Sunday, June 22, 2008


I'm a real estate investor. While I don't claim to be the foremost expert in real estate investing, I also don't sell investing kits or work shops. I simply have gained what I believe to be some useful knowledge in real estate investing.

One of the best lessons I ever received was at a free workshop in Portland, OR presented by Marshall Reddick. He asked a question that really hit home with me. The question was: "Where would you be today if you had never sold a single property you ever bought?"

When I thought that through, I realized that my net worth would be in the millions of dollars more than it was, and I was only an occasional investor. I have since been striving to "Buy and Hold" more than anything else. The key is knowing when to buy, what to buy, and where to buy.

Something that is occurring right now that really amazes me is that many people are afraid to invest in this volatile market, yet it is the perfect time to invest. This is truly a buyers market and "deals" (opportunities) are everywhere! I've found bank owned properties being sold individually at as low as 30% of value. I have purchased brand new construction that cash flows with 90% to 95% financing, and has gained 15% in value over the last year. That translates into about a 125% to 190% return on my cash investment in the first year. These bargains are plentiful because many people can no longer qualify for financing or they're afraid that values will continue to decline. If you need to finance your property, you may be able to wait the market out and find a better buy later, but you might also pay a higher interest rate. Even if you're paying cash, if you try to wait for the perfect time to get the best deal, it might just pass you buy. If you could buy Microsoft stock for $15 per share right now, would you risk waiting it out to see if you could get it for $14, or would you jump on the opportunity now with the knowledge that it will undoubtedly go back up?