The Perfect Storm – Investing & Profiting From the Real Estate Market Collapse in Phoenix, Arizona

What can cause A Perfect Storm?

Very well option million dollar question, isn’t it?

What I actually deem a perfect surprise is a set of circumstances that occur once, maybe twice in a lifetime that offers unmatched possibility to purchase undervalued real estate at unnaturally stressed out prices. There was clearly one similar opportunity back in the 1980s, early 1990s when the RTC (Resolution Organization Corporation Рa government-run entity used to annihilate, exterminate mostly foreclosed commercial assets) had one of the biggest fire-sales of economical real estate in ALL OF US history. This was a time that fortunes were made in the buy of overly distressed real estate assets. At that time, the industry collapse was caused by 3 main factors (1) change in US tax laws impacting real estate investors, (2) Overbuilding, (3) The Cost savings & Loan banking scandal and fraudulent activity of mortgage lenders and identifiers. advogado advocacia imoveis em leilao de imoveis rio de janeiro

So what’s creating the Perfect Storm Today?

(1) Massive residential property speculation in 2003-2006
(2) Too much credit available to acquire and fund real estate which was overused by lenders and uncreditworthy debtors 
(3) The current overall US market decline/recession that is spreading into a global catastrophe
(4) Current lack of funds for qualified borrowers
(5) Current an abundance of properties for sales

This is why, there are 2 stages that follow one after another that business lead to the creation of your Perfect Storm and possibility to purchase real estate at incredible values – The Housing Speculation or Approach phase and the Marketplace Collapse. We will look at these phases so you are more informed on what has led us to this perfect point in time to purchase real estate.

But first, we must examine the main concern a property investor must evaluate think about where and when to acquire a property investment – SITE.

Underlying Market Strength

Now i am sure you’ve heard the age-old adage, “location, location, location”. Excellent different rotate on this saying. My very own goes more like, “location, timing, cash-flow”. Nevertheless, location is still number one on the list. In the event the underlying market is not strong with potential for rental and value boosts in the future, then what’s the point of purchasing the first place?

First, let’s take a look at City Phoenix as an entire for location. Why the heck would you want to buy property in the midst of the desert?
Even though our market is greatly depressed right now, Phoenix, az has shown impressive resiliency and permanent value admiration for a number of reasons:

(1) Climate – Persons want to have here due to warm, sunny weather. It is why snow-birds come in flocks for the winter and leave the workplace. We all believe that the baby boomers are reaching retirement living age.
(2) Affordability – Phoenix, arizona is one of the very affordable places to are in the US. While this figure took a non permanent hit over the last boom, we have fallen back off to being extremely attracting business based on real real estate values, labor pool and overall cost of living. This will carry on and catch the attention of business, labor and pensioners to the area in the future.
(3) Standard of Living – very high. Ease of commuting, and a fresh young, attractive city leads people to want to have here.

These factors have led pre lit to the exceptional positive population growth Metro Phoenix az has experience for the past 5 decades. Also during times of economical hardship, people still continue to move here at an exceptional pace. This places pressure on the real estate market and inevitably causes appreciation.

After deciding that Phoenix is the right spot to invest in real estate, your next task it to select a sub-market within the community region that makes the most investment sense. A few of the main factors include:

(1) Area of greatest price reduces
(2) Proximity to employment
(3) Proximity to amenities
(4) Quality of area
(5) Strength of local rental market/values

These will be discussed later in this report and a competent real estate professional can assist you in selecting sub-markets to invest in that match these standards.