Where Do Long Term Investors Go Now?

Unless you've been purposely tuning yourself out from all the bad news with financial markets, odds you know it is now threatening the entire stock market and economy. There is a bailout plan on the table, which still doesn't have any guarantees as a "fix all".

So where do investors, not just real estate investors, but investors of all walks of life, go now? With the stock market teetering somewhere between a long term bear market and a meltdown, with inflation looming from the trillion or more bailout, where does all that big money go... you know, the trillions that make up the market cap of the stock market?

Gold? T-bills...? REAL ESTATE!

The first market to get clobbered from the bad practices of the financial markets was real estate. We all know how bubble happened, and it is now working it's way all the way back to the source.

We've seen the fallout from real estate, and some real estate markets are bouncing back nicely, while others are poised to do so shortly, and others are in a holding pattern. Recent builder numbers showed optimism for the first time in a while.

For investment minded people, here's the best part about real estate... it's a tangible investment. It's not something that vanishes when a company goes bust like stock shares. You're investment account vanish overnight. It's not something that can be easily manipulated like paper market commodities.

With the current uncertainties in other investments, and the known variables regarding the real estate market at this point, it is looking to be one of the safest types of investments around right now. With real estate, you know where you stand, and for many areas, we're standing near the bottom.

Also look out for more and more big time investment money is going to be moving in, as we talked about in a previous story about Sovereign Wealth Funds attempting to buy up houses.

Here's the caveats though:
1) Credit markets must not gridlock. It seems doubtful the government, with it's willingness to go as far as it has, is going to keep qualified borrowers from getting mortgages.
2) The overall impact on the economy, mainly employment, must not be highly affected.

Obviously, the above two issues could hinder buyers from stepping in at a pace that will finally shore up the real estate market (good if you're already in, not good if you are not), but the extremes presented by doom and gloomers don't seem as likely as a solid, healthy correction

As the old adage from ancient Rome goes - When there is blood on the streets, buy real estate.

geting started

i want to do 10 houses and want to now how to go forwerd with this program thanks

Excellent Observation

Anitarny's picture

I was thinkin the same thing myself. Its not mcu that an investor, of any kind, can put their money into and have it still hold some kind of value.

I agree that the market is very turbulent right now and I also agree that realestate is where to put the dollars. In my local area
I am seeing, within the last week, many invetors forming co-ops and groups, for the sole purpose of buying up properties. Most doing so to gain a place to put their 1031 monies.

Local banks have been doing no loans or only loans with huge collateral request, so the hard money lenders are now getting some great business passed to them because of thier abaility to loan without consideration of credit. Just another FYI.

Vanishing Act

dgadmin's picture

I have been a long time stock market investor and trader, and have a lot contacts whom either invest themselves or have money managers they've trusted with their savings. I personally know of several people who have had large portions of their investment accounts vanish into thin air. These people fall anywhere from the tiny investor trying to create a nest egg to the moderately wealthy... but the results were the same.

This is the security with real estate right now, and many people realize it. It's not just because of the huge upside with the deep discounts on home prices... it's just plain safe compared to the alternatives. It's turning into a no brainer for most money savvy individuals right now.

Even with gold, the paper markets hold so much sway over the price, it's as volatile as the stock market. That's not to say I don't have any positions in gold, but it's something you can't watch daily or it will rattle your nerves.

In the end though, if everyone holding gold on paper tried to get delivery on that physical gold, it would double or triple. That's the problem with paper markets, reality doesn't dictate price or movement.

With real estate (keyword: REAL Eye-wink , we know where we stand right now. The only question is the ability to acquire to funding for the small guy. The big guys have plenty of dry powder and I don't think there is much doubt they will be going after it at a feverish pace.

Things are as interesting as ever for real estate investing, and bubbles like these hurt everyone, but the shrewd individual can capitalize on it to hedge the pain to themselves, and many times flourish in it.

To throw another totally overused, but plenty appropriate adage out there - When life gives you lemons, make lemonade.

-DGadmin

Money for The Little Guys

Anitarny's picture

You commented on how the big guys were going to and have already started to swoop in on the real estate. Well the little guys can jump in there too. With private money and investment groups. If they look for the private funding - not HML's - then they can grab some with out the credit hassles and most of the other baggage. If they have a little cash themselves then maybe they should look for other small investors with a little extra cash as well and buy together as a group.

I am seeing a lot of that in the Los Angeles area right now. Small investment groups are jumping up everywhere. I just spoke at four in the last 2 weeks and the message was all the same. Dont rely on the baks for funding right now, they cant even fund themselves, leave the HML's alone, their interest rates are through the roof. Put our money together and lets buy, buy, buy.

