“What do I look like to you? A moron? Don’t answer that… But seriously, my real estate investment properties are illiquid and have declined in value. You still say I should double down?” (Charlotte Real Estate Investor)
“Buy straw hats in the winter…” (Russell Sage, Wall Street Financier)
Buying (and selling) at the right time is the heart of many popular Wall Street mantras on how to become wealthy:
1. Buy low, sell high
2 Buy when you see blood in the streets
3 Buy when everyone else is selling. And vice-versa.
Of course, dummy! Everyone knows that. That’s not the hard part; the hard part is to know when that low time to buy is. If we only knew that, then this life would be so much easier. But is it really that difficult?
The people who have made great wealth in this country are like poker players. Poker is a game of waiting and then seizing the right opportunities when they present themselves. And when the opportunities come, good poker players bet heavily on them. It’s not complete luck; they know that certain hands have greater odds of winning.
Let’s look at 2 examples of billionaires “playing poker”:
1. Michael Bloomberg (Billionaire and current Mayor of New York City): After 9/11, the stock market tanked as investor fears abounded. I remember seeing the front page of the New York Post in the fall of 2001 where Mike urged his constituents to buy stocks after the Dow dropped below 7,000; he certainly was! He basically said that people ask him for investment advice all the time (because he’s a billionaire) and that was the best advice he could give them.
2. Warren Buffet (needs no introduction): Buffett experts will tell you that if took away Warren’s 20 biggest investment deals, his overall returns would be flat! He started his investment company in 1956; that’s a big deal every 3 years on average. That shows he does not have supernatural ability to pick stocks right all the time; rather he took really big bets (and was right) on a few great opportunities.
So how do you identify a great opportunity to invest in? Bloomberg will tell you that when the stock market is heavily discounted due to temporary events, you buy. The American stock market will recover, it always does. Buffett will tell you that if you see a good company’s stock trading at a steep discount, you buy. Good companies work through tough times and reward shareholders.
Can you think of anything else that is heavily discounted due to temporary events? Yes, this is when we get to the topic of real estate- good guess! The temporary events are the mortgage meltdown, banks not lending, and the rising unemployment rate. A lot of people need to sell and are ready to let great real estate go at bargain basement prices.
As Will Rogers famously said, “Buy land, they ain’t making any more of it.” So, if the stock market always will come back, it makes sense that real estate should rebound even more convincingly. Companies can always issue more stock, but great pieces of real estate can’t be replicated. And at these prices during the holidays, Wal-Mart has got nothing on the Multiple Listing Service this year!
So are you urging your clients to buy investment real estate? Are you buying any yourself? Buffett waits years so he can cherry pick an opportunity like this. Do you really think that the real estate market will continue to stay down?
It’s time to “Invest in Real Estate with the Stars” instead of waiting to buy it from the “Stars” when they sell!
Brett Furniss is the President & Owner of BDF Realty, “Charlotte’s Most Innovative Property Management & Investment Company” (www.BDFRealty.com and www.RentToSell.com). You can follow his Twitter thoughts on the Charlotte real estate market by clicking on http://twitter.com/bdfrealty. He is the author of the FREE E-Manual entitled “How to Rent-To-Sell Your Own Home” (http://www.renttosell.com/RTS-Book.html) which details how to get the most potential buyers to your home in this challenging real estate market.
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