Real estate investing in 2009 and beyond – Part 1 of 4

In 1994 consumers were still trying to make sense of the economic impact of the 1980s, but the pain was beginning to subside. By 1995 and 1996, a new set of upwardly mobile families began to enter the market and slowly but surely we edged our way back toward real estate speculation in the US. ”Back”, you say? Of course, there’s nothing new under the sun. Take a glance at the end of the 1980’s and 1970’s and you will find the exact same pattern of timidity to insanity.

In this latest run, the financial institutions just joined the fray, and increased the destruction visible in the aftermath. The nature of humankind, to be greedy. has not changed since Babylonian times. And, believe it or not, this near catastrophic experience in our financial markets, is unlikely to turn the hearts or minds of many people. The reality is, I expect us to see at least one more run up in prices within my working life time.

So what should we do? Refuse to participate in foolishness – Not everyone lost money in any of the previous downturns. Some were wise, waiting for the bottom, buying when all others around them were selling. Then waiting patiently for the insanity to hit again, as they enjoyed positive cash-flow from renting out the properties which they had purchased for cents on the dollar, they finally sold before the “historically likely – new high” hit. Then just a little more patience to wait for the insanity to pass and another buying opportunity appears.

So here it is plain and simple, “Now is the time for the sane to slowly, gently slip into a manageable number of residential properties.”

No – Don’t run out to buy properties today. Patience is the key. The make up of our country is changing, our market is never going to be the same, and many “would be investors” are making incredibly bad buying decisions today. Real estate doesn’t happen in a vacuum, it is a responsive vertical. You have to think it all the way through. That said, those who are serial money makers are entering the local markets that make sense.

The remaining posts in this series will cover:

1. Part 2 – Evaluation points for my local market – Sterling, VA – right down to the neighborhoods that make sense, and the types of homes you may want to consider (you will still need to figure-out the specifics of  a given property’s viability).
2. Part 3, we will explore the strategies for acquiring property, with a pre-determined “exit price”, as well as some options for retiring your portfolio without suffering unnecessary loss.
3. Part 4, how to ensure aligning the goals of your tenants for on-time rent payment, and maintenance of the property.

It is my hope that by following this series, you will be set free from concerns about leaving the herd of sellers out there, and feel equipped as a wise residential real estate investor, regardless of, if you ever choose to use the information.

Insanity disclaimers:

• Talk to me or talk to someone else, but <strong>please don’t try to execute this type of plan without some expert help</strong>. This is not like buying and/or selling a home – It is much more complex and requires significant planning to complete the entire cycle successfully.
• “Sloppy” is expensive – Every geography, and every property, is different, so stay confidently cautious and do your home work.
• This is not a plan for world domination, nor will it make you “get rich quick”! This is a slow, steady approach, to building wealth in real estate.

See you for part 2.