Money for The Little Guys

Anitarny's picture

You commented on how the big guys were going to and have already started to swoop in on the real estate. Well the little guys can jump in there too. With private money and investment groups. If they look for the private funding - not HML's - then they can grab some with out the credit hassles and most of the other baggage. If they have a little cash themselves then maybe they should look for other small investors with a little extra cash as well and buy together as a group.

I am seeing a lot of that in the Los Angeles area right now. Small investment groups are jumping up everywhere. I just spoke at four in the last 2 weeks and the message was all the same. Dont rely on the baks for funding right now, they cant even fund themselves, leave the HML's alone, their interest rates are through the roof. Put our money together and lets buy, buy, buy.

hi on the bail out deal

alaska1971's picture

what ive seen from the news its not a quick fix ,me personaly i feel that congress acted to hasty on getting the bail out bill passed, all the add ons , just blows my mind , on congress rep. said there were adds on for Rum , and wooden arrows, etc, what the heck ,i have common sence i like to think all this sweetners they stuck in the bill is out rageous to me,
right now im trying to get my credit cleaned up some and move on to my next realaste deal , i do know its hard up here inalaska too to get loans ,
mike
alaska

ECONOMY

The area I live in is definately in a bottom out phase. Not only is the economy bad but there has been investigations into excessive tumors popping up. Not only has this scared off many potential buyers but the prices of houses has fallen. Now would definately be the time to buy and rent out. The bail out plan that congress is trying to pass is not going to happen overnight and will not fix everything. We have to be able to use all the options available to us in order to wisely buy properties. After reading the book, I know luck doesn't have anything to do with making it, only perserverance and determination.

22 cents on the dollar.

Dan_Auito's picture

We're definitely seeing some bottoming out around certain parts of the country here in Tampa we just had three packages of homes from around the country, mostly Mi. Oh, Il, In, where 25 homes are being sold in packages at average prices of around $7,500 each with appraisals at or around $80,000 all three packages sold within 2 hours of our getting them.

There is more in the pipeline now that Paulson has decided to buy stock instead of non-performing assets.

These are crazy times indeed.

buying homes the dg way and renting out

fortran1994's picture

Hi All.
I just finished college and also finished reading Dean's book.

My goal is to buy 1 or 2 homes and then rent them out.
However, I only found techniques mainly for assigning and selling equity.

What are the techniques used to buy a property and then keep it and rent it for the long term?
Thanks for any help!
MayJean

Real Estate Great investment

Joe Jurek's picture

I enjoyed reading the article. Real Estate is the best investment during any market condition. It is always to see what other may not see and not to follow the crowd. Believe and Achieve! Smiling

reluctant realtors

All States Investments's picture

Anyone else seeing reluctant Realtors that don't want to put in low bids? I have had 2 lately that won't even submit the offer.

LB needs suggestions for finanacing in FL

I am trying to purchase my retirement home in FL...have short sale approved by Bank...unable to get financing because the HOA is not strong enough in reserves....also too many renters in the community vs home owners/2nd home owners....this is a community that was built at the height of the boom....owners just trying to hang on...(has no chinese drywall)
Any suggestions how to get financing??? LB

finanacing

try this company heard it was a miracle worker ,mplx.org

Locking up a propperty

I ran across a home owner, that had little luck with a realtor. he owns the house free and clear, it is a 3/2 brick good condition, asking $165k, he is now thinking of just renting it out, but after talking with him for a moment he is open to a lease purchase. How do I set this up, and what forms do I need to download to take over there to do this? I have a few tenant buyers on stand by!

Control Properties Instead of Buying Them

I am a big fan of doing sandwich leases on properties that a seller can't sell. You control the property with very little money and lease it out for a year or two and let the ecomomy grow and your property value increase while you are waiting. Think about it. You can control a $100,000 property with as little as $500 to $1000 dollars.

RE; Reluctant Realtor

jcshanks's picture

Hi Yes I talked to him about a lower bid than he suggested and he snibbed his nose at me. Could it be that he would not make enough on it? I am now getting 203k approved to by this foreclosure and then have to get three bids to rehabe this house before I can get a loan on it. Is there any faster way to buy this house with no money down if possible?

Real Important Comments for Dean & DG family!

Hi Dean, 04/09/2012

You said that “leave you messages": I hope you'll get my messages! I have spent so much $$$ for your training (couple different training....) all cost me thousand & thousands of DOLLARS$$$$??? Still I did not make a dime or pennies yet!!! I have consulted with different websites..... They said that you guys are more theories than action!!! I wonder "what are your comments to that"?!!!
I'm sure that would help a lot of people that was on my same boat @ list: we deserved these answers!!!

Thanks’

Dennis LT

PS: I had posted this comments after I have watched your STAMINA advertising, I have lost more than a year and half to invest into your training.......

Syndicate content