Right now, we’re going to talk about real estate investments. What should you buy? Thank you so much for tuning in to the Real Estate Today Podcast.
I’m Bob Nelson, real estate investment broker with Pacwest Real Estate Investments.
Bob Nelson: On occasion, I will be asked by others, “What should I buy?” And it’s an interesting question, especially those that attempting to protect their net worth by going into a tangible asset that doesn’t have a tendency to blow out in the event a corporate decision is made that was not favored by the market and all of a sudden my stock is worthless or worth a whole lot less. The chance that that happens to real estate is not, I’m gonna almost say it’s non-existent. There is no such thing as non-existent, but it’s about as close as you can probably get.
It is an interesting thing. If I look to generate the investment benefits available from real estate, that would be cash flow, the fact that as I make a mortgage payment it reduces the debt which increases my equity, and also it goes up in value a majority of the time. There are periods where real estate values have rolled back. For those of you that remember 2009, for those that are a little older, a little longer in the tooth, you probably remember 1982, 1983, those were periods of time when real estate was selling very slowly, and because, well, it was a market induced situation in 2009.
Mortgage lenders were allowed to make loans that were stupid to begin with and guess what? The chicken came home to roost and a bunch of foreclosures occurred. When the foreclosures occurred, the lenders ended up in ownership of a bunch of real estate. They dropped the prices so that they can sell that to get back into a cash market and as they’re selling low, the long and the short of it, the rest of the market, the dominant market being the lenders, offloading foreclosed asset, if they’re selling low you’re going to be selling low also.
Now the only people that get hurt during those time periods are people who have to sell. Just remember that. If you are in a delicate situation where you’re just barely making it, and the market starts to turn you may not be making it. You better have a day job to support your investing habit.
Give me a call. I’m good as a real estate investment strategist. I can help you maybe with your thinking along that line.
I’m Bob Nelson. Real estate investment broker with Pacwest Real Estate Investments.
Join Bob Nelson and Marcia Edwards Eugene, Oregon, real estate experts daily at 5:30 on KPNW for the “Real Estate Today ” radio show.