Overcoming Fear of the Market

[Mike Dymski]

We have been reading consistent posts for four years now regarding "it's a bad time to start", "the recession is near", "I can't find good deals", "the market stinks", and similar posts.  I suspect that we need to understand the following:

1. The market has been good (not bad) for real estate investors...we should be celebrating.
2. 2010-2014 was the anomaly, not now.  REI has historically been very competitive.
3. Cash is not king in real estate investing...deal flow is (lots of it).
4. If you don't start now, you will have no experience or relationships if a correction occurs.
5. If a correction occurs, lending/capital sources can dry up.
6. Investors over-estimate their ability to pull the trigger when prices are crashing and there is no end in sight.
7. If you can generate even a small positive IRR from real estate during an economic recession, idle cash is the risky choice (and is very costly over long periods).
8. All properties and markets will not loose significant value in the next down cycle (real estate is local and good locations will always perform well).
9. Investors can add as much or more value to a property than the potential loss of value in a downturn.
10. If we have capital that we have to put to work, prudent real estate can be the flight to safety.

I don't like investing into a hot market but sitting on the sidelines for years is not a viable strategy...just have to be really careful.

If you are a market appreciation only investor, ignore this post...that can require some market timing.

Interested in everyone thoughts.

[Craig Curelop]

@Mike Dymski - I am a fan of dollar cost averaging. Buy a cash flowing property once every 12-18 months consistently over a long period of time 10+ years. That way you mitigate any market risk by buying when it's low, buying when it's high, and buying in between.

As long as the property cash flows, I really don't care what the value of the home does.