Home prices: 'Double-dip' confirmed

this info is spot on. This economy is so screwed up that only those investors that have a plan (and I don't mean just look at properties and wish) will survive. Investors are going to be tested constantly so they better have an exit plan for each property. Prices are ratcheting down. Banks are getting ready to unleash Foreclosure Town 2.0. Unemployment will increase again. Get ready for the ride of your life thanks to Congress, the greediness (and stupidity) of Wall Street, the brainless antics of the money center banks, the poor monetary policy of the Federal Reserve and the erosion of our manufacturing base over the last 30 years.

Bill. Most people don't see what's about to come or they are ignoring it. That's why I've been putting my ducks in a row to get ready for the ride.

the headlines in DG's book PFRERN!

"Real Estate Woes Seen Worsening; Commercial Values Expected to Plunge in Next 2 to 3 Years"

"Housing in Ca. seen Worsening"

etc. etc.

those are headlines from 1988 to 1992.

Haven't you read DG's book BARM? these are inevitable cycles!

It's a good time to get some deals, not the time to panic and run! Regardless of the economy, investors should always do their due dilligence, and have an exit plan...

wishing you success,
Valerie

You are so right. Have you heard all the main stream media BS about the American dream of home ownership being dead and people should rent. What type of left wing crap is that???
Just read a very interesting article stating the double dip already took place in the middle of April and there were only two major cities in the US showing depreciation at this point. The most was 2.8%. One was New York, the other Las Vegas. Miami showed 4.5 % appreciation this year.
The prices in Denver on average are up, wholesale prices are up. I know what Bill says is right on, except maybe the flood of foreclosures. This won't happen if we can DE-OBAMAIZE our economy and lower the unemployment numbers. There is hope! I just HOPE we don't get the CHANGE that Bill predicts. Obama wants to get elected again so I predict he will pretend he is a capitalist for the next year or so. The "SHADOW INVENTORY". All the REOs the banks are already holding are going to be released in a trickle to hold up housing prices and because they don't NEED to release them. They got a bunch of FREE GOVERNMENT MONEY(stupid like Bill said) why should they take a greater loss when they can avoid it?
I WISH they would release those REOs but I don't think it will happen.
How do we avoid all this? Know your market, buy right and have several exit strategies for each deal. Now is the time to get some great deals! Real investors are buying left and right TODAY!

One last thought. We the people elect congress. If they are still in there it is OUR fault. If they do what they do, Vote them out, if the next guy does it, vote him out. Get rid of all career politicians. We would actually have people in there that would stop corruption! Serve your time and go back to your career (not being a "community activist") OK off my soap box!

Go make an offer!!

Michael Mangham
MD Home Acquisitions LLC

I got started in 2005 at the peak of the market. Thats right. The very top. I bought houses every single month since that time period (except 2 months June 2006 and July 2006). I've done literally hundreds of deals since then. Many of those deals were done in 2008. The investors that think a falling market is bad just don't understand the numbers or are applying the wrong investment strategy. Most of the houses I bought in 2006 and 2007 I sold for a profit in 2008 or 2009. How is it possible to sell houses for a profit when the market keeps falling? The answer is simple...keep buying them at a massive discount from todays market value and sell the house where the market is going and not where the market is right now. It does not matter if the market is trending up, down, or sideways if you buy a house at a massive discount.

I really hope this market continues to fall and banking regulations stay tight, if not I have to compete against the retail buyers, of which, are a smart investors biggest competition.

If you don't believe me then your only other choice is to wait on the sidelines until the market is really good again. At that point you can jump back in like all the suckers did in 2004-2006 and then buy above market value in hopes the market will continue to go up. Your choice.

Listen--It does not matter if the market is on an upward trend, downward trend or sideways market if you pay too much and your investment can't be liquidated quickly (assignment of contract, double close,or flip) or maintained as a positive cashflowing asset (rental, lease option, or land contract).

Always invest using fundamental analysis not technical analysis because if you are wrong with your technical analysis then--you lose.

