***In Real Estate, Fortune Favors the Brave

Just how bad is the current real estate market? It is difficult to say. Last week, a story on Fox News reported that "The pace of U.S. home building unexpectedly strengthened in September as new housing starts rose 5.9 percent." However, a story in Mortgage News Daily emphasized that despite that uptick, new housing starts are still running 17.9 percent behind where they were one year ago. So what is the best way to play the current market? Here's a summary of advice I'm hearing from the Trump University faculty.

• Take advantage of the strong buyer's market. There are many areas of the country where houses are sitting on the market. That means that it is a good time to buy properties for attractive prices, negotiate aggressively for owner financing or buy foreclosed properties. But remember, you could be sitting on those properties until the market strengthens. That's why the words "buy and rent" have replaced "fix and flip" in many recent articles about real estate.
• Don't pay too much. For some focused advice on determining the highest figure you should pay for any property, see my blog post of September 27, Success Comes from Making the Numbers Work.
• Don't over-improve residential properties that you intend to sell. This is no time to build a family room or install new central air just to differentiate your property from others on the market. Do the essential fix-ups to make your properties competitive against similar properties on the market. But remember houses sell because of location, size and price as compared to comparables. In the current market, spending money on nice-to-haves can cut too far into your profit margins.
• Look for properties in communities that are relative tax bargains. Most first-time home buyers base their buying decisions on how much they can afford to pay monthly, not the selling price. That is why it is a good strategy to invest in communities with low real estate taxes. They could be rural communities, or towns where large tax-paying companies or shopping centers are located. By the way, a book that can help you find low-tax retirement communities is America's Best Low-Tax Retirement Towns: Where to Move To, and From, to Slash Your Taxes in Retirement! by Eve Evans.

nIs this a confusing time? Of course. When you come down to it, most times are. Even in boom climates when houses are in short supply and prices are surging, you can still lose money or fail to get top dollar for the properties you sell. So don't be an ostrich. Make investments, but smart ones. Our Real Estate Investor Training Program can teach you the up-to-date, confident outlook you need to make money in this, or any other, marketnnMichael Sexton is President of Trump University.