Last week I agreed to begin writing a new book that will focus on the mortgage and real estate investing market of today and tomorrow. This is one incredible challenge.
As I sit here today, I really don’t know with certainty where the mortgage market is right now. I certainly will be doing an educated guess – at best – when I discuss where it will be tomorrow and going forward.
Then I get to do the same thing with investment real estate. Actually, this is a little easier.
With mortgages, there has been a total change in the industry. The most popular programs of the past 5-10 years are now all gone. Interest Only loans are still technically around. They have been priced out of the marketplace. The entire sub-prime loan market is gone. FHA used to require a 550 credit score. Now it requires a 620. This has dramatically reduced those who qualify. Investor loans are almost impossible to get and the loan to value ratios are punitive.
What is left are 30-year and 15-year fixed rate amortizing mortgages. Coincidentally, (I am sure) these are the most profitable loans for the banks in America.
That is pretty much the state of the industry today. I suspect it will not change much until at least the summer of 2010.
In the real estate investing world, the biggest factor is the gap between perception and reality in parts of America. In Colorado, we have outstanding factors that would guide most people into investment real estate. We have record high rents, lower costs, low vacancy rates, and short time on the market. Further, our demographics suggest massive population growth in Southern Colorado over the next several years.
What is weird is most people think things are bad and going to get worse. This creates an unbelievable opportunity for the wise real estate investor.
There you have it. That is the foundation of the next book.
