“I’ll wait until the bottom”

There’s going to be some GREAT opportunities over the next few years to buy properties at tremendous discount, and those who stand up, TAKE ACTION, and BUY NOW will get wealthy.  Those who sit on the sidelines, will not.

Some people are thinking they should wait it out until the market hits ROCK BOTTOM before taking action.  That may not be the best idea …

Remember when your favorite department store went out of business – what did advertise?  25% off.  You found lots of bargains. Then it was 50% off, and you still found a few good bargains, but not as many.  Finally, it was my wife’s favorite words, “FINAL CLEARANCE SALE 75% OFF” – then what’s left?  Members Only Jackets.  You waited too long and you missed out, right?

That’s what’s going on right now.  We’re at the point of the first round of clearance sales, and the window of opportunity is closing.  By the time the media says a particular market is hot, it’s generally a year too late.

It’s a Buyer’s Market… Why Aren’t You Buying?

People move like SHEEP when it comes to investing; they follow the pack like “SHEOPLE”.  When the market is hot, they follow people in.  When the market is soft, they follow people out.  Unfortunately, that’s exactly why 95% of Americans retire broke, and 5% of Americans retire wealthy. 

Ask the wealthy how they got that way and they’ll tell you – the majority of them by buying real estate, often in bad times, then holding on.  In 1988, you had to be an IDIOT to buy real estate in my city of Denver, CO.  However, I know a few idiots who bought 20 houses for $30,000 each in 1988 from HUD.   Residential vacancy rates at that time were close to 20% in those neighborhoods.  Now, the vacancy rates are 5%, and the properties are worth $180,000 – $200,000!  I wish I was one of those idiots, because I got into the Denver market in 1993 when things were coming back and it was a “seller’s market”.  I bought a sold nearly everything, made good cash flow, but wish I would have held more properties, because they doubled, some tripled by 2001. 

Since 2001, the real estate market in Denver has declined steadily, but prices are still MUCH higher than in 1993, and even higher than 1988.  What’s the point?  The time to BUY AND HOLD is when things are DOWN, not towards the top when the sheep are buying.  In my market, the sheep were buying up in 2000 – 2002, precisely when things were a SELLER’s market, and prices flattened, even dropped a bit since.

Even still, however, you can profit in ANY market once you learn what to do.  My new book, “Defensive Real Estate Investing“ gives you the tools to make money in ANY real estate market.  Don’t be a SHEOPLE.  Learn how to be a fiver-percenter.

“The Sky is Falling”, Says Chicken Little

So the sky is falling, is it?  This is the first time we’ve seen nominal prices fall in some 40 years, says the experts.  Well, not really… prices rise and fall in different parts of the Country, just not as a whole, lumped together.  It’s much worse in some parts, better in others.

WHO CARES?? Real estate is not like gold or the dollar where the prices are pretty much the same for it no matter where you buy it.  Real estate is LOCAL, and if you pay attention to that “market” thing, you’d pay attention to what’s going on in your city, or more importantly, in your eighborhood.  Even then, you can find below-market bargains in ANY market.  In other words, focus local, focus on DEALS.

More to come, Bubble-heads!

The Interest Rate Factor

So many people are still it out, waiting for the “bottom” before buying.  Big mistake.  The bottom is impossible to predict, and usually by the time the media reports the comeback, it’s about a year too late.

Certainly things may decline in a particular market, even yours.  But, financing at today’s low interest rates gives you an edge.  If you wait for prices to fall a little, you may get a bargain on price, but not on financing, as interest rates are likely to go up.

 Take, for example, a $250,000 loan at 7% vs. a $240,000 loan at 8%.  Over 30 years, the smaller loan will cost you about $40,000 more!  If you are looking at good, long-term deals, buying NOW with 30-year fixed rates may turn out to be the best retirement move you make in your lifetime.