The other day at church, one of my friends asked me how my business was doing in this down economy. She was a little shocked when I said it was doing great and, in fact, I was making tons of money in real estate right now.
The problem with the media is that when prices go down, they are all gloom and doom. Serious investors know that you make more money in a down market than in an up market. Two years ago, there were no good buys at all in Arizona. Now, there are hundreds of good buys. And, because people are not buying homes, they are renting and rents are going up.
The reason a lot of investors are in trouble is that they are not really investors – they are speculators. That is, they bet their entire farm on appreciation. Robert Kiyosaki, of Rich Dad fame, and I were talking about this yesterday. Good real estate investment requires 4 income streams: appreciation, cash flow, tax benefits and amortization of principal. Most of the “investors” who are in trouble did not follow this rule and relying solely on the appreciation. That is a very risky play and, quite frankly, they got what they deserved. (This is the reason I don't invest in raw land – all speculation – no other income.)
If you are not investing now, shame on you. This is the best time to invest in real estate since the early 1990's. Personally, I can't buy real estate fast enough right now.
Food for thought.
Warmest regards,
Tom
