Investing in Real Estate

by Stacy Francis, CFP®, CDFA

A client just called me up to ask what my take was on the real estate market. She half-wanted to get into what mass media refers to as “flipping houses,” but was concerned that this may be the end of the real estate boom.

The truth is, of course, that the real estate boom ended quite a while back, in most places. What we are seeing now is a bit of a correction, along with the effects of a slowing economy. When two families in a neighborhood are trying to sell their homes, and a third one forecloses, the next buyer expects to pay less, throwing the area into a downward spiral of more worries and more foreclosures.

The good news is that if you are in good to excellent financial shape, and you are in no hurry to sell the houses you buy, this is not a bad time at all to get in. Historically, and with a few geographical exceptions, real estate prices have never kept dropping for very long. If you have the patience to keep placing bids well below market prices and hope someone gets desperate and accepts, you can score yourself some fantastic deals. And if you can wait long enough, chances are you will be able to sell the houses for significantly more. With these lower prices, I would actually say it is less risky to get into real estate now than, say, a year ago.

Keep in mind that while the above applies to most areas in the US, local exceptions apply, so make sure to take the pulse on your neighborhood before you hop to it.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.