Ever since we began talking about the "green edition" of our magazine, my son has been urging us to become a "greener" family. Considering he is in the third grade, this is an impressive and reasonable request.
We have taken up the greener lifestyle and I must say that it suits me well. One of my favorite green things to do is to contribute to our compost pile in the backyard. Last night as I was contributing the latest kitchen scraps to the pile I noticed that the pile was "cooking." Yep, it was about 132 degrees. HOT! or as they say in compost terminology, it was "cooking!"
That got me to thinking that the real estate industry is not so different; especially real estate investing. There are a lot of "scraps" left on the market right now and it is up to the real estate investment community to make things good again. Well, these are the properties that nobody can afford, or that need fixing up, or are just sitting around on the market. This is not good for a stumbling economy. What we need to do is to turn this "refuse" into fertile soil that we will allow us to rebuild the garden of our industry.
With my compost pile out back, I have been contributing for months, putting my lawn clippings in there along with kitchen scraps, and finally last night it began to cook. The same thing is going to happen in our real estate community. We just have to keep the faith and keep practicing fundamentally good transactions. In that way, we will be contributing to the come back of our industry.
The real estate investment community will inevitably begin heating up again, or "cooking" very slowly, but then it will turn into the hot market that it was and give off returns that will help spur the economy as well. These times that we are facing are only temporary and while we may not see it on a daily basis, the universe is already at work putting together the elements to the next great real estate boom.
Hang in there and take the good with the bad. Real estate investing is cyclical, just like any other natural occurrence.
Think of http://www.LocalRealEstateDeals.com like your real estate compost pile, throw in your deal listings and look for new ones. Together we will turn the tide around.
Rob
Showing posts with label real estate investing. Show all posts
Showing posts with label real estate investing. Show all posts
Thursday, July 23, 2009
Wednesday, June 24, 2009
Creativity in a Free Market
There is a buzz going around about the latest bill that is threatening the way that real estate investors do business. It is sometimes scary that those who are making the laws are out of touch with the reality of the businesses that they effect through their system of government.
Fortunately, we know better. We know that they are not addressing the real problem, but rather they are putting hand cuffs on the wrong people. We have the luxury of operating from the spirit of abundance rather than the spirit of scarcity from which the laws were created.
We need to trust that we will collectively find better and newer ways to conduct business. These laws that have been and will continue to be passed are meant to help, not to hinder. So, they are created in the right spirit, but the letter of the law is not going to be effective. It will, no doubt, keep a few people from conducting real estate transactions and most of those people are the ones that should not be investing in the first place. It is also true that there are some good investors with good intentions that will also find it hard to keep investing. Unfortunately that happens as well.
By and large, the best thing we can do as a real estate investment community is to follow sound business and ethics practices in everything we do. The real estate industry has a black eye right now, and we are all going to pay a little bit of the price. Let's do the right thing and create win-win solutions in every transaction...that is the best way to counter the laws that are coming to us right now.
Good Luck and God Bless America!
Robert D. Cass
http://www.LocalRealEstateDeals.com
Fortunately, we know better. We know that they are not addressing the real problem, but rather they are putting hand cuffs on the wrong people. We have the luxury of operating from the spirit of abundance rather than the spirit of scarcity from which the laws were created.
We need to trust that we will collectively find better and newer ways to conduct business. These laws that have been and will continue to be passed are meant to help, not to hinder. So, they are created in the right spirit, but the letter of the law is not going to be effective. It will, no doubt, keep a few people from conducting real estate transactions and most of those people are the ones that should not be investing in the first place. It is also true that there are some good investors with good intentions that will also find it hard to keep investing. Unfortunately that happens as well.
By and large, the best thing we can do as a real estate investment community is to follow sound business and ethics practices in everything we do. The real estate industry has a black eye right now, and we are all going to pay a little bit of the price. Let's do the right thing and create win-win solutions in every transaction...that is the best way to counter the laws that are coming to us right now.
Good Luck and God Bless America!
Robert D. Cass
http://www.LocalRealEstateDeals.com
Tuesday, May 5, 2009
Bubbles
History repeats itself. We have heard it before and we are hearing it again. While there are many differences between the dot com bubble of a decade ago, there are as many similarities to the housing bubble that just burst.
Among other things, a good deal is a good deal in any market. What do I mean by that? Well, if you are using the right metrics and buying at the right price, then you are going to make money, whether you are buying stocks or buying real estate. In both of the bubble cases that we are talking about today, emotions not real value, is what drove the market to its inevitable collapse.
What bothers me most is that is just went through a ridiculous bubble 10 years ago...10 short years ago. Everyone was caught up in the frenzy of making millions or getting their share that not many people sat back and figured out that things were going awry. It takes self discipline and a deep sense of self. You have to know yourself. You have to be confident that you can take your profits and be happy with them. You have to be willing to leave some money on the table. You can't second guess yourself once you have made a deal. You can't have your head on a swivel looking for your next deal before the first one is complete. You have to have a plan...and you have to stick to the plan.
