Posted by Rob Minton
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Everywhere you turn, you hear or read that we are in a "down" real estate market here in the United States. There's no question that the mortgage mess and the drop in real estate prices have created uncertainty and nervousness about real estate. If you want to call it a "down" market, that's fair.
But don't mistake a "down" real estate market to mean a market in which investors can't make any money. A "down" real estate market does not mean a "bad" market.
If you think about it, those who have recently lost money on real estate were those buying at the height of the market -- flippers and speculators, mostly, trying to make a quick buck. They're now stuck with homes they can't sell, or even rent for enough to cover their losses. To me, the market in which they bought those homes was more of a "bad" market to buy in. Now, with prices having dropped so much and with a huge inventory of homes to choose from, investors are actually at an advantage. And investors ARE making money in this market.
Below is a check for $10,000 an Income for Life investor recently received from a tenant-buyer as a down payment on a rent-to-own purchase.
This investor received this large up-front payment on this property, AND is earning positive cash flow every month. How could anybody say that was a bad investment?
The fact is that despite what you hear about the real estate market, investors ARE making money. There is still great demand for rental properties, and people who might have qualified to purchase a home just a couple of years ago are now among those in the rental market. Wouldn't a tenant who had saved up enough money to put down $10,000 on a home make a pretty good tenant? Also, with prices lower, it is now easier to find rental properties that will give you positive cash flow each and every month.
Just as stock investors can make money in both bull and bear markets, real estate investors can make money in both up and down markets. So when it comes to real esate investing, don't just assume that a "down" market means a "bad" market.
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