Why Real Estate Investors are Losing Money

  Real estate investors are losing money because they are afraid to invest in an unstable real estate market.  Although fiscal conservatives will maintain that in order to reliably attain wealth, one must manage and minimize the risks involved in investment, there is also something to be said for taking advantage of a great opportunity.  The financial crisis in this country has caused rental, leasing, and purchasing prices on properties to be driven through the ground floor and into the basement, widely increasing the margin for potential profit on a given investment; yet investors fail to act.

      There have never been as many foreclosures and short sales as there are right now, and although the economy is showing signs of steady improvement, the forecasted numbers of foreclosures in 2010 and 2011 are supposed to set records (measured in millions, not thousands).  Even for the unlucky investors who took enormous hits to their portfolio and equity during the course of the last five years, there is no shortage of opportunities for creative financing terms.  One of the benefits of a slow economy is that is generates desperate sellers; and since we’d rather not perceive ourselves as taking advantage of the unfortunate, we remind ourselves that buying short sales and foreclosed properties helps quite a few people out of a very sticky and unsettling financial scenario.

      The most costly mistake that investors will make this year is not losing money, but failing to capitalize on opportunities that could generate substantial income.  It is common knowledge even in high school to buy low and sell high, so why do investors think it wise to wait until the economy stabilizes to invest?  By then, so many real estate investors will have garnered enough capital to jump on the short sales and great deals that the demand will once again be on the rise, and we’ll be back on our way to the seller’s portion of the real estate cycle.  Take advantage now, before the recovery bubble takes shape, and you will reap the benefits as the economy is revitalized, breathing new air into that real estate bubble.  After all, it’s called a buyer’s market for a reason.  Buy, buy, buy, and take advantage of the opportunity to be creative with the financing—you just may make a fortune without using any of your own money! 

Tell us what you think. J