We can't afford to go through this again as a nation. We are killing ourselves, our credit, our credibility as a nation of borrowers. We have to be smarter next time...if we can all learn from our mistakes then this is real estate downturn could be one of the best things that ever happened to us. Sadly, many people won't learn from their mistakes and the same mistakes will be made again in another 10 years. But for those who have learned their lessons and keep growing as investors and real estate professionals, this is an incredible lesson that will help you amass a fortune. Just make sure you recognize the signs of a bubble. Maybe that is something that we will talk about in a later blog.
The last bit of advice is to do the opposite of what the masses are doing. Actually, RUN in the opposite direction that the masses are running.
Good Luck and Happy Investing!
Rob
Among other things, a good deal is a good deal in any market. What do I mean by that? Well, if you are using the right metrics and buying at the right price, then you are going to make money, whether you are buying stocks or buying real estate. In both of the bubble cases that we are talking about today, emotions not real value, is what drove the market to its inevitable collapse.
What bothers me most is that is just went through a ridiculous bubble 10 years ago...10 short years ago. Everyone was caught up in the frenzy of making millions or getting their share that not many people sat back and figured out that things were going awry. It takes self discipline and a deep sense of self. You have to know yourself. You have to be confident that you can take your profits and be happy with them. You have to be willing to leave some money on the table. You can't second guess yourself once you have made a deal. You can't have your head on a swivel looking for your next deal before the first one is complete. You have to have a plan...and you have to stick to the plan.
We can't afford to go through this again as a nation. We are killing ourselves, our credit, our credibility as a nation of borrowers. We have to be smarter next time...if we can all learn from our mistakes then this is real estate downturn could be one of the best things that ever happened to us. Sadly, many people won't learn from their mistakes and the same mistakes will be made again in another 10 years. But for those who have learned their lessons and keep growing as investors and real estate professionals, this is an incredible lesson that will help you amass a fortune. Just make sure you recognize the signs of a bubble. Maybe that is something that we will talk about in a later blog.
The last bit of advice is to do the opposite of what the masses are doing. Actually, RUN in the opposite direction that the masses are running.
Good Luck and Happy Investing!
Rob
Wednesday, April 22, 2009
Leverage
Now would be a good time to talk about leverage. You know, that term that everyone has talked about for so long. It is easy to talk about leverage when everyone is doing well in the market. It is actually a joy to talk about how much leverage you have in the market and how well you have positioned yourself.
But we are just getting to the point where we are seeing a few people out there that understand what true leverage is and what the correct ratios are. For those few out there that have been through this sort of downturn in the market and actually learned from it, this is an awesome time to be a real estate investor.
Consider that if you knew where to look and what indicators to keep an eye out for, you could have seen this coming a mile away. For anyone who has a surplus of cash and is not hemorrhaging right now, it is a buyers market like nothing we have seen in 80 years. I have been saying that THIS is the real opportunity, not the past 8-10 years. This is going to go on for a while too, so don't fret. The key is to understand what your ratios are and to understand the meaning behind the numbers.
One of the worst things we can do as investors is to let the banks tell us what is acceptable and what is not acceptable. Dive into your numbers and look at the big picture, you can still be conservative and make a killing. Too many of us (yes, I have been caught up in it as well) were overly aggressive and we are lucky if we learn from our mistakes.
If we are smart, we can learn and grow our portfolios much larger than before the market toppled. The key is that we have to be disciplined enough to conduct our own debrief analysis to figure out where we went wrong and put personal investing policies in place that we actually adhere to. Discipline, discipline, discipline.
Then focus on gaining leverage. Because if this ever happens again, you will definitely want to be ready for it. Shame on all of us if we let this happen again and worse, if we are not leveraged properly!
Robert D. Cass
But we are just getting to the point where we are seeing a few people out there that understand what true leverage is and what the correct ratios are. For those few out there that have been through this sort of downturn in the market and actually learned from it, this is an awesome time to be a real estate investor.
Consider that if you knew where to look and what indicators to keep an eye out for, you could have seen this coming a mile away. For anyone who has a surplus of cash and is not hemorrhaging right now, it is a buyers market like nothing we have seen in 80 years. I have been saying that THIS is the real opportunity, not the past 8-10 years. This is going to go on for a while too, so don't fret. The key is to understand what your ratios are and to understand the meaning behind the numbers.
One of the worst things we can do as investors is to let the banks tell us what is acceptable and what is not acceptable. Dive into your numbers and look at the big picture, you can still be conservative and make a killing. Too many of us (yes, I have been caught up in it as well) were overly aggressive and we are lucky if we learn from our mistakes.
If we are smart, we can learn and grow our portfolios much larger than before the market toppled. The key is that we have to be disciplined enough to conduct our own debrief analysis to figure out where we went wrong and put personal investing policies in place that we actually adhere to. Discipline, discipline, discipline.
Then focus on gaining leverage. Because if this ever happens again, you will definitely want to be ready for it. Shame on all of us if we let this happen again and worse, if we are not leveraged properly!
Robert D. Cass
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