Jim Kramer is a genius. He hosts a show called, “Mad Money” on CNBC. He graduated top of his class from Harvard and is one of the most respected names in the financial news industry. Jim has an expression – “There's always a bull market somewhere”. I like this so much I am going to pilfer it and use it in my presentations because it so aptly applies to real estate investing.
If you invest in REITs, stocks or funds that are dependent on the real estate market, the housing news (bad news) is very relevant. If you are a dealmaker, a house buyer, and a bargain hunter, you look for deals that exist despite the market. In other words, look at neighbhorhoods figures, not national or statewide figures on housing when investing. In every city there's certain neighborhoods that are up or down, no matter what the citywide or statewide news about housing is telling you. Find those bull markets, and you will make money.
“B.U.L.L.” Is My Four Part Formula For Beating A Bubble Market:
B – Buy Local. If you focus on local news rather than national news, you will do much better.
U – Under Value. If you buy properties under their current market value, you will win in any market, because if the value drops, you'll still have equity to spare before the market cycles around again.
L – Low Interest Rates. Lock in low interest rates, and when things rebound, you'll have a nice low payment.
L – Long Term. If you are buying for the long term, the temporary drop in the market won't hurt you, particularly if you buy under value and with low interest rates as described above. “Dollar Cost Averaging” is the name of the game for long-term players, which means no matter when you buy in the cycle, in the end it always goes up.
There You Have It – The B.U.L.L. Beats The Bubble!