“Sell when people are buying, Buy when people are selling”

Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”  -Warren Buffet

At the peak of the housing bubble, analysts touted real estate prices had nowhere to go but up.  Economists, bank CEO’s government leaders, most of the majority of the best minds in the world missed the coming biggest collapse of housing values since the Great Depression.  The public: teachers, accountants, bus drivers lined up to buy real estate following the herd mentality - buy because everyone is making money in real estate.   Long term success in real estate has never been based on a get rich quick theory.  Buying property in a down market, holding property long term, prudently managing property, and selling property during periods of market expansion is a time tested strategy for wealth. 

How do we know this is the time of a lifetime to buy?  We have experienced 3 years of economic decline.  Millions of buyers are unemployed.  Financing is extremely difficult to obtain.  Household formation  is at a 40 year low. Interest rates not seen since Truman was president. The nation’s largest seller Fannie Mae and Freddie Mac had 166,787 and 74,910 You can search the available properties on our website respectively, doubling since last year and expected to increase substantially despite dropping prices and offering incentive to move property off their books. Big banks and small banks  are failing in record numbers from growing inventories of non-performing assets; i.e. foreclosed real estate. The directive to bank management regulators, board of directors, and investors is clear; get those properties off your books.

RealtyTrac reports 24% all US residential sales in 2nd quarter were foreclosed homes. The sales price of these homes was 26% lower than the sales prices of non-foreclosed homes. Foreclosure filings were reported on 332,172 You can search the available properties on our website in October 2010. October marks the 20th consecutive month where over 300,000 U.S. homeowners received a foreclosure notice,” said James J. Saccacio, chief executive officer at RealtyTrac. 

Where are the buyers that were rushing to pay sky high prices for real estate a short 3 years ago?  The herd has changed directions, advised by the same economists and pundits who preached sky high prices will never fall.  Today in unison, the economist and pundits are preaching there will be no recovery in rock bottom prices during the next decade.  The big question is will you profit from the today’s depressed market, the rush to sell, the fear of buyers, the pessimistic pronouncements of pundits?

Deeply discounted You can search the available properties on our website are a substantial part of the US housing market today. It appears the bottom is near.  In some areas, despite decades of inflation, properties can be purchase at prices far below their purchase prices in 2000, 1990 even 1980.  If you ever said, “I should have bought ten years ago when prices were low”, the market has given you a second chance.  Today, I am buying properties at prices lower than I sold them for in 1982.  Unbelievable! 

With the record number of foreclosures coming to market, the fire sale of You can search the available properties on our website is expected to continue for 12-24 months.  How do you profit from this perfect storm in US real estate markets? 

First assemble your cash, REO sellers prefer cash.  If this is not an option, obtain full approval for a loan, subject only to the property appraisal from a known, reputable lender. 

Second, assemble a knowledgeable team of professionals coordinated by an experienced Bruce Ailion is an experienced Realtor with experience in REO markets, investor You can search the available properties on our website and superior local market knowledge.  Such a REALTOR will have connections and recommendations for inspectors, appraisers, contractors, insurance providers, attorneys and property managers needed to execute a successful investment strategy. Buying a bank REO is not the same as buying a home from a traditional seller or builder.  Skill and knowledge in this market is critical to protect your interests.

Third, establish price and location parameters.  Determine the types of repair issues you are willing to consider.  Learn and understand the market you are considering; view listed You can search the available properties on our website, view sold properties, and call recent buyers to confirm the returns you expect are being received in the market.  How do trends in this market support your buy and hold strategy?  Will neighborhood and macro trends support your exit strategy when the general economy improves?

Last be prepared to move quickly.  Today’s investors are quick to identify a good buy.  In my market 25% of You can search the available properties on our website are under contract in less than 15 days.  The take away lesson, “You snooze, you lose” 

The biggest mistake new investors make is to waiting for the bottom.  No one can predict the bottom of the market.   Now is the time to buy.  Once the market realizes we are past the trough in values, herd mentality sets in and prices rise sharply.  By then, your easy and best returns are lost.  It is a long known fact, you make your money in real estate when you buy, it is realized when you sell.  Tomorrow’s millionaires are buying real estate today.  Seize the opportunity.