5 Simple Truths Every Real Estate Investor Should Know:
This Presentation is inspired by Benjamin Graham and R.N. Elliot I am not a stock trader. While watching the swings in the Real Estate Market. I realized Stock Traders deal with swings as part of their business model. Why not borrow their experience?
First thing: Are you an Investor or Speculator
Investors
Thru sound Analysis Investors acquire undervalued assets. Investors then return the asset to its true value. This is done thru thorough analysis that promises Safety of Principal and an adequate return.
Speculators:
Operations not meeting this requirement are speculating, Speculating is gambling
A lot of Speculators in 2004 thru 2006, Bought at market value with the expectations that market value would still rise
Many are still holding the bag
The Two Times You should not speculate
1.When you cannot afford to
2.When you can afford to
Simple Truth One
Real Estate is not a Commodity Trading or A Get Rich Quick Scheme Its a business you are choosing to be in the business of Real Estate Investing
Simple Truth Two
The Market is a pendulum that forever swings between unsustainable optimism
Which makes Real estate more expensive
And Unjustified Pessimism
Which causes Real Estate to be Cheaper
The Intelligent Investor is a Realist. Who buys from Pessimists and sells to optimists
Simple Truth Number Three
The Future of every Investment is the Function of Its Present Value. The more you pay the less of a Return You will obtain
Simple Truth Number Four
No Matter how careful you are. You can not Eliminate Risk an Intelligent RE Investor Insists upon a Margin of Safety Do Not over pay. No matter how exciting the Investment is OR the PERSON selling it to you is.