| The king of real estate's cashing out |
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forexdaytrading
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| The king of real estate's cashing out |
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Tom Barrack, the best real estate investor in the world, is selling all of his US real estate.
Check the article below:
http://money.cnn.com/2005/10/21/news/newsmakers/barrack/index.htm
I know what a lot of real estate fanatics are saying, "He does not know any better!" "He just wants prices to drop so he could buy!" "I have made money in the real estate market; I know more than he does!" "Prices will not drop; they will just go up slowly and real estate will still be the best investment around!" Blah, blah, blah... It all sounds a lot like the excuses of stock investors (or should I say, "gamblers") leading to the 2000 stock market crash.
Well, let me not get all negative. Some people are really sensitive about these things. Let me change gears and provide you with some humor. Check out the latest household products ad:
forex-day-trading.com/Graphics/mr-housing-bubble.gif
 If you actually care about meaningless topics such as "bubbles," "crashes," "overvalued markets," and the like, please join us during our free monthly webinar (live) on Tuesday, November 2nd by using the registration link below. If you don't give a damn, then just keep doing whatever it is that you have been doing up to this point. Don't worry; nothing is going to happen. Just stay positive and repeat over and over, "I think I can. I think I can. I think I can..."
forex-day-trading.com/forex-online-registration.htm
Last edited by forexdaytrading on Thu Nov 01, 2012 3:34 pm; edited 1 time in total |
Wed Oct 26, 2005 4:14 pm |
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bong12187
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| Re: The king of real estate's cashing out |
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I know where he is coming from. I am buying my last property this year then I will hunker down for awhile. It is so hard to find a bargain at this point with so many speculators running around. I'll use this time to genarate cash for reserve so that I can be ready for the next drop.
This is exactly what he is doing. Selling as much since everything is so expensive. Then buy low when the drop actually takes place.
Don't get me wrong, there are still bargains out there but it is like going after a girl assigned in an aircraft carrier. You have to give more to get some. I'm not willing to do that.
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Thu Oct 27, 2005 2:11 am |
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forexdaytrading
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bong, the problem with buying the dips or drops is that the length of time that prices could continue dropping is uncertain. Most people that love real estate argue that the drop won't last long, but this is wishful thinking. The reality is that conditions are such that a multi-year price drop could easily take place. Look what has been happening in Germany and Japan for many years already - housing prices just continue dropping year after year following a speculative boom. This could easily happen in the US as well.
When stocks started dropping in 2000, many people bought more assuming that the prices where going to jump right back. The problem is that when there is a lot of excess speculation and debt in a market, prices don't jump back and can drop for many years. Investors are always waiting for prices to drop to get in. This is human psychology in action. We assume that because prices where once at 100, they are a bargain if they fall to 80. This is faulty logic. Past price levels do not guarantee future prices; especially if prices where way over their intrinsic value to begin with. It is value that's important - not price.
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Sat Oct 29, 2005 1:52 am |
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bong12187
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Forex, You are right. Real estate as an entity is a slow moving vehemoth. What I mean by this is that you can really see the rise and fall of it. When the market crashed in 2000, the feds immediately dropped interest rate to help spur the economy by attracting investors to borrow. Note that at this time, everyone was selling and there are more supply than demand. I would encourage people to not start buying right away when they see a bust in real estate. They should wait and get to know the market and continue to increase cash. Those speculators who bought hoping that the market will go up did well only if they have enough cash reserve to keep them going.
I do not have that luxury. This is the best time to buy properties that I think will appreciate in value but the main thing is for positive cash flow. If the cash on cash return is not there before you buy a property during a bust, you might as well not buy it.
Bottom line, know your market before you move in. Estimate your current situation and see how far you can support your purchase without getting anything in return. This way, if you end up keeping the property for several years before the tide turns again (and trust me they will), you don't end up selling them at a loss or just to break even.
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Sat Oct 29, 2005 11:29 pm |
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forexdaytrading
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quote:
Real estate as an entity is a slow moving vehemoth. What I mean by this is that you can really see the rise and fall of it.
I disagree. In the last 8 years people have gotten used to continuously increasing real estate prices at a very drastic paste. This is way off from the historic norm. It is all due to speculation; not population growth and not building cost increases. If we get a constantly dropping real estate market for many years like Japan did after the 80's speculative boom, very few people will be ready for this. Most people are in a comfort zone and believe that prices can't drop too fast, or can't drop too much, or can't drop for too long. This is more self-delusional than anything else; similar to what happend during the US stock market bubble in 2000 and in many other countries around the same time. Check out the chart below:
forex-day-trading.com/Graphics/japan-real-estate-bubble.gif
History will tell how many sheep will get slaughtered this time around.
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Sat Nov 05, 2005 3:17 pm |
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