What to Do … if the Economy Goes to Hell!
The real estate market throughout the U.S. has been going through a dramatic two-year recovery.
According to the National Association of Realtors, the median price increased 11% over the past 12 months, and 21% over the past two years.
That’s pretty crazy … when you realize ‘normal’ is around 3% a year!
What’s driving it?
Lots of investor activity for sure (with a big percentage being cash buyers), but it’s also owner-occupants, both of whom have been enticed by record-low interest rates.
Over the past few years, courtesy of the Federal Reserve, we’ve received a massive dose of free money, thanks to almost zero-percent interest rates and “quantitative easing”, where the fed attempts to increase the money supply and increase liquidity and lending by buying up government and other types of securities from the open market.
Yup, they just press a button and create instant money – right out of thin air. And they’re doing it to the tune of around $85 Billion a month! That’s a big part of what keeps interest rates really low.
So what do you think … can this kind of artificial stimulation continue?
And should you be concerned as an investor?
I definitely think it’s something you should be paying attention to. Especially if you’re only doing things one way.
Like only flipping. Or only looking to buy with bank financing. Or only looking to exit with buyers who are relying on bank financing!
Or only buying & holding. Or only wholesaling.
Only one of anything … is not a good thing!
Especially in such unpredictable times … in an economy that’s feeding itself massive doses of artificial sweeteners!
The tide can change. Quickly.
So what can a savvy investor do to be prepared for whatever happens in the real estate market?
First off, understand the “Property Cycle” and what stage a market is in, so you can apply the RIGHT STRATEGY.
Then work on becoming a “Transaction Wizard”, and someone who possesses multiple ways to generate leads … multiple ways to finance a transaction … and multiple ways to structure a deal.
The key word? Multiple. One of anything is a death sentence.
In my opinion, becoming ‘wizard-like’ can insulate you from the winds of change … allow you to create your own economy … enable you to forge your own financial destiny … and virtually make money at will.
Regardless of the economy!