Investing In Real Estate Is A Two-Way Street

Every Real Estate Investor must recognize that investing is a Two-Way street. Contrary to what we used to believe, Real Estate values can go DOWN as well as up. The last 30 years have given us vivid examples of this roller-coaster ride.Nonetheless, Real Estate is and always will be the best investment vehicle; “Under All Is The Land”. However, the investor who fails to recognize that ANYinvestment can turn into a Two-Way street, can be in for major problems. Checked out General Motors or British Petroleum stock prices lately? Or maybe Real Estate prices in Las Vegas?
By the way, speaking of Las Vegas, I watched a movie last night about “Bugsey” Siegel who built the first hotel/casino in Las Vegas; The Flamingo. Bugsey was killed by his fellow Mafia (The Mob) compatriots because the cost of the hotel/casino ended up being several million more than Bugsey had told them it would be. Also, they did not think that this venture in the middle of the desert would be profitable. To date (or as of the date of the movie) Bugsey’s 6 million dollar venture has turned into 100 billion. How’s that for appreciation?
Anyway – Some ways to protect against the Two-Way street is as follows:
1. Try to invest in areas with varied businesses and economies.
2. Be aware that even though high-leveraged investments have more potential, they also have more risks.
3. Diversify your assets – so that you don’t have to start over from scratch. (I say this with considerable
experience). Try to have some properties Free & Clear, or at least with high equity percentages.
4. Use non-recourse financing whenever possible. I highly recommend getting Seller Financing whenever
you can. As icing on the cake, ask for the right to substitute collateral for the loan in the future.
5. If losses occur, don’t sweat it too much. If you did it once, you can do it again. You still have your
creative and experienced mind. I remember a statement I heard many years ago, don’t know who said it first;
“If you took all the money/assets of the people of the U.S. and split it up evenly among all of the people (with or without money/assets), those same people who have assets now and who gave theirs up, will have it back within a few years.”

These posts are the opinion of the author who is not engaged in rendering legal, accounting, or investment advice. If such advice is required or desired, the services of competent professional persons should be sought.