Tornados Are Local — So Are Down Real Estate Markets — Profit From It
Posted @ 12:16 am - Filed under Purposeful Planning, Financing, San Diego Property Owners, Real Estate Markets, Builders, Market Correction, Economy, Texas
I was thinkin’ today about the national economy, and how the third reel of this sequel to the “We’re All Gonna Die” franchise is indeed followin’ the script. The tension finally reached a crescendo, and all the major characters suddenly showed up as if instructed by an invisible director. Friends and foes alike are now on TV singin’ from the same songbook and same song, if not always the same verse. The posturing by politicians of both sides is the Achilles Heel of this movie, as even first time movie goers, new to this franchise, can sense the false notes being sounded by many of the actors.
Behind the scenes you can imagine the panic as so many of them shed their brave fronts while lookin’ to the calm, experienced leaders with the real power to take charge. The real power is now tellin’ the faux power how it’s all gonna shake out. It’s been like this since one man had power over another. But I digress.
No matter where twisters show up, weak or strong, they’re local in nature. There are no exceptions, nor have there ever been. Real estate behaves similarly. Grand Rapids, Michigan can be depressed, while Mesquite, Texas is thriving. This dichotomy can exist in times both boom and bust. It’s quite a paradox at times, to say the least.
See? Local in nature. If yer wondering why you haven’t heard about some of the regions currently kickin’ major booty lately (that’s a technical real estate term), it’s ‘cuz the LameStream media doesn’t think it’s worthy news. Go figure.
Here’s another poser for ya. Why, in certain areas, is builder confidence up nearly 20% lately? Why are some lenders workin’ themselves silly to bring new investor loans to certain select markets? Why indeed. We all know why. They smell profit. When it comes to builders building and lenders lending, they share a very positive attribute with the great white shark — they smell profits miles away before anyone else does.
Now before ya go off about the current lender/builder mess, let me explain. I’m talkin’ ’bout the astute lenders who still have their pants on, and not around their ankles. The builders? I know the media hasn’t told ya, but I’m tellin’ ya now. There are a few out there whose product has never stopped sellin’ from the first day this correction began, and continue to do so now. There are places where some builders, starin’ each other down, are literally about to get into legal fist fights over large pieces of land. In one case, I know the principals.
In a conversation Wednesday afternoon, I learned a lender, (must remain anonymous for the moment), who is about to allow my clients to buy as many real estate investment properties as they wish. Let that sink in for a minute. How’s that possible? Are they nuts? Why would they even consider implementing that policy, and on their own to boot?
As usual, the answer to this question isn’t complicated. They smell profit. They know what’s happening in their neck of the woods, and it’s been goin’ on for quite awhile now. They’re tired of being restricted by the secondary market and it’s choking underwriting regulations.
It’s their money, and they’ll lend it where they see fit. And there it is. They’re not gonna sell loans made to our clients. They’re keepin’ ‘em. It’s not like the lenders who loan a buck, sell the loan, then loan the same buck again, over and over. Nope, these guys are doin’ it the Old School way. My kinda guys.
Think they’re the Lone Ranger? Not even. Find the regions where quality product exists along with the empirically provable demand for it, and you’ll find a lender knockin’ on yer door with a wheelbarrow full of cash. These lenders realize they’re in the eye of the perfect local storm, and they’re not gonna be caught five years from now lamenting their lost opportunity.
BawldGuy Axiom: (As I write this, I’m almost laughin’ out loud.) Rain falls down. The sun sets in the west. And….wait for it…..here it comes…..Lenders lend.
The builders I mentioned? They’re just a couple weeks or so from breakin’ ground — again. Meanwhile, back at BawldGuyRanch, the LameStream media is sellin’ ad time while they peddle fear, panic, and meltdown. Surprise, surprise, surprise.
By the way, the part of the highly revered billionaire investor who writes a three comma check for a stake in an ‘endangered’ industry’s company is being played this time around by Warren Buffet, who’s obviously playin’ himself. Sure, he negotiated what understatement would describe as a sweetheart deal with fabulous terms. Still, ya think he’d put $5 Billion into Goldman Sachs if he thought it was in danger? Really? Mr. Buffett is a lotta things. Here are two things he definitely isn’t: stoopid, or a gambler.
But again, I digress, though it was fun.
As a real estate investor yourself, or if you’re thinkin’ of investing for the first time, you are now living in what the Chinese have called ‘interesting times’. Those who recognize real opportunity when they see it, are investing in the few regions around the country that have proven already they’re ahead of the curve.
Is the current economic crisis like a tornado? In terms of real estate and lending it sure is. Would I tell ya to invest in real estate located in hard hit regions like San Diego? Perish the thought. But this economic tornado hasn’t and won’t touch down over the entire country. I’ve seen this movie three times before, and all three had windows of opportunity both chronologically and geographically.
This one isn’t any different.
That’s my way of sayin’ the time is now and I know where to invest in real estate. The supply is not infinite by any definition. Lenders want qualified buyers in the Old School tradition. But the gettin’ is good, and now’s the time. When lenders are knockin’ on your door with cash, you might wanna take the hint — know what I mean, Verne?
In order to create your personal perfect storm, here’s what ya do. Begin a conversation with me, and we’ll Purposefully Plan your retirement within an inch of its life. 
I’m lookin’ forward to talkin’ with ya. Have a good one.
This entry was posted on Thursday, September 25th, 2008 at 12:16 am and is filed under Purposeful Planning, Financing, San Diego Property Owners, Real Estate Markets, Builders, Market Correction, Economy, Texas. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
