What Is the Bottom?
How to identify the bottom of the market -- I found this article so well-written that I did not wish to try to re-cap, so this is quoted from RISMedia Daily E-Mail News:
"The trick is identifying the bounce and when to buy a specific property. For me as an investor looking to maximize profits, the price of a specific property is at rock bottom when the return on investment is better if I buy the property than if I leave my money where it is. Compare the real estate rental income and positive cash flow to the other investment options we all have, i.e.: stocks, bonds, savings accounts, etc. As real estate prices come down, and consequently the mortgage payments and taxes come down, while at the same time the demand for rentals is growing, at some point the positive cash flow will make the investment irresistible. That is the bottom for an investor.
With the scenario I have just describe each individual property is a micro-market of its own. The only thing that matters is its return on investment. You must only consider how you will benefit from that specific property. You must ignore everybody else and their investments. What we see now in hind sight is that many people paid too much when they invested like the masses in a sellers market. Remember, for you to win somebody else has to lose. Because so many people are losing so much of their equity it makes your ability to win much easier in a buyers market like we are in right now.
In a stable market, real estate prices are not driven up by investors. Home owners should be the predominant driving force. When a renter sees that their rent is higher than what they would be paying if they were to buy a similar property the tenants tend to once again convert to homeowners. That is the bottom for tenants. We know not all tenant have what it takes (income, savings and credit) to secure the American Dream of homeownership consequently there will always be tenants and they will always need investors like us to provide them with a home.
It has been years since we have seen prices low enough that we could invest in nice properties in great locations that yield an attractive positive cash flow. I got tired of hearing, “I remember when I could” or “I should have bought them all when I had the chance”. Now you can. You have a second chance. It may be your last chance. Take advantage of it."
About the author: Rick Harper grew up in the real estate business. He is a multi-million dollar real estate investor, and invests in commercial, residential and land. He has developed a strategy to acquire real estate with financing and then get it paid off to enjoy the pure cash flow. He is a broker, national speaker and investment consultant.
"The trick is identifying the bounce and when to buy a specific property. For me as an investor looking to maximize profits, the price of a specific property is at rock bottom when the return on investment is better if I buy the property than if I leave my money where it is. Compare the real estate rental income and positive cash flow to the other investment options we all have, i.e.: stocks, bonds, savings accounts, etc. As real estate prices come down, and consequently the mortgage payments and taxes come down, while at the same time the demand for rentals is growing, at some point the positive cash flow will make the investment irresistible. That is the bottom for an investor.
With the scenario I have just describe each individual property is a micro-market of its own. The only thing that matters is its return on investment. You must only consider how you will benefit from that specific property. You must ignore everybody else and their investments. What we see now in hind sight is that many people paid too much when they invested like the masses in a sellers market. Remember, for you to win somebody else has to lose. Because so many people are losing so much of their equity it makes your ability to win much easier in a buyers market like we are in right now.
In a stable market, real estate prices are not driven up by investors. Home owners should be the predominant driving force. When a renter sees that their rent is higher than what they would be paying if they were to buy a similar property the tenants tend to once again convert to homeowners. That is the bottom for tenants. We know not all tenant have what it takes (income, savings and credit) to secure the American Dream of homeownership consequently there will always be tenants and they will always need investors like us to provide them with a home.
It has been years since we have seen prices low enough that we could invest in nice properties in great locations that yield an attractive positive cash flow. I got tired of hearing, “I remember when I could” or “I should have bought them all when I had the chance”. Now you can. You have a second chance. It may be your last chance. Take advantage of it."
About the author: Rick Harper grew up in the real estate business. He is a multi-million dollar real estate investor, and invests in commercial, residential and land. He has developed a strategy to acquire real estate with financing and then get it paid off to enjoy the pure cash flow. He is a broker, national speaker and investment consultant.
Labels: real estate investing
posted by Barbara Gaines at 7:19 AM
0 Comments:
Post a Comment
<< Home