By Ozzie Jurock
The oft asked question: Is it over? Should I sell now and wait for the market to drop? Is it too late to find a good deal in real estate? Whenever real estate markets slow, the "is it over" question is prevalent. It is also a valid question - if I had not heard it for 38 years.
You know my answer already: It is never over. There have been good times and bad times and throughout them all, it was never over.
Over would mean that real estate values could plummet like stock markets; i.e. 50 per cent in a couple of weeks. Yet the last three reversals in B.C. saw us drop an average of 17 per cent over a three year period, before we resumed our upward climb again.
Over would mean that all of a sudden we changed from a nation of homeowners (some 76 per cent of us are paying off a mortgage or are at least on the way there) to preferring renting.
Over would mean that there is no inflation, that worldwide governments did not madly increase the money supply as never before. Create money and hard assets rise.
Over would mean that we are not living longer, becoming healthier and staying in our homes longer, thereby needing more new housing units than before.
Over would mean that our natural habitat - ocean on one side, border on the other and mountains on the third side - could be somehow expanded, but they cannot.
Over would mean no population growth, no jobs. Yet we have a 33-year low unemployment rate and strong inward migration, both international and inter-provincial.
Over would mean that we have a lousy economy. Yet we have a 10 year low in business bankruptcies (-57 per cent), enormous capital investment - billions in projects.
What we do have is a period of readjustment. Our current 74 per cent affordability rate is not tenable, our double digit price increases not sustainable and we will go through a valley of readjustment, just as we did in previous times, and come out the other side still climbing that "invisible inflation." In fact, throughout those periods investors ended up doing better. The worst deals come about in good markets, the best in tough markets.
If you agree with this then the real question you should ask is this: Are you prepared to do the work? You have to have a plan of action. It is never the good or the bad market; it is always, always, the good deal you make for yourself. It may take a while; be patient, but in the end what works is the tried and true wisdom of choosing a good road, a proven system, following some principles, getting into order and then staying persistent and doing it for yourself:
A successful real estate investor is not sidetracked by any market; he or she is always out for the deal that benefits them personally. In fact, nothing matters more than the consistent and persistent action of meeting people who can say yes or no to a buying or selling decision, so get into order and expand and create this action plan:
1. I will create a plan of action specifying whether I want to be a shark, a grave dancer or an investor. I will review my actions of the last year and compare what I planned to do versus what I actually did do.
2. This week I will make appointments with professionals in my target area.
3. I will review all real estate oriented websites to find like minded spirits. Or, I will post what I am looking for: deals, partners.
4. I will visit www.realestatetalks.com and start chatting with other interested investors always looking for "By Owners."
5. I will see three properties this week in my area.
6. I will sit in court and learn about foreclosures.
7. I will look up all price reductions in my area. (During the last week of May there were more than 1,200 reductions!)
8. I will see a mortgage broker, to review and understand my financing needs.
In my real estate action groups I see astoundingly good deals by ordinary people, every week, in good markets and in bad markets. But usually only by people who have a plan, are committed to it and take action. It is not luck. The harder you work, the luckier you get.
This article appeared in Westcoast Homes and Design, June/July 2008
Ozzie Jurock, FRI, is a Canadian real estate adviser and author of Forget About Location, Location, Location. He is featured in Donald Trump's latest book, Trump: The Best Real Estate Advice I Ever Received. You can reach him by e-mail at firstname.lastname@example.org or www.reag.ca.
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