Rich Dad says that educated investors can make money when the market is up and they can also make money when the market is down. As a real estate investor, I have been watching the nation's house market slump.
According to sources like MSNBC, the supply of existing and new homes is enough to last the entire year. And there is no end in site. I agree with the opinion that there is no end in site. With 2 and 3 year ARMs coming due, we are going to see an even larger supply of existing homes enter the market as homeowners cannot afford their mortgages anymore and try to sell, or worse, get foreclosed upon.
The only thing that will stop this surge of un-affordable mortgages and foreclosures is if lending institutions retain the same rate on home mortgages when the ARM comes due. Will this happen? Probably not.
As a real estate investor, you should be able to see opportunity. When the housing market is down, you should be buying up properties at reasonable deals. This particular slump will not give way to incredible deals as most homes/foreclosures will only have 2 years of equity. All the current homeowners will be downgraded from owner to renter. My advice is to purchase homes so that these new entries into the home rental market will have a home to rent.
My advice to real estate agents is to focus on investors during this slump. Educate your area about the rising opportunity and create new investors that will look to you to find a good deal!!
For more information about Financial Freedom through investing, I recommend Cashflow Quadrant: Rich Dad's Guide to Financial Freedom.