Get it done!

enjoyed reading your post! and you are right about having several exit strategies!
I see houses flipping around here like pancakes! so somebody is making $$ in real estate out there!

Wishing everyone success,

Valerie

If you know what the market is doing, then you can adjust your strategy accordingly. If the market is going down, we need to know about it. If your market will lose 6% over the next year, we can estimate how much loss we will take over a four month flip period. (2%) We can then incorporate that loss as a cost to our deal. If the FMV or ARV today is $150,000.00, then we know that when our flip is done it could be worth 2% less than that. That is the price we will use in our calculations for our offers. NOT todays market value.

The other thing to consider, is that there are always people who are willing to sell property at price points that have absolutely no relationship to the market. Their sales prices may not make sense in any rational analysis. But if it is an estate sale, a divorce situation, or a job loss situation, people don't necessarily make rational decisions!

So, just like Matt said... get out there and get it done. Understand your market, and know what direction prices are heading, incorporate that knowlede into your analysis, and get a deal done! People are doing it successfully every day!

Happy hunting!

that focuses on the ability to make money from real estate in good times and bad BUT.....this time is different for macro-economic reasons. I would be the first person to tell anybody that it is possible to make money in most markets; and I think for SOME on this website, that is the case. Some of us have had an ongoing business for a number of years, our network is fully developed, our understanding of real estate concepts are excellent and we can calculate the risk/reward of any deals pretty quickly.

But because of the upheaval in the real estate market, the lack of end buyers, the shadow inventory of foreclosures, the ongoing banking crisis, the globalization of the economy, the lack of political leadership, the extended nature of our country's deficit, the fact that unemployment isky highgh, and many other factors; I don't believe that most readers on this website "get it" as they don't have a reference point.

Sure buying real estate at 65% is a great deal, but not when the market is still moving lower and eats half of your margin. The currents in this river are swift and you must remain nimble. You must have an exit plan. You must have Plan B (also C, D, E and F).

I think real estate is one of the greatest opportunities in the world but if you buy in a lot of markets right now, you better be willing to absorb a downdraft in prices, especially if we double dip.

Remember, the Great Depression was also a buying opportunity for those folks that could hold on FOR OVER TWO DECADES. Jump on the bandwagon today if you can do the same. Or be VERY selective, do your homework, network and build power teams, educate yourself in other channels to learn more.

And for the record; I hope I am wrong about the US economy and things get better next year. That would certainly be nice for my plans. But I am planning for a very bad time ahead as I think we haven't seen nothing yet.

it was just an article that i found interesting and thought I would post. No where in the article does it say you can't do this or you can't make money now. It was just to keep people informed of what's going on in the industry. I happen to be out doing deals as we speak so I know the deals are there.

LOL.......Thanks for the clarity of what the post was meant for shaun, sometimes it just go in a total different direction.

Thank you everyone here for all the information. It's great to hear experienced investors knowledge and opinions. Thank you!

Cheryl & Dave

I hope your right. The more problems the US is going through is just more opportunities to make even more.

I have made over $50,000 in the last 14 days from double closings and assignments of contracts. Those were not buy and hold (and pray) properties.

Waiting for properties to go up is not the reason to invest.

Fact: You can make money no matter what the current market conditions

Get it done!

Go Faster!

Shaun,

thanks for sharing,

Wishing everyone success,

Valerie

I very much appreciate your initial intention but I especially love that it brought about a whole lot more information and insight and open discussion. This is what helps people to grow and learn and acquire new insight. We are in the people business and I have lots to learn even at my age. This has been a great discussion and has added value to the site. Thanks again. Your post is helping others.

Thanks for sharing your insight. I am very appreciative.

I think this is a great post from every angle. Times are bad yes and it may get worse. But we can all still make money and profit from real estate if we do our home work and have a plan. The ones that will be hurt the most is the ones that do not take the time to educate themselves about REI.

Great post Guys.

Steve.

I really appreciate the info. I'm a newbie to this REI, but after reading Dean's books, I am interested in doing assignments. Maybe that's because I don't have a lot of money.