Bubble Schmubble, Real Estate Investing for Now and Forever
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The real estate world is still being bombarded with the luminous thought of the real estate bubble bursting or popping or whatever it's supposed to be doing. High priced markets and hot areas like Miami, Las Vegas and Phoenix have certainly seen a recent decline in pre-construction and condo flips but investors have not left town just yet and if they have let me know because I'll be there on the next flight.
New investors do not have to be afraid of the bubble hype; they simply need to understand that real estate investing is about strategy and education. The right strategy will push you though any bubble or market. You simply need to educate yourself on what strategy is going to work for you. One of the big factors you should always remember when investing is that you make your money when you buy, not when you sell. Taking a gamble on a hot new market and its appreciation is just that, a gamble.
If you buy a property at 30-50% below after repair value or fair market value today, your investment and return will only grow from there. You do not have to wait for the appreciation. It's already there. If the market grows in value, that's just a bonus. If you're a flipper and your worried about the potential bubble, then it's time to change up your strategy. Now may be its time to find a tenant buyer or renter. In these markets, the key is to have someone else paying down your mortgage while you are building equity and even earmarking some positive cash flow.
As the interest rate continues its climb up again more and more people are going to find themselves in trouble. Those who took advantage of the adjustable mortgage rate that was a deal a few years ago will soon be looking for a way out. Renters looking for their first home will now have to wait a little longer unless you are ready and able to help them.
I believe the so called bubble markets are soon going to be a virtual candy store for the savvy investor looking to take advantage of the worried investor or homeowner looking to dump their investment for something better.
Almost every late night real estate guru preaches the key to making money in real estate is finding a "motivated seller." In these markets people are going to find themselves more and more motivated as time goes by. Divorce, bankruptcy and death show no bias so be ready. If you want to stay in the investing game, stay on course, buy low and smart and rise above the bubble hype to stay educated on all the different ways to really make money in real estate investing and wealth building.
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