How To Predict Market Stability – Even If You’re Beginning in Real Estate Investing

Take it from me, beginning in real estate investing can be more than a little scary. To many of those who haven’t taken action yet, real estate seems like something better left to the pros. Even though this is far from the truth and anyone can play, most people are overwhelmed thinking there is more to all these great real estate deals than there really is. The one obstacle people really have a problem surmounting is the idea that they can lose in real estate. And when you lose in real estate, you can lose big.

While this is true, there is no reason to ever lose in real estate. Real estate is a year long, economic independent market that is never controversial for the savvy investor. Note that I am stipulating “savvy investor” folks.

Because real estate thrives when the economy drags just like it still thrives in the better times as well. Don’t get me wrong, real estate is like a shark that will bite the beginning investor hard if they don’t know what to do. It can sink a buyer as well as a seller any day of the week.

But, its market is never unfavorable for the person who knows how to shift with the times. So then, where is the market right now, you ask?

That’s a darn good question.

• Just recently, the Office of Federal Housing Enterprise Oversight (OFHEO) reported a rise in home pricing when it issued its quarterly house-price index (HPI).
• However, the National Association of Home Builders (NAHB) issued a seemingly conflicting report at the same time saying that home prices were down.

My response? BOTH reports are accurate and as a beginning investor, this is the type of detail that you need to note when reading about trends in real estate. Let’s break this down some more and look at the indicators to see why I might say this – and how it WILL affect your business.

House Price Index
Knowing that the HPI tracks only repeat sales and refinance transactions helps beginning investors understand the nature of what seems to be two conflicting reports published by the OFHEO and the NAHB. The transactions tracked by the HPI involve mortgages of $417,000 or less that don’t include condominiums or mortgages on properties financed by FHA or VA mortgages as reported by the OFHEO guidelines at ofheo.gov. Even though the report from the OFHEO is restricted somewhat, it still tells investors a great deal about growing trends in the real estate market.

To begin with, OFHEO gets its information from Fannie Mae and Freddie Mac, which combined comprise the U.S.’s largest database of conventional, conforming mortgage transactions. This database is capable of highlighting most of the nation’s real estate buying trends. If housing prices are rising much faster than normal, a savvy real estate investor should be sitting on property already owned and not looking to acquire anything for awhile unless they can get something with significant discounts.

Understanding the market trends helps a real estate investor know how to act when the time is right.

If you are a beginning investor, you might not have the resources to sit on property you are trying to flip. Communicate this growing trend to a buyer and you have your sale. When a buyer knows that making the investment now will lead to profits and creating future wealth, your buyer will be more than willing to accept your current offer expecting a significant rise in value. Real estate has a way of working on people that way!

New Homes
The report issued by the NAHB covers the drop in pricing of new homes. That means new homes as opposed to repeat sales or refinancing transactions. In real estate, that’s the other side of the spectrum. If the price of a new home continues to drop, be patient and get it at the bottom. You can flip the property and make a profit once you find that young, newly beginning couple looking to invest with their first time buyer resources and their decent credit. They will have the funding resources available to take the price you put in front of them.

Yet, in order to be able to make savvy deals like this, you have to be able to read the market before it makes a drastic move by staying on top of the growing trends.

Dragging Economy

Real estate is not like oil or oranges. There will never be an economic situation where real estate is rendered unable to thrive. Because in a dragging economy, there will be even more owners who are looking to sell at deeper discounts. By planning ahead, you’ll be able to make great deals that help the owners get out of their financial situation. Besides the obvious, when an owner is facing foreclosure, you can save their credit by manufacturing a great deal that helps them get out from underneath of their mortgage before the house is taken by the lender and creating a win/win solution. Here, you’re offering a troubled owner the opportunity to begin again and be able to maybe return to investing into real estate at some time in the future.

This is just one of many examples, whereby in this instance, the real estate will be easy for your business to flip because you’ll be able to provide potential buyers with incentives since you were able to obtain a beautiful deal on the sale. When the economy drags, the federal government provides grants and backs mortgages to keep the economy moving forward.

As a real estate investor today, you are in a prime market at the perfect time. From the very beginning, learn all about financing options from every resource you can.

It’s good for business to be able to point potential buyers in the direction of all the money your investment business will eventually be putting in your pocket.

Booming Economy
When the economy is doing great, real estate is doing even better. Lending practices tend to relax because employment is on the rise, investments are on the rise and an overall lighter mood has overtaken everyone. If the position in your strategic plan was written to be mid term, then now is the time to unload the property you bought at huge discounts. Now is the time to work out savvy deals with sellers because more married couples will be looking to move out of their apartments they were only able to afford during the tough times.

They are buying now and you are in the prime market at the perfect time. You are offering people a new beginning and yet, the real estate market has a whole new face. That’s the stability and predictability of the real estate market when you’ve set yourself up to “ride the wave” as they say.

And what to do when you’re offloading your residential properties in a rapidly appreciating market and booming economy? Well, while many are moving out of apartments, and poorly managed commercial buildings are unable to break even, now’s the time to take advantage of landlords motivated to sell. Because eventually – everything comes full circle. Once the tables have turned, the economy slows, and banks tighten their lending restrictions, more people will be unable to afford new homes and they’ll then become renters.

If you are just beginning, investing in real estate can certainly seem a little overwhelming. Perhaps even daunting.

But, it is by design the most amazing business opportunity ever. The pricing of houses rise and fall and the OFHEO keeps real estate investors abreast of growing trends. The NAHB might issue conflicting reports, but that’s because they are monitoring an entirely different real estate entity, the new home. Either way, real estate thrives in good times and in bad times. Whether the economy is dragging or it’s booming, the real estate investor always has profitable options.

Inevitably, the success of your real estate investing business rests on your shoulders. Armed with this powerful information, and the discipline to follow through on your decision, nothing will stand in your way. Learning to read – and then following the market is your job. When you know where and what to look for, it’s easy, so get used to doing it for the long haul! Start applying these principles today and begin flipping real estate for FREE by starting your 7 Day Trial at INSTANTRealEstateSolutions.com!

Brad Wozny
Founder, www.INSTANTRealEstateSolutions.com™
Creator, 7 Figure Profits™

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