Is it 2006 all over again? Mistakes to Avoid in the Next Crash REI In Your Car Episode 1027
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We all remember what real estate was like in 2006 (and, subsequently, the years that followed). Today I talk about how 2021 is a parallel to 2006, how we can take advantage of it, and how to prepare ourselves for a potential downturn.
Between 2003 and 2006, real estate investors, and even people who were not familiar with real estate, we're able to buy properties and turn around and sell them quickly for a large profit. Basically, they were selling on speculation. We are seeing the same trends right now, in 2021. I\\u2019m sure we all remember the crash in 2008, and most of us were probably affected by it.
The truth is, we may have a few more years of this kind of appreciation and speculation, BUT we\\u2019ve got to be careful. And we can be; the real estate market isn\\u2019t like the stock market, things don\\u2019t change on a dime, and you can usually see the trends three to six months out.
What should you watch for? If someone who doesn\\u2019t know a thing about real estate is able to go in, buy a property, and sell it quickly for a hefty profit, that\\u2019s a sign. That\\u2019s not real estate investing; that\\u2019s luck and speculation. That\\u2019s a trend that can\\u2019t last forever. Watch the market.
You should know three to six months out when the market is going to slow down, and that\\u2019s when you get out.
Stick to your investing fundamentals:
\\u2014Don\\u2019t count on appreciation.
\\u2014Make sure the property can cash flow.
\\u2014Keep multiple exit strategies in case you need them.
\\u2014Maintain your financial reserves.
\\u2014Do not take out debt to buy down payments.
The market is on fire right now, and you should be taking advantage of it. But take advantage of it carefully and use discernment. Don\\u2019t overextend yourself or your resources and be a student of the market; you\\u2019ll see the slowdown coming.
What's Inside:
\\u2014Why you should NEVER borrow money to buy a pre-construction condo.
\\u2014Remember the investing fundamentals to avoid being burned when the market slows down.
\\u2014What should we watch for to avoid getting burned in a downturn?
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