Is now a good time to buy?

By Joel Persinger
YourRealEstateDude.com

This past Friday I had lunch with an investor friend of mine who regularly buys distressed properties. We were having a meeting to discuss the work my agents are doing in finding such properties so that his investment group can buy them, thereby helping our clients get out of there financial binds. During our conversation some interesting subjects came up. I thought you might find one of them interesting.

The investor was telling me about some of the networking groups he had been part of over the years. He was helping me identify some potential business opportunities. Right in the middle of a sentence he paused, looked at me with a puzzled expression on his face and said, “I can’t believe how much some of these groups have shrunk in the last couple of years. All those people who were so excited about buying and selling a few years ago are gone.” I asked, “What about you?” He said, “I’m still in. I’m glad their gone. It makes things easier for me.”

When I was a boy my grandfather, a long time real estate investor and broker, asked me what I thought would happen if my grandmother’s favorite department store had a sale. I replied, “She’d be there all day.” Then he asked me what I thought would happen if that same store raised its prices by half. I said, “She’d never go.” With a giant smile upon his face, he exclaimed, “Exactly! And yet, people do precisely the opposite when it comes to real estate. Remember that, Joel. That little fact about human nature will serve you well some day.”

My investor friend was expressing amazement at witnessing the same phenomenon that my grandfather had taught me about forty years earlier. When prices go up, people scratch and fight for the chance to buy real estate. When prices go down, they all sit back, holding tightly to their wallets and wait for prices to start going up again so they will feel safe enough to buy. If you take a moment to apply that way of thinking to the supermarket or department store as my grandfather did, you will quickly recognize the insanity of that approach.

Whenever I point this out, many people say, “But, you can’t find any deals in this market!” You should know that I’ve been hearing that same statement for my entire career. Indeed, I heard it a number of times from those who were watching my grandfather make money in troubled times forty years ago, while at the same time denying that it was possible for him to do so. Even my investor friend said it at lunch the other day. But, unlike many others he didn’t forget the most important part of the statement. He said, “You can’t find any deals in this market, unless you know how.”

This brings me back to another lesson my grandfather drilled into my head from the time I was six years old. Over and over he would remind me, “Joel, you don’t have to be smart. Just hang around smart people.” So, if people are telling you that finding a deal in today’s real estate market can’t be done, you are hanging around the wrong people. I encourage you to take steps toward meeting people who know where the deals can be found and how to find them. Because, the fact is that now is the time to buy!