Everyone talks about how timing is everything in making money in real estate.  Well I am here to tell you that in a broad sense that is just plain wrong!  There are a lot of ways to make money in the market, buying distressed properties, development, apartment investing with upsides on rents just to name a few.

The general market has many ups and downs so can you actually time the market? Is it really that important?  If you think of home values in long term cycles, clearly no one ever wants to buy on the top.  That is of course unless you sell at the top of the next cycle!  Each and every real estate cycle ends with a higher value than the previous cycle.  Every market correction is followed by an eventual overheated market where values dramatically increase.

If you look at real estate value on a bell shaped curve with value expressed over time, then it really does not matter if you buy on either side of the peak or the valley, you will realize a gain on the next upward swing.

The short term speculator, who buys to resell quickly, without looking to make improvements to the property, is at the greatest risk.  This buyer must always look at the possibility of a longer than expected time frame of holding onto the property and what the impact of any negative cash flow will do to his ability to maintain ownership of the asset.  This is felt the greatest when the properties are heavily leveraged.

As long as you buy to hold for the long term, it does not really matter what side of the curve you buy on.

You will make money and create real estate equity.

By Bill Grasska, Teles Financial/ www.telesfinancial.com

For more information, please contact Bill Grasska at 310-442-4040 or email him directly at bgrasska@telesfinancial.com.

Filed under: Uncategorized on August 21st, 2009