By Alan Brymer
You might think I’m off my rocker for suggesting that a housing boom can actually work against you, but it has happened to many, many investors, including myself. Let me share with you two observations I’ve made after going through a housing boom into a housing collapse.
#1: A housing boom can keep you from learning to negotiate. Think about it. When property values are going up thousands of dollars per month, you could actually buy a house for full market value and resell it later for a profit. You could buy just about any house on the market without picking and choosing, or offering less than asking price.
Conditions like these only last a short while and are no way to run a portfolio in the long run. What will happen when home stop going up in value? You won’t have any negotiating skills, which take time to develop and cultivate, and you will either waste time learning, continue offering way too much and getting into trouble, or not making any offers at all.
#2: A housing boom can make you focus on short-term profits I remember when any investor with a pulse could get a loan to buy a rental property, often with no down payment and 100% financing. Or, people would get short-term financing with ridiculously high payments, because they intended to (and could) sell the house for a profit in a few months.
So guess what happens when financing gets harder to come by? Your whole operation will get shut down. Or, you might buy several properties with short-term, expensive financing, but not be able to sell them OR rent them out, and then you’re stuck.
#3: A housing boom makes you too lazy to find private money. In my opinion, the key to success is to build relationships with private lenders constantly, so that you can always borrow money on easy terms no matter what your exit strategy.
So while a housing boom is great in regards to your houses’ equity increasing, the side effects are the 3 temptations I’ve listed above. I recommend negotiating well and finding private lenders regardless of your market conditions.
Click Here:StinkyMarketReport.net In this FREE digital book, learn the secrets that a $100,000,000 real estate investor has discovered about making money in a slow market, by understanding how market cycles REALLY work. Or, for info on Alan Brymer, go to www.AlanBrymer.com
Related Websites -
Sarasota Real Estate - How To SAVE $32,340 Selling Your Own House...Without A "High-Priced" Realtor! Sarasota Real Estate agent Mike Payne shows house sellers HOW to sell their own house - without a realtor - and save $32,340 in real estate commission. Who doesn't want to save money today? No doubt, $32,340 is A LOT of money...and a BIG commission to pay real estate agents...... -
Real Estate Investments - Good Idea or Bad Idea? Right now, if there was a market that had bad news written all over it, it would be real estate. The housing crisis has made investors jumpy, the economy appears to be tanking and home values are plummeting across the country. Would you believe that this is actually a good...... - Review of Millionaire By Thirty Douglas Andrew’s book reads like a rejected first draft of Rich Dad, Poor Dad and right off the bat, it’s kitschy premise (ripped right from the above book) falls more than a little flat. In order to illustrate his points, the author relies on his sons and their imaginary......
- Real Estate Photography- Grow Business Earnings The photography which is done on Real Estate Development Company is known as real estate photography. The concept is very much popular in European and western countries/ companies. Because according to the real estate photography the market has to be established! Real estate photography is done in different ways......
-
Supplement to Weakon 231: What Went Wrong You'll probably want to read Weakon 231: How the Mortgage Industry Works (or Worked!) first. We stand here over a year after the sub-prime crises began. The sub-prime crises lead to the credit crunch, the credit crunch lead to slowed growth, slowed growth killed the stock market, the down......
You must log in to post a comment.