Real Estate Investment Isn't So Great right now
In a recent article, W Ford asked 'If real estate investing is
so great, why isn't everyone doing it'?
Ford says:- Oh, that's an easy one. I can answer that in one
word. FEAR. Mortgage down say - over the long term, the stock
market has massively outperformed real estate. In fact, real
estate over the last 200 years barely beats general inflation.
Ford says:- Real estate investment is a great way to change just
about everything in your life, but it's one of those things
where doing it for the FIRST time is the toughest. In fact, the
second is exponentially easier! MortgageDown say:- Timing is
everything. Sure, if you get in at the start of a boom ,you'll
probably make money. A rising tide raises all boats! BUT...Get
the timing wrong, and the same leverage that works FOR you in a
rising market will bankrupt you even faster in a falling market,
like now.
Ford says:-- "Everyone knows that the surest path from low
income to millionaire is through real estate." This appears to
be a well-documented truism. I've seen a similar statement in
some of the most prestigious financial resources on the planet.
Mortgagedown say:- Bill Gates, Henry FORD, JP Morgan, nope,
that's right, they DIDN'T make their fortunes in property. To
make SERIOUS money, you generally need to add value in some way.
Just grabbing as much property as you can and renting it out
doesn't really add anything to society. In fact, it might more
properly be described as being 'a lazy parasite'
Ford says:- I rarely hear of someone losing it all from real
estate. MortgageDown say:- Try listening a bit harder! Repos
rose 60% in the last quarter! Prices are falling, and overgeared
folks are in BIG trouble! Ford, you really are living in La-la
land!
Ford says:- There are a lot of properties available. Folks are
still divorcing, dying, or just not paying the bills and getting
foreclosed on. Much of the foreclosure activity is not SEEN by
the public, but most of it is available to the public.
Mortgagedown say:- Nice. Contradicting youself in the same
article. Foreclosures bankrupt people, in case you hadn't
noticed. So how can you 'rarely hear' of people going bust from
property, then claim there is 'tons of foreclosure activity'?
Mmmm. Ford must be a realtor, to be unable to grasp such a
simple concept.
Ford says:-There are a lot of properties available at below
market prices. Mortgagedown say:- the myth of 'BMV' is a hoary
old chestnut indeed. No one hands out $10 bills for $5. Anyone
who tells you otherwise is either stupid, a liar, or both. Mr
Ford may want to consider that today's 'Below Market Value'
price is actually tomorrow's MARKET PRICE! That's what the
property sold for! How can it do ANYTHING apart from set the new
'market price'??? Muddy thinking from a desperarte estate agent
methinks...
Ford say:-Rental demand is strong and rents never go down!
Mortgagedown say:- Untrue. Rental demand is falling off as
people tighten their belts. Many folks are living with relatives
far longer. The states are FULL of new build 2 bed 'luxury'
condos that the hopeful wannabe landlords cant rent out AT ANY
PRICE. And those who DO have tenants, find that they have to
lower the rents at each review in order to keep the tenant.
Ford says:-So with all this common knowledge and raw opportunity
out there, why isn't everyone investing in real estate?
Mortgagedown says:- its obvious, to anyone except a half wit.
House Price inflation has collapsed, house price deflation is
just around the corner, and anyone with any sense is 'keeping
their powder dry' at LEAST until the end of 2008 or summer 2009
when the cycle might stand a small chance of reversing to 'boom'
mode again.
Ford then goes on to say that the reason EVERYONE isn't joining
the crazy house pyramid scheme that is now unwinding all around
us is... FEAR!
That's right folks. You are a coward. Unless that is, you buy an
overpriced condo in a ludicrous unrentable location and help the
previous owner/developer escape from the prospect of imminent
financial disaster. Go on. You know you want to. Save someone
else and ruin your own life! Ford no doubt also thinks you are
ugly as well as chicken, although he doesn't say so in his badly
written misinformed 'article'.
Ford claims to have the following motto:- "Knowledge Always
Precedes the Money." In fact, the money leaves just as knowledge
spreads. Hence the expression 'SMART MONEY'. We have NO idea who
Mr Ford is, but sincerely hope that if he has followed his own
advice, he has some rich Granny somewhere to bale him out soon!
If you want even more laughs and a look at how desperate 'vested
interests' try to control the housing market with
disinformation, try heading over to Ford's actual site - the
hilariously titled Rehab-Real-Estate.com.