lack of suitable properties

[Bob Shome]

Are others finding it harder to find good properties right now? In my area it seems to be the case. I try to find purchase in the 50-60% of improved value range, putting in 20% and making 30-40%. I am doing most of the work on these places. The current market seems to be buying these places at 80% leaving no room to improve and sell. The ultimate sales price hasn't moved up.

My two properties this year have been home runs so maybe I am just spoiled! I think that I am now competing against a lot of others trying to get into this business. The supply of homes in foreclosure in the area is way down which is part of the problem. Anyone else seeing this kind of trend?

[Jason S.]

Seems to me that we are in some type of "bubble" without underlying indicators justifying the market tightness. You may be happy in a few months that you are not just finishing a re-hab using today's numbers.

This and there are billion dollar hedge funds buying up all the rentals right now.

Oh and with a risk free rate of return under 1% traditional expectations of risk / reward may need to be adjusted. The typical investor rules are fantastic with regard to risk (markets can move fast) but they do not have an adjustment factor for historically low rates. What to do?

Just a few thoughts.