Why Invest in Real Estate?
As an investor you probably already know that there are two kinds of assets people invest in. There are financial assets also known as paper assets (stocks, bonds, mutual funds, and other kind of securities) and there are hard assets such as commodities, precious metals, and real estate. If you speak with a Stock Broker he will most likely tell you that investing in securities will pay off in long term. Tell that to a person that has worked hard, invested in mutual funds, and now that they're close to retiring, realizes they can't because there isn't enough money to retire.
On the other hand those landlords that bought property years ago (not during the peak of the market) still enjoy the cash flow generated by their rentals. Yes, they may not be able to easily sell their properties, the values may have gone down, but their tenants are still paying their rents. Rental market value did not go down and those people that have lost their homes still must have a roof above their heads.
Is Real Estate Investing the same in all areas of the USA?
Not quite. During the Boom years of the early 2000 not all areas of the country experienced similar inflated values. When the Bubble burst each area has been impacted in a different way primarily by the local economy and also by the degree of prior property inflation. Equipped with knowledge of macro economics we scout the areas that:
- have good economic forecasts
- have the potential of future capital appreciation
- generate high cash-flow on rentals
We know about the Boom/Bust cycles, how they are created, and how to look for investments that will not or will be minimally impacted by these cycles. We assess each potential transaction and evaluate its degree of returns and risk and we believe that when you invest for long term (not speculation) you should not be investing in an area or a field that has a Boom in the making. This kind of service is something that you will not get with other companies. All they do is sell you on the idea that you can generate huge cash flows but they won't tell you anything about what could potentially go wrong with the local economy or the investment itself.
When looking at various investment opportunities do remember that "anything that appears too good to be true, most of the time it ends up being that way...too good to be true"! Pay attention on how the crowd is rushing to invest in one particular type of investment or one particular area and remember that those that triumphed were not the ones that were moving with the crowd. America is a big country with various cultures and economies that differ not only from state to state but also from city to city. A great investor is a great forecaster. Do you have knowledge of basic economics? Do you have hundreds of hours to spend on learning about the economy of each area? Most of the investors we know don't. This is what we do on a daily basis and that's why it makes sense to use our recommended strategies.
