As the CRE world turns... a decade+ in review. - Posted by Drew

import · December 31, 2010, 8:15am

Posted by David Krulac on January 03, 2011 at 08:25:11:

always a viable technique as well as flipping and rehabbing. All those techniques work in all markets up, down and sideways…

Buy and hold is the great wealth builder, and the longer that you own property the more wealth you build. In a rapid price growth era, it may have made some sense to buy property that was break even or worse. But not so today. positive cash flow is the key. And besides deferring capital gains taxes and transaction costs, buy and hold insulates the owner from the market and economic ups and downs. If you own a property for 20 years, you don’t care what the market does during that time frame as you are not selling. The book Buy And Hold by David schumacher is a great read on the subject.

Flipping and rehabbing have been around forever, maybe without as much fanfare as in recent times. In 1959 William nickerson wrote his book “How I turned $1,000 into $1 million Is Real Estate”. the book tells how he bought a place fixed it up and sold for a profit and moved on to another property. He said you should get a $2 return for every $1 you spend on fix up. He was right on then and is still right on now.

Right now is a great time to buy, not so great time to sell, so its a perfect time to Buy and Hold. Itsa buyer’s market and has been since the peak in 2006. so what are you waiting for? From my 4 decades of real estate investing I’ve always felt that you should not wait to buy real estate, buy real estate and wait.

import · December 31, 2010, 8:15am

As the CRE world turns… a decade+ in review. - Posted by Drew

Posted by Drew on December 31, 2010 at 09:15:50:

Well, that was interesting! It’s been 16 years since I
bought my first property and it’s amazing to think of
everything that has come and gone since then, for example:

Buy and Hold - remember when this was THE game? Long-term
wealth accumulation through cash flow and appreciation.
Haven’t owned any RE for the past 3 years, but I’m seeing
things around me that point to this being the main game
again.

Flipping/Rehabs - this has always been around, but was a
minor play in the CRE universe until about 2000 when lending
standards went wacky. Then anyone that could order a course
on line jumped in… and didn’t know when to stop.

Sandwich Lease Options - all the rage for a couple of years,
I think they are extinct now.

Gurus - 10 or 12 years ago on creonline we had a handful of
legit gurus. Vaughn, Garcia, Behle, Bronchick, etc… all
with actual knowledge and experience, along with the bumps
and bruises that come with the process. Then this place was
cranking out a new self-promoting “all hat no cattle” guru
per month. I won’t name them here or even try to guess
their true gender (yeah, I’m going for a cheap laugh on that
one), most have flamed out, blinded and crushed by their
hubris.

A Job - this was something that was really cool to have in
the '90s because it kept you afloat while tending to the
rentals and meant you could borrow money. Circa 2000 it
became a bad word as did the term “college educated”. If
you had a J-O-B after 2000, you were clearly a loser that
couldn’t make easy money flipping 10 to 15 properties each
month. This is what the newly minted gurus told you, so it
must have been true because they were flipping 10 - 15
houses per month (usually to their uninformed students).

Despite profiting from the whole financial mess, as I’m sure
many other investors here did, there’s something very
satisfying about getting back to normal. Normal being that
there aren’t bandit signs on every pole, people at work
don’t tell me about their great investment property that’s
3,000 miles away that their brother-in-law hooked them up
with, average people (like me) having some focus and pride
in their profession instead of feeling like a sucker for
having a real job.

The bottom line of this post is that we’re back in an
economic environment where real estate investing is
advantageous to those with skill and patience. Personally,
I’m diving back in this coming year and looking forward to
it!

Happy New Year!

import · January 9, 2011, 2:59pm

Re: As the CRE world turns… a decade+ in review. - Posted by Faith

Posted by Faith on January 09, 2011 at 15:59:50:

What a great post, entertaining and informative!

import · January 3, 2011, 3:48pm

Re: As the CRE world turns… a decade+ in review. - Posted by Woody

Posted by Woody on January 03, 2011 at 16:48:20:

Time to blow the dust off that old Carleton Sheets course. lol