This article focused on a lot of the financial and government reports we hear about each week, and whether those reports tend to reflect the past or predict the future.
Being an eternal optimist, I tend to believe there is a huge amount of opportunity out there right now, particularly in the Bulk REO and Commercial investing arenas. But rather than rely on my gut feelings, let’s have a look at what that article suggested:
JOBS: Based on Weekly US Job claims, it appears that job losses may be stabilizing.
HOUSING: Based on housing starts data, the real estate market is in very weak shape to this day. (Only buy property when you get a GREAT deal!) (UPDATE – there is some very good news: Housing Starts data.)
INCOME: As of March, the divergence between Gross Domestic Product & Gross Domestic Income is growing, suggesting that income is still on the decline.
BUSINESS CONDITIONS: The US National Federation of Independent Businesses publishes a good survey that suggests a 4.5% contraction in business through the second quarter of ’09.
FINANCE: Banks are paying less to borrow from the government, and less to borrow from each other. Both good things for credit availability.
Taken in aggregate, these things appear negative. And frankly, the state of our economy is negative, if you expect the government to take care of all of your needs, or if your economic viewpoint is determined entirely based on what you see at present.
I think there’s a better way. Consider this viewpoint:
Personal income appears to continue its decline, and while job losses appear to be stabilizing, there is still significant awareness and fear in many Americans concerning the security of their employment. Additionally, average Americans view the real estate market as being in complete disarray, even though you and I as informed investors know that most of the foreclosure carnage is focused in only 3 states, and there are many local areas experiencing stabilization and some appreciation.
It all “feels” negative – but does your gut suggest that opportunity may be lurking out there? Mine does… And while I’m not a brainwashee of Warren Buffet’s, I do agree with him that one should be fearful while others are greedy, and greedy while others are fearful. Right now is the time to let your greed glands swell, because fear is running rampant in America today.
Dealing rationally with our circumstances requires us to simply take off the blinders and understand that neither a strong economy nor widespread public confidence are requirements for profits in real estate. In fact, we all know that the seeds of great profit are found in times of great fear, and this is one such time.
My admonition to you is this: This is the time to think BIG and think CREATIVELY. I honestly believe in my gut that now is a great time to “swing for the fences” and go after seriously attractive opportunities, even if they are outside of your comfort zone. Think Bulk REO’s. Think commerical investing. Think about optioning raw land for the eventual return of residential development. Think ****BIG****…
This is particularly true, even if you are relatively inexperienced or without funding. Right now, I think the biggest assets you can bring to a real estate investment project are VISION and CONFIDENCE. Look down the road, past the mess our economy is facing. And think in terms of transactions that will change your life, not just change your year.
It’s all good, my friend. Opportunity abounds. Make it yours. Thanks for reading RealEstate.BryanEllis.com!