re not thinking in terms of hold periods,' Bakers explains. 'Their goal is long-term income — mailbox money.'"

"When investors finally find the right property in the right second- or third-tier city, they don’t want to let it go. 'Lately, investors seem to be planning on a longer hold period than investors who were buying properties 10 years ago,' Berezin says. 'They accept that, while this market is clearly going to support appreciation, this is not an environment where a two- to three-year hold then flip strategy is going to succeed.'"

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