Is Your Market Rising? What NOT To Do In a Rising Market!
From Tom Nardone, Millionaire Mailman …
If there is just one thing that is absolutely certain about the real estate market, it is that it will go up, and it will go down.
The one thing you are assured of, if you are focusing on wholesaling, is that you can always tie up properties under contract and get out of them with little or no risk if a market turns downward very quickly.
I have been in markets that have doubled in just 2 years, (and I saw it happen twice within just the past 10 years). And I have been through markets that have come to a total stand still in just 4 hours. (Yes, a bad hurricane can stop an entire market in just 4 hours.)
Up or Down
The good thing about wholesaling is you can make money in an up or a down market.
You are never in the market for any length of time, so it’s easy to stay very liquid and get out before anything bad can happen to you.
Compare this to having a rehab business where you are rehabbing 5 or 6 houses at a time...
In the 6 months it takes you to rehab and retail a house, you might not be able to get out in time if there is a sudden downturn.
And for the buy and hold crowd, (I’m one of ya) having houses leveraged at even a safe 50% can suddenly leave you upside down in the event the market crashes, and then suddenly corrects by 75%... and the once safe 50% equity you had, now makes you a short-sale candidate. (Yeah, been there, done that, too.)
Keep on Wholesaling
So wholesaling is the one activity that is steady and certain, and the thing to do in a rising market is to NOT STOP wholesaling.
Let’s face it, wholesaling creates small chunks of cash in a relatively short period of time. Cash is the gasoline that keeps your business running, and steady cash flow is important.
In the wholesaling business model, your biggest and most important expense is your marketing. A relatively small expense compared to rehabbing 5 houses at a time where you can have $50,000 to $75,000 monthly going in and out of your account for labor and materials.
So enjoy the ups as well as the downs, because whether there are good times or a crisis, there is opportunity.
And in the event there is another crash in the future, a good crisis is terrible thing to waste!
Enjoy the Journey!
Thoughts, Questions, Ideas…
Talk to me… I wanna hear about it in the comments section below.