By R. Donahue Peebles
RISMEDIA, April 24, 2007-With a volatile stock market and housing prices on the decline, many investors are looking to take advantage of the real estate down market-and Realtors can too. Although, as real estate pros know, real estate is the greatest wealth creator, knowing what, when and how to buy can scare off even the most seasoned professionals. Here are some tips for industry pros as a refresher or you can pass them along to your clients with your local advice, on how to successfully master today's changing real estate market
1. Make your money going-in when you buy (vs. sell).
The time to gain is on the front-end when you buy. Go against herd, play contrary to market. Buy something of extraordinary value when no one else wants it. Sell when fewer people are selling and buy when fewer are buying.
2. Being lucky means being ready.
In falling markets people need to sell more quickly, which means buyers can get a discount on the true market value. Buyers might consider taking out an equity line on their own home so they'll have easy access to cash and can quickly act on the best deals.
3. Buy quality.
When it comes to deals in the overcrowded condo market – look to buy in the projects that were built first during the recent boom. They are usually in the best locations vs. projects that were built later after the popularity of the first projects took off.
4. Don't be scared off by problems – these can often be the best opportunities for you. Market confusion is an ally – don't despair when problems arise in a real estate deal – often they present great financial opportunity. For example, if you took out a sub-prime mortgage and now are having a difficult time meeting the payment – re-negotiate the terms with your lender. They don't want to take back the property anymore than you want to foreclose.
5. Invest. Don't speculate.
Investing means you can rent it out vs. holding on to it just to hope it goes up. A good investment is one that you can rent out quickly to cover your mortgage and expenses – your short-term earnings, then sell when the market is right for significant capital gain. (You can't rent out or live in your bonds.)
6. Start with what you know.
For most people, residential properties are easier to understand, purchase and rent out. Start in your area – where you can be close to your investment. When the real estate market stabilizes, you can look to sell for a significant profit.
7. Don't be afraid to make a low-ball offer.
In a slow market, low-ball is better than no ball. This will help get the ball rolling and help you begin to create value and wealth for yourself through real estate.
R. Donahue Peebles is a real estate mogul with $4 billion in current properties and projects under development. He is also the author of The Peebles Principles, Tales and Tactics from an Entrepreneur's Life of Winning Deals, Succeeding in Business, and Creating a Fortune from Scratch (Wiley and Sons).
To learn more about Peebles or to order a copy of his book, e-mail meryl@mediamuscle.com.
