How to Make Money in Florida's Real Estate Market

It's a buyer's market, particularly in certain states such as Florida and Nevada where foreclosures are at an all-time high. Yet real estate can be a wise investment and you can take advantage of the sad state of affairs in what was once a very inflated market.

Five years ago, the housing market in Florida was THE place to invest you money. There was a lot of "flipping" going on and savvy real estate investors could purchase a new home with little or no money down, wait for the construction to commence, and just prior to closing on the newly built home, turn around and sell it to another buyer, earning tens of thousands of dollars. New construction in Florida was appreciating so rapidly, that this was relatively an easy practice.

This was possible in places such as Florida and Nevada because most of the people purchasing new homes in those states were either retiring or transferring from another state. And people normally don't want to wait six months for their home to be built. So "flipping" was a common practice for quite a few years.

Then, all of a sudden, the real estate market bottomed out. And the prices of the new homes began to fall. Many investors were stuck with homes that were worth less than what they agreed to pay. So they opted out and allowed the bank to foreclose. In many cases, the homes were owned not by private individuals, but by investment companies who could afford to take the loss.

How can you profit from this? You can buy low. When a house or condominium goes into foreclosure, the bank is stuck with the house as collateral. Banks are not in the business of selling real estate; they simply want their money back. In many cases, you can put in a very low bid and get the house or condominium for the mortgage amount.

When the real estate market falls, a lot of other corporations are affected. And mortgage lenders are the first in line to suffer. With mortgage rates rising, lenders are desperate for qualified buyers. Even buyers with less than perfect credit can find financing for a home.