Back in the day my mentors would regale me with real estate investment stories about the early 1950′s. Having been born in the summer of ’51 I was all ears. I heard a common thread in most of their tales, until that is, we hit the end of 1975 or so. The ‘way it always was’ began to change — radically. They began to notice not so subtle changes in the local market, and they didn’t like it one bit. No siree.
Prices started rising in what would be the first of a long cycle of up a bunch, down a bit, up a bunch more, etc. I’m not sure it was indeed a paradigm shift as a matter of fact, but to them that’s exactly what it was. One of ‘em was so put out by what he saw through the rest of the 70′s he retired earlier than planned, headin’ back home to Wyoming.
Having just turned 25 in the summer of ’76 when this new reality shifted into overdrive, I can attest to the wonder we all felt. We spelled wonder — bewilderment. 
Runaway appreciation had arrived big time.
Those who adjusted to the new reality did exceedingly well. Those who didn’t? From the mid-1970′s to 200? they literally left million$ on the table.
So when the title of tonight’s piece asks, “How’d WE get where we are today?” I’m pretty much talkin’ ’bout you and the mouse in your pocket.
For many of those who began investing on or before say, 2002, some decades before that, this adjustment has been painful. Capital growth has been the engine driving real estate investment portfolios since Ford was in the White House. Those who made proper and prudent use of their capital in order to best take advantage of the almost guaranteed annual appreciation, made impressive strides increasing their net worth. (He said with equally impressive understatement.)
They’d buy an income property for around $40,000 in spring of 1976, sell for around $78,000 in the early summer of 1978. At 20% down plus closing costs, their total capital outlay to buy had been roughly $9,000 or so. The net check at sale just 26 months later was, give or take, almost $40,000! They did it again, this time acquiring much more property — maybe $150,000 +/-.
Then the cycle turned on ‘em. It was just as vicious as the upswing had been exciting. But most just rode it out ’till around the end of ’84 or so, when interest rates had begun to show they were happily headed for single digit status again.
Happy days.
As we all know, this cycle repeated itself such that investors accepted it as the norm — or worse — their birthright. Then the current market correction hit with brutal force.
But, as most of our grandmas told us, there is almost always good to be found in bad times.
Grab yer pencil and paper cuz here it comes.
If you’ve owned your income property long enough to have seen your equity grow impressively, you also know it’s still much larger than when you started, even now.
This is good news, people.
You can take advantage of this monster shift in the fabric of the real estate investment universe. This shift has blessed us — again, that’s you and the mouse in your pocket — with a once in a lifetime opportunity.
Many are now able to adjust their previously executed investment plans, to increase the potential income when they reach retirement. Between the silly low interest rates, and the textbook positive price/rent ratios available in excellent locations, you can double or even triple what your retirement cash flow might’ve been.
I mean this in a completely literal sense.
Your window of opportunity is open — for how long is anyone’s guess. Cracked crystal ball and all.
The Perfect Storm for which many of you have been waiting is here.
Interest rates? Low 5′s. Prices/Rent ratios? Good enough to yield cash on cash of 7-10% using just 20% down payments. Location quality? Let’s not mince words, OK? There’s not one income property I’m talkin’ about here in which I wouldn’t be happy to let my 79 year old mother to live in by herself. No ambiguity whatsoever. And for the record, I love Mom a whole lot.
It’s my professional, experiential opinion that those who missed out on almost 40 years of healthy appreciation, will not have been as disappointed as today’s investors who miss out on the current window of opportunity.
It’s that good.
Please don’t mistake my appraisal of today’s real estate investment atmosphere as an easy road to huge retirement income. It’s not. But those who carefully construct a truly Purposeful Plan will indeed give themselves the opportunity, the likelihood of enjoying a magnificently abundant retirement.
Am I talkin’ to you and the mouse in your pocket?
If so, gimme a call at 619 889-7100 and we’ll see what’s possible together. Have a good one.
Related posts:
- What Can A Prudent Real Estate Investor Do In 20 Years With $55,000 Today And Some Periodic Cash?
- San Diego Real Estate Investors — Pay Attention To Jon & Jill
- Real Estate Investors — If You Homer, Don’t Worry About The Color Of The Bat
- How Real Estate Investors Really Get It Done – Attn: Newbies
- The Perfect Positive Storm For Real Estate Investors?
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