Real Estate Investors Need Stability in the Housing Markets
I’ve got something to confess….. You’ve not seen me around as of late because I’ve been busy. Doing what your ask? Investing in the future -that’s what! Despite the oppressive rhetoric & rules our misguided politicians dish out, the over-bearing paperwork & regulations needed to keep our government at bay (both locally, State, and Federal), and the great uncertainty in our American economic engine, I am investing in the future. What is my #1 investment? Real Estate.
Those close to me may have guessed that our new internet business would of been the first choice. Maybe in time -as we build up scalable systems; however, it is real estate that is hitting up on a number of my positive economic indicators. While most are filled with doom & gloom, demand for good quality housing both at the rental investment level & rehab-to-retail level is there. No you say! That’s fine you just keep telling yourself that.
I’ve not been this excited since the last full year of our ‘go-go days’ (2007) in Charlotte, NC. Why -you ask, again? We are at the beginning stages of Stability in our housing markets. That doesn’t mean that we might not drop another 5-10% in valuations over the next year. In fact if you have to sell an investment property, the probability of pain can be great -unless you truly do know how to buy at a wholesale discount. Remember Warren Buffet’s quote “Only when the tide goes out do you discover who’s been swimming naked.” The truth is that there is a lot more to buying at discount then saying “It’s half the price as it was 3 years ago.”
As real estate investors, all we need is stability in our real estate markets. From there we can analyze with more certainty of the time it would take to sell one’s real estate. When we can calculate that (with great certainty), we can calculate a reasonable market value given a reasonable time to sell. From there, we can calculate a true wholesale value reflecting any cost of funds & repairs. Yes, we can all agree there are a lot of strong currents going this way & that; however, crawl out of your comfort zone (of doing the same old pattern you’ve always done) and analyze your local housing market. There are pockets of real estate investing that are working. We’re seeing rehab-to-retail, rentals, and the beginning stages of wholesaling work in our local real estate markets. When wholesaling works, that is a sign of stability as it is a free-flow function of supply & demand of investor flexibility & beliefs. And no, I’m not talking about the ‘sitting in your underwear day-trading real estate in another state fluff’…. I’m talking real-deals transacting at the local level.
That’s it. I’m putting a majority of my new investments into real estate with an eye towards market distortion wholesale opportunities. Identifying opportunities is another article (if not more) in itself. Be prudent. Be realistic. Grow slow -but don’t turn your back to an investment that provides one of the most basic needs of our day-to-day living. Invest in that which everyone is running (scared) from -Real Estate.