As retirement savings, 401ks, IRAs and stock portfolios have come crashing down along with home values, fear has spread throughout a large segment of the population. The fear is easy to understand. People feel that they have no control over what is happening, which is for the most part true. What isn’t true is that you can’t do anything about it. In times of great difficulty, there are always multiple opportunities for those who can recognize it. Real estate is cyclical and always has been. At the peak of the market around the middle of 2005 here in California, housing was highly over-valued. At present time it is highly under-valued. It is like a pendulum, always swinging from one side to the other seeking equilibrium. Any market in which money is made has inefficiencies whether it be real estate or the stock market. In either market to be successful an education is necessary. Being successful entails knowing how the cycle works and most critically, knowing where in the cycle you are. It also entails action. Hindsight is always 20/20. Knowing exactly where the top or the bottom of the market is impossible since the only way you know it is when it has already happened. These turning points may take a while to happen but when they do, they are relatively quick and as people realize it, everyone gets on the bandwagon. For instance waiting for the absolute top of the market to sell is risky, because as everyone else realizes this they put their homes on the market and flood the market. We all know any market is created by supply and demand. Likewise waiting for the bottom can result in missing the boat. On either end it’s like a feeding frenzy but on opposite sides; or ‘froth’ (at the top) as Greenspan coined it. At the top and the bottom many are caught either late or early to the ‘party’. Astute investors always sell before the top and also before the bottom. They are first in the market and also first out of the market. It takes alot of experience and focus to accomplish this. As Warren Buffet said (I think), when everyone is greedy it’s time to be fearful, and when everyone is fearful it’s time to be greedy. At this point fear and panic have generally taken over. Coincidently smart investors are backing the truck up and buying as much as they can get their hands on! To my point…. What are you waiting for? This has been the ‘perfect storm’. Very few people including myself ever thought the market was going to fall so far. Value will not stay this low for very long. Investors are buying properties that are half the cost of what they can be built for, and sometimes for 33% of what they sold for at the top of the market. Rental properties are now cashflowing like crazy, with values poised to climb and regain their true equilibrium. Don’t have money? Do you have an IRA? Use your IRA to buy real estate-we can show you how. If you have money in stocks and CDs, you know how they are doing if you are still even looking at your statements! 3-5 years from now there are going to be alot of new millionaires: those who take advantage of this opportunity. For those of you who don’t have the experience or the desire to be landlords we’ll partner with you to take advantage of this opportunity. Your returns will be truly amazing! For all the clouds around us, there is a silver lining. For those of you who have lost their homes, there is still opportunity for you in the form of ‘rent-to-own’ and lease-options. Just be careful about who you deal with, and realize that some of the landlords will be betting that you don’t or can’t exercise your option, and will be keeping your option money! That’s it for now! Successful investing!!!
Tags: buy real estate with my ira, FHA loans, first time homebuyer, retirement plans
