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Posted at 01:16 PM ET, 01/06/2012

Are investors back?

Israel is president of Buyer’s Edge, a Bethesda-based real estate firm that represents buyers.

Get ready for big changes — and bigger competition as real estate investors are showing up in force for the first time since 2005. Many investors have been sitting on cash for years after selling off their portfolios as the market skyrocketed from 2004 to 2007.

They anticipated trouble, took their profits and have since been waiting for the stars to align again for good buying opportunities. And now they’re hitting the jackpot — finding high rents and low prices in parts of our area that have been beaten up by foreclosures and short sales.

My firm has been deluged by savvy investors looking for agents who understand how to help them find the great income producing properties.

Research is key for investors, as they look at the current and future cash flows from properties and their ability to get in and out of properties that are purchased as flips vs. income producers that they will hold. Dissecting data on neighborhoods and trends is part and parcel of the business of real estate investing. Utilizing cash and leverage (financing) correctly is the path to success.

Close in areas around Metro stations, which saw some downturn as a result of short sales and foreclosures, should be particularly active. We are seeing increased investor activity in Wheaton, Glenmont, 16th Street Heights and Cheverly.

If this sounds daunting, just keep in mind that the investors are back for good reason. They are sensitive to the big swings in the market and are a terrific barometer of where things are headed. It may make buying a bit tougher if one has to compete directly with a cash player, but home buyers can learn a lot by following the path of doing good research and understanding the marketplace.

Are you a real estate or neighborhood blogger who would like to contribute to Where We Live? E-mail us at realestate@washpost.com.

By Stephen Israel  |  01:16 PM ET, 01/06/2012

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