It’s almost overwhelming right now…everyone is talking about the pain in the market. The stock market just dropped again today…the banks in Canada are pulling some of their most popular mortgage and financing programs…the declarations of doom and gloom are hard to ignore. But, you should ignore them. Stay focused on your objectives, and find good deals!
Continuing on our theme from the last couple of posts:
- Buying a House at the Peak of the Market…a story from 15 yearsago, and
- Forget the market – Focus on the Deal
we bought the deal, not the market about 7 years ago. It was our first purchase together, and what a deal it was! It was a foreclosure duplex. The building was only 11 years old at the time and had potential for great cashflow. The market where we bought had crashed and this property had been listed for sale on and off for over 15 months. The price had dropped from $199,000 to $179,000 to $169,000 and then went into foreclosure.
We ended up getting the property for $159,000 and within 12 months, had a nice positive cashflow of $300 per month. Since then, the rental rates have almost doubled, and while the value has more than doubled, it hasn’t mattered because it’s all about the cash-flow. We “timed” the market well, but that wasn’t the objective. Our goal was to get a solid property that would cash-flow for us.
It has been one of the best purchases we’ve made and we are grateful we have it. Not all of the deals we have made have turned out as well (if you want to learn about our real estate investment lessons – sign up for our free newsletter at www.revnyou.com). Our objectives in real estate investing have changed a bit since then, but we are still looking for good deals. While we look for strong market indicators (future job growth, stable government, population growth, investments in transportation), we don’t look to buy into a market. We look to get into a deal. Stay true to your objectives and search for the deal, don’t try to time the market.