Housing Downturn May Signal A Good Buying Opportunity for Investors | If economist Dr. Christopher Thornberg is correct (as I suspect he is) huge opportunities lie ahead in the coming five years or so for real estate investors. "What?", you might say after watching the video clips from his lecture, "He's predicting a cooling of the market - an outright downturn - so what makes this such a good time to invest in real estate?"
Smart investors know that money is made during times of change and market flux. When things are flat, nobody makes money, but when things are changing, either running up or running down, that's when the money is made. Just like the past few years was a boom for sellers, the next few years are primed to be a boom for "buyers".
Did you know that the famous "Merchandise Mart" in Chicago (a huge and sprawling commercial complex on the Chicago River in downtown Chicago) was purchased by the Kennedy family (John F. Kennedy's father) in the 1930's for pennies on the dollar compared to what the building had cost to build just a few years earlier? That's a prime, if not extreme example of how money can be made in real estate during down times as well as up times. If people were doing it during the height of the great depression, then you can do it in today's much more favorable market conditions.
The key is to understand exactly what is going on and to devise an investment strategy appropriate for current conditions. Don't be a "one tool carpenter"! What do I mean? A one tool carpenter is the guy who uses a hammer no matter what the job calls for. Need to cut some wood - he hammers it! Need to drive a screw - this guy hammers it! That's all wrong - use a saw to cut wood and a screwdriver to drive screws. In the same way that a good carpenter has an assortment of tools designed to fit the job, A good real estate investor needs to have an assortment of investment techniques that match market conditions.
The techniques that would have made you money during the past five years are probably not the techniques that will make you money over the next five years. Take the time to study today's market conditions and learn what investing approach is best under today's circumstances. Rest assured, if you do your homework you will come to realize that there are huge opportunities out there for the smart real estate investor.
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