Self Help

Real estate values run in cycles. While the length of such cycles varies, they will often be 5-6 years in duration. By this we mean that real estate prices will rise for 5 or 6 years and then begin to fall. But they almost never fall to the level they were before the rise began.

So if you buy when prices are falling (called a “buyer’s market”), you’re almost certain to get one or more bargains for your money. What’s more, when you buy during a price decline, the following happens:

1. Zero cash deals, where you do not put in any of your own money, are much easier to work out.

2. Sellers will take back paper, that is, accept a mortgage from you (a promise to pay money over a period of time) in place of a cash down payment. This is called a purchase money mortgage and can be for the entire amount of cash down needed or for part of it.

3. You can get the asking price reduced much more easily when you’re in a buyer’s market. Sellers want to get out. You can help them get out - at a price that’s a bargain for you.

4. It’s easier to find the gemstones of real estate, namely, high-quality assets in superb locations when prices are declining. These gemstones will almost always rise in value as time passes - increasing your wealth while you sleep. Be sure to look for a return of at least 15 percent on the cash you put into such properties. Of course, if you put down zero cash, your return is infinite - that is, beyond measurement.

5. Internet listing of desirable properties increase. Now you can use the Internet efficiently to search for attractive income properties. Various Internet sites show exterior photos, floor plans, interior views, and key financial data for each building they feature. These websites allow you to review (and very quickly) many properties in a short time. Yes, the computer is helping us in real estate and it can save you time and money when you’re searching for good properties to buy.

Final Tip: Get Positive Cash Flow Every Time! Never buy a negative cash flow property - one in which you’ll have to shell out money every month to keep it from going into foreclosure. You’re much better off with no property! While you may be anxious to get started, a negative cash flow property is not the way to take your first step in real estate.

There are positive cash flow properties in every section of the country, and the world. But you must work to find them. Do this by looking every day you have the time. And do not give up! You will find the property you seek.