About this time last week, news began to surface about Bear Stearn's woes and the fact it looked like someone would literally need to bail them out. JP MorganChase did.
This of course is bad. But, how much of this is B.S.'s fault? It'll be interesting to see the stories that emerge. Embattled CEOs and CFOs, lies, cheating, stealing. Gee, sounds like another Enron? Another WorldCom?
Then, the Fed dropped rates 3/4%.
Where does that leave us Real Estate Investors?
Good Question.
I'm pretty sure, even in markets that are quickest to react like California, Arizona and Nevada, we've got a ways to go before a "bottom" is reached.
This shouldn't scare us. Why?
If you're following the rules, when you BUY is when you make your money. You get paid when you sell (unless you're lease optioning the property as an exit strategy and you'll get some now and some later of course).
So if you're buying a property with a $100k first and an $80k second, and you're wiping off the 2nd for $1k and you choose to bring the 1st current if it's a good loan and you can sell the home on an AITD or other situation, what's ugly about that? Why would you STOP investing?
I've noticed a lot of investors pulling back. Frankly, that's unfortunate. The best deals are still out there and there's another 12 to 18 months of them to go, unlike what most experts originally thought that there'd only be 12 to 18 months of a run like this and now, we're 12 months+ into it already.
Get back to basics. Get some training. Get to events where the guys are in the trenches everyday so you can stay up-to-date on how the loss mitigators are handling cases.
For you commercial investors out there, just know that any properties you are developing, you better be prepared to have a financing and money plan in place that will help you hold tight for 24 to 36 months until things pick up again.
We looked at a gorgeous 27 acre property last week here in Oregon, but, problem is, even in a nice market like that, we're 36 months from IT taking off and being able to absorb our project, not to mention some of the serious issues to be dealt with like moving a few roads and blasting through a lot of rock to do it. With a Seller that's not in a position to wait to be cashed out, it's not a deal for us.
Anyway, now more than ever, thinking through each deal is critical. That doesn't mean there aren't deals out there, it means the SMART investors will make the most money. You've got to play the game to win.
So don't sulk. There's money out there (Visa proved it - $18 Billion) and there's always going to be losers that lie cheat and steal. Now's the time to make hay while this type of "sun" is shining.
Now, Go make an Offer(TM)!
~Jerry
No comments:
Post a Comment