Becoming a Real Estate Opportunist

Becoming a Real Estate Opportunist

If you're interested in real estate investment, you may be wondering not only how to begin, but how to approach the housing market to achieve the best results. The answer is to pursue opportunity.

The Housing Market is Having a Tough Time

To be successful in real estate investment today, it's better to be an opportunist than an optimist. We aren't going to claim “now is the best time to invest in real estate”. However, if you're an opportunist, now could be a good time to invest.

Crisis can Mean Opportunity

One important principal Jason Hartman teaches is the principal that disaster often accompanies opportunity. Currently, a lot of money is being created because assets are cheap. There are a lot of factors in play with this concept which investors can take advantage of.

J. Paul Getty provides the advice “Buy when everybody's selling; sell when everybody's buying.” This quote comes with good advice, but, when applied to real estate, there are many aspects involved given real estate investment is a multidimensional asset. The fact of the matter is, when one market fails, another one

often flourishes.

The “Water Theory”

A good example of one market flourishing while another fails is California from 1990-1997. During this time, the California real estate market failed. At the same time, various other markets around the country, such as Arizona, Texas, and Georgia were doing quite well.

Jason Hartman explains this phenomenon as the Water Theory. The Water Theory states that if you spill a glass of water, it flows from the glass and hits the ground. Once it hits the ground, it keeps moving until it finds lower ground. Water seeks the lowest level, and, in a way, so does money. People naturally seek the lowest areas in terms of cost of living.

Essentially, as times are getting worse now, there are many real estate markets which are thriving. Income property is a multidimensional asset, and so it doesn't depend on appreciation with so many other things going on. Though you may see only one goal, it's important never to ignore all the

smaller aspects of real estate which can present both opportunity and disaster.

For this reason, it's important not to be an optimist when it comes to real estate investment, but instead to become an opportunist. By being an opportunist, you have the ability to look at the real estate market with objectivity to determine where you have the best chances of success. (Top Image: Flickr | {Guerrilla Futures | Jason Tester}

The Young Wealth Team