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Updated about 6 years ago, 10/10/2018
Mike DymskiPoster
#5 Investor Mindset Contributor
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- Greenville, SC
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Overcoming Fear of the Market
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:
- The market has been good (not bad) for real estate investors...we should be celebrating.
- 2010-2014 was the anomaly, not now. REI has historically been very competitive.
- Cash is not king in real estate investing...deal flow is (lots of it).
- If you don't start now, you will have no experience or relationships if a correction occurs.
- If a correction occurs, lending/capital sources can dry up.
- Investors over-estimate their ability to pull the trigger when prices are crashing and there is no end in sight.
- 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).
- 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).
- Investors can add as much or more value to a property than the potential loss of value in a downturn.
- 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.