RCBill 14 Report post Posted October 29, 2006 The market is getting ripe for buying. Investors get in the neighborhood of 4.5 times market appreciation. If you want to be a part of the next up cycle, now is the time to count your marbles. Share this post Link to post Share on other sites
PressurePros 249 Report post Posted October 29, 2006 Bill what would you say is a time line for investing? I think it is very hard to find undervalued RE right now unless you are talking about HUD foreclosures that need major construction. I would advise steering clear of RE investment for the time being to let the market soften. There are still areas on the climb. I think in 5-6 years you will see many people buckle under ARM's and IO loans as rates rise a bit. So many people are over-leveraged I have a feeling that their will be a flood of upper tier housing hitting the market as buyers realize they bought too much house for their income level. I believe in the theory that the RE market is driven top down. When those higher priced homes start flooding the market and prices come down and/or interest rates decline people start the whole upgrade procedure and the next boom bubble begins. Share this post Link to post Share on other sites
Paul Kassander 26 Report post Posted October 29, 2006 I agree with Ken, that assessment sounds right. Share this post Link to post Share on other sites
RCBill 14 Report post Posted October 29, 2006 Within each geographical market are a number of other markets defined by price, use, etc. So, even within a city, high-end homes could be in one phase of movement while entry homes are in another. It is incorrect to generalize. Full-time RE agents with good firms will know what is going on. And their information will be current. If you don't know an agent, you need to get out of the house more. It is my experience, and I've read something somewhere that cycles are 'in general' a couple years down, then maybe six years appreciating. While this down cycle is getting press now, here in Wilmington the market for high-end got soft quickly last late fall, lower-end slowing this summer. All the agents that were buying Beamers two years ago are looking for employment now. I certainly agree that there will be nice opportunities provided by those that used creative financing. I buy and hold low-end and put renters in. (Not that I have a big portfolio.) So, if I get in a little early I don't sweat it. Furthermore! I was pushed into my first investment. Owning RE was not in my paradigm. I was thinking of younger people just getting started when I made the post. My thinking was that someone who was like me in my twenties may need some time to chew on this idea. Then maybe some time to get financing, then find a good investment. This could be six months or a year or even more. I think that the market that I'll be shopping in will be close to the bottom in the Spring. If it drifts a little lower, I don't care. The outfit my wife works at believes this market will pick up again in 08. They are a billion dollar producer. ***** I am familiar with several types of RE investing. I buy and hold entry level homes and rent them to people. I don't flip, snip, or creative anything. Some of you are doing pretty well with your businesses. If you are smart with your money, you could be doing pretty good with your investments in twenty years. And you don't need to be real savy either. Common sense and a little reading will give you all the know-how you need. Keys; Spend less than you make so that you can invest. Pay yourself first. Use other people's money. Compounding is a beautiful thing. This post is in honor of Richard Kaller who gave me similar advice and changed my life, RIP. Share this post Link to post Share on other sites
