Newer investors haven’t experienced a market down turn yet. Old timers such as I have learned through three, four or more. This article contains some of what I’ve learned:
Whether you are a newbie (less than 5 years) in the business, or you have over 35 years in it like me, we are all in the same business and entering the same downturn in the economy.
Being fully involved in successful real estate investing means that you must always have a pulse on everything related to the business. You do not have to know all the details; however, you have to always be listening, watching, and keeping in touch with economic happenings – including those not directly related to real estate so that you can sniff out the change beforehand.
When you watch what happens from a birds-eye view instead of viewing it from inside as it is happening, you learn what to expect (to some extent) what occurs through the cycle. This is not to say that your current portfolio, the methods that you practice, and the over-all downturn in the economy are not being affected, it’s the view from which you observe the happenings that matters.
Many financial indicators are finally beginning to show that the real estate market is turning south. Experienced investors have been able to point toward a precise three-month window where we expect the crap to hit the fan – and have known these dates for over a year in advance. We’ve been preparing by divesting and profit taking of most properties. We’ve been re-arranging financing on those we are planning on holding – especially residential rentals. We’ve been re-training our teams for the expected financial difficulties. And we are strategically planning to cash-in once again as the real estate market falls.
By following those who have done this several times in the past, you can look forward to these times when most people will be financially strained, losing their homes & businesses, and moving to a lifestyle of survival. You can expect to help these people with their property problems while helping yourself and your family to the financial gains that will come from these economically troubled times.
It is very difficult to predict how large or how long this next downturn will be. While wishing for the best, you must wisely prepare for the worst. There is a way to enjoy and grow during economically troubled times by helping those with property-related problems and then helping them set a smooth course forward.
In part 2 of this Article, I’ll share several specific steps to take as we ‘enter the fire.’