We’re likely all familiar with the premise of this blockbuster movie: a large, hungry shark invades a community and wreaks havoc by snatching up surfers, swimmers and divers, hurting the local economy and thus leaving the island in a state of panic.
Many might have the same idea when they think of real estate investors: money-hungry sharks invading a community to wreak havoc by snatching up run-down houses, fixing them up and selling them for huge profits, and leaving the area in worse condition than they found it.
In the movie, the menace is dealt with by keeping people out of the water (on the July 4th weekend–gasp!) and eventually by sending out a crew headed by the heroic sheriff to slay the beast which, in an explosive climax, he does.
So, a real estate investor has visited your neighborhood. What to do?
Before you shut down the beaches or call the sheriff, let us take a moment to explain to you what a real estate investor does. Before we do that, however, let’s first take a look at what’s happened to the real estate market in general since 2008.
Prior to that fateful year, the United States enjoyed a fairly steady and accessible market. Mortgages were available, homes were affordable and interest rates were reasonable. Life for potential homeowners was good. Great, even.
Turns out that mortgages were TOO available; too many were given out to those who ordinarily would not qualify, leading to the excessive defaults that resulted in the inevitable crash of the market in 2008. These mortgages, referred to as subprime mortgages, began to affect the housing market TWO YEARS before the collapse. The defaults on these mortgages led to a massive amount of foreclosures. By 2009-2010, nearly 3 million homes in the U.S. were in foreclosure! Compare this to the 717,000 foreclosures in 2006.
So how did that affect the homeowners who were able to ride out the collapse of the real estate market and the overall economic downturn of this period? Whose jobs were unaffected and who were able to continue paying their mortgages and fulfill their obligations during this unprecedented time?
In nice neighborhoods across the country, homes were abandoned. These neglected properties would become targets of break-ins and vandalism. Lawns overgrew. Eventually, the value of these homes dropped. Homes that were sold were offered and purchased at much less than they were worth, or what was owed on them. This directly impacted the value of other homes in the area.
This was the scene into which real estate investors entered.
First and foremost, our job at M5 Investments is to help. Help homeowners who might find themselves in less than ideal situations (job loss, divorce, etc.). Help to provide the minor repairs and renovations that some homes need before they are marketable. Help increase the value of homes. Help close sales.
But they’re just in it for the money, some might think, and sure, any business is in business to make a profit. However, it’s not that easy. The investing part comes in when money is spent on those repairs and renovations, and it’s hoped that what is put into a house comes back once it’s sold. Sometimes it does, sometimes it doesn’t. Not quite.
Remember, though, that the first goal is to raise values. Making a profit comes somewhere down the line.
Albert Einstein once said, “Try not to become a person of success, but rather try to become a person of value.” At M5 Investments, we truly believe that value comes first. Success may or may not follow, but we’ve provided what we feel is a community service.
To that end, we align ourselves with organizations that hold the same values and goals. For instance, we are members of the Triad Real Estate Investors Association (REIA). REIA is a community-minded organization that supports many humanitarian efforts. Among the ways in which REIA has contributed include:
In addition to working with these types of organizations, M5 Investments conducts its business in an honest and professional manner. We have an A+ rating with the Better Business Bureau! We also bring over 20 years of experience investing in local real estate. We’ve brought value to many neighborhoods in the Triad area and will continue to bring our integrity, our knowledge, and our high standards to every endeavor.
So, the next time a real estate investor enters your neighborhood don’t expect bad things to happen.
They’re only there to help.