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When a Real Estate Agent May Not Be The Best Option By: Chris Cates: Historically, when homeowners wanted to sell their home, the first call made would be to a Realtor. Since the early 19... in recent years is that even when the home is in great condition, there may be little or no equity. This problem will b... Real Estate Property Management Software By: Oliver Webber: What is real estate management software? If you own three or more real estate properties, managing them takes a lot of... thirty or even three hundred. With a few mouse clicks you can select a property and check its status. It's also possibl... Real estate software for Palm PC By: Oliver Webber: How can Palm PC be useful for real estate professionals?A real estate professional may discuss business matters with a... in your Date Book along with information from To Do List. Making notes in any of the application you can add contact in... Real Estate Investing By The Numbers By: Mark Walters: Real Estate Investing By The NumbersJust like most things real estate investing can be broken down into easy to learn ... every week you just won't be able to buy houses. Time and again we've seen people with just basic knowledge of one or t... How to Build a Real Estate Investing Power Team By: Adem Hamidovic: As you continue to read about real estate investing, you will no doubt come across the term 'power team'. What is this... this technique not only netted me a power team, but also a list of potential partners/buyers for future deals.The local... Booming Real Estate Profits From Baby Boomer Investing Chris AndersonIn last week's article, called "Irrational Exuberance, Part II?," I discussed some of our concerns about what is happening in the preconstruction investment real estate market. What many people have asked me is "if you're so concerned about the real estate market, then why invest so much with yourself and with the preconstruction MasterMind Group?" The answer to this is really quite simple: we find preconstruction projects that make complete sense EVEN WITH the current market conditions. Many people think about the markets as one big entity and you either decide you are in or out. In preconstruction real estate, this is dead opposite of how we think. Instead, we look for preconstruction investment opportunities that make complete sense in this market and then, if we are wrong, we look (in advance) for ways to exit with our skin still attached. In this week's article, let's explore such a scenario. If you have been on one of our teleseminars, you have probably heard me speak about the "Baby Boomers" and the impact that they are EXPECTED to have in the southeast and the southwest. Without getting overly technical, here is the short story: " We have an incredibly large % of our population moving towards retirement age over the next 15 years; " A large % of these people have no intent on staying in their current locale; " Even though many boomers are ill prepared for retirement, there is still a significant % of people with tremendous wealth; " These people want to live in places with good "lifestyles. With that body of knowledge above, you can make great preconstruction investments however most people want to overly complicate things. So let's look at a typical conversation after someone has been exposed to baby boomer investing. Q: How do I make a good preconstruction investment with minimal risk? A: Well, from above, it really is pretty simple. Find a place that the boomers want to live, then buy, and wait. Q: But what if the price drops because of all the investing going on right now? A: If you believe you truly have a place that boomers want, ignore it and ride it out. With that many boomers (demand) looking for so few properties (supply) in a few years, you will likely do just fine. Q: So when will I see a good return on my preconstruction investment? A: I don't know. Maybe this year, maybe 10 years depending on what you buy, market conditions, etc. From the baby boomer investing mentality, we just know that there is a large PROBABILITY that somebody is going to want that property badly within a 15 year window. Q: But I don't want to wait that long. How can I get in and out in a couple of years or less? A: Well this is a horse of a different color. So not only do you want to invest in the boomers but you want to time when they are coming. That is a little harder but still doable. Now what you are saying is that I buy now and once I buy, for some reason a lot of boomers start jumping at the chance to buy in. The only way I know this can happen is if for some reason, there is a lot of people suddenly going to become aware of your property. In this case, you are strongly relying on somebody's marketing to bring "eyeballs" to your preconstruction investment. Q: Is there risk in this type of shorter investment? A: Of course. You could buy in, and the lending rules change, or suddenly we start seeing horror stories in other regions about people losing money in real estate, and then on a short term basis, your preconstruction investment may decrease in value. As they like to say on Wall Street, that is not a loss until you sell. If you truly believe in the longer term, then your decision might be to exit quickly or just wait until the boomers start looking where they are going to live. To me, it is very comforting that I know that I have that backup plan. Q: What kind of preconstruction properties am I looking for? A: This depends on the wealth category you are seeking but suppose we are targeting wealthy but not super rich. The best way I know to do this is imagine that you have just closed out all your real estate investments in a few years and you are worth $5 Million. Where would you like to live? What "lifestyle" would you want? Would you be near water, or golf, or mountains, etc.? Now if you know you don't think like most people, you may have to alter a little bit and try to think what the majority of people would want that are worth maybe $1 - $10 million. Realize that these people want homes for the most part. If you wanted to play this, then purchasing either raw home sites (land) or the finished home may make sense. Q: Can you give me an example? A: Sure. In the MasterMind Group, we just introduced a preconstruction property in the North Carolina mountains and we just finished our Boots on the Ground work there. The mountains are certainly a draw to many people. When we first got on location, we saw lots of other properties that looked like nice places that good be purchased for ½ of our target investment. Some of these had great views on nice lots. Quite frankly, we were a bit concerned. Once we had gone to the property, our perspective changed 180 degrees. We were taken to see a preconstruction development that spans multiple mountain peaks and truly has spectacular settings. Each future homeowner will have large 2+ acre lots that are extremely private. In addition, there is an extensive effort to keep this development completely natural (no lawn mowers----YEAH!!!). While hard to describe in a paragraph, this property is unlike any that I have seen before. When you go on property and get the full picture, I have no doubt that you could buy and hold this for 10-15 years and make a great return. However, there is a twist. It turns out the developer is really good at marketing but better yet, they are getting free exposure that is expected to bring over 50,000 people ON SITE during the next year. Ok, this might be a property you can buy now and sell for a tidy profit in short order….. If you're wrong, then just hold it a little while longer. Q: That sounds nothing like a preconstruction condo? A: That is correct but the concept is the same. Get into something where you are confident that a lot of people will want it down the road, manage your risk, and hopefully make really strong investment returns. As you will see in upcoming articles and project announcements, we think much more broadly than just preconstruction condo's and we encourage you to do the same. In our opinion, the baby boomer market acts very differently than the "investor market" and right now, we believe there is lots of preconstruction opportunities in the right kinds of properties. Dr. Chris Anderson is a co-founder of www.GetPreconstructionDeals.com and is referenced in many venues including the New York Times and USA Today. Get a 3 month trial to his Mastermind Investing Group at GetPreconstructionDeals.com.
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