Jobs ‘Time Bomb’ Set to Explode

Timing couldn’t be worse for state and local workers as city, county and state governments struggle to raise taxes and/or cut spending to cover massive shortfalls of $469 billion dollars. The Economic Policy Institute published a report indicating that the U.S. government needs to provide $150 billion dollars in direct budget relief to prevent between 1.1 million and 1.4 million more job losses. This would be on top of the 5.5 million jobs lost already in this recession.

So what does this mean for real estate investors? Here’s my “3 for Free” insights…

1. Job losses will continue so don’t overpay for investment property. Job losses along with continual increases in foreclosures will provide tremendous stress on consumers and with over 14% of all mortgages in default or in foreclosure this should continue for the next 24-36 months.
2. People need a place to stay so plan on buy and hold strategies for single and multi-family properties. Be selective with tenants and make sure you treat good tenants well. They are the life blood of your investment property. Hire good management if you have to with the side benefit of removing stress from your life.
3. Learn about creative financing options to acquire and sell property. These include buying subject to, using lease/options, 2nd mortgages, mortgage wraps, short sales, partnering, trading or payment substitutions and more.