Buy High / Sell Low

I think it is because they are afraid to take the risk until they have watched many people make money at it. Sort of like jumping off the cliff and into the sea. You never want to be the first one to jump. After 20-30 people have jumped and survived, you feel a llittle more confident.

Then, when prices are down, they are afraid to take the risk because nobody else is buying.

Edited: 06/26/2010 at 04:54AM

Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado

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Mar 22 '08, 11:28 AM

You've never heard the old saw " the trend is your friend" ? It is, right up until the point where it turns around. So, in terms of time, most of the time, buying when prices of an investment are going up works, and selling (or selling short) when prices are falling works.

Jon

Edited: 06/26/2010 at 04:54AM

Jon Holdman, Flying Phoenix LLC

Amy Vasquez

· AZ

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Mar 22 '08, 11:45 AM

I don't think most folks realize it IS a sale.

Edited: 06/26/2010 at 04:54AM

Toby Munk

Residential Real Estate Broker · Aspen, CO

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Mar 23 '08, 02:47 AM

It's the old 80/20 rule. If the majority would do things right things would not work out. 20% of investors will make 80% of the profits. Therefore they need to do things differently than the masses.

Sounds simple but is hard to do. Not only in real estate investing but in almost everything business.

Edited: 06/26/2010 at 04:54AM

Lance Bloggs

· MA

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Mar 23 '08, 08:29 PM

Most people fear further falls more than they believe in an opportunity.

Edited: 06/26/2010 at 04:55AM

Harrison Painter

· Indianapolis, Indiana

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Mar 28 '08, 12:39 AM

So many people suffer from a condition known as "paralysis by analysis" .

I have observed too many people strangle themselves with the " What if" game and act as if they are performing due diligence!

It seems that their main focus is always on the " Worst Case Scenario" and in my experience, all this does is cost them money.

If you come to great forums like this one, focus on pursuing your education, and make sure to surround yourself with positive influences, you will be able to replace all of that fear with confidence.

The best advice I can ever give a new, or scared investor, is this:
Real estate is NOT a " Get Rich Quick" business, regardless of what some people might lead you to believe. It takes A LOT of hard work, a few mistakes, and some time to make it happen.

You must treat this as a business, not a scratch off lottery ticket.

My Quote of the Day: " If you are investing with scared money, you will probably lose it!"

Edited: 06/26/2010 at 04:56AM

Jason F

Real Estate Investor · Gainesville, FL

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Apr 14 '08, 08:40 PM

I think it is because most people just believe what they are told. They hear on the news all the bad things going on with real estate and don't think twice about it.

Then when the subject of RE comes up, all the can repeat is what they've heard on the news or read in the newspaper, " man, real estate is really bad right now" , " people are losing a lot of money in real estate" .

Nobody really thinks twice about what it really means when RE is low. It really baffles me that very few people realize that this is the time to buy. They just love to repeat what they hear.

Edited: 06/26/2010 at 05:03AM

Joshua Dorkin

BiggerPockets Founder · Denver, Colorado

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Apr 14 '08, 09:01 PM

Most people don't have the knowledge to judge value in either real estate or stocks. This is why they often get it wrong. If you don't understand the underlying fundamentals, then you'll have no way to judge what something is worth.

A piece of real estate or a stock is much more difficult to value then say, a toaster or TV.

Edited: 06/26/2010 at 05:03AM

Joshua Dorkin, BiggerPockets, Inc.
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Kyle Gregory

Real Estate Investor · liberty township, OH

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Apr 14 '08, 09:47 PM

i beg to differ that people dont buy real estate on sale. A seller puts out an asking price and how many times does a buyer give the asking price? Not very often. So now the property is in essence on " sale" .. Also some have been conditioned to believe that if you buy stock or real estate it is ALWAYS going to go up in value, where as you buy a car or toaster it will do nothing but go down in value.

That being said, it will be real interesting to see the aftermath of this mortgage bump.

Edited: 06/26/2010 at 05:03AM

David Saaf

6 posts
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Jun 19 '08, 03:29 PM

Yes I should say buy low/sell high rather than loosing our money, we need to know how to invest in the good deal.

Edited: 06/26/2010 at 05:22AM

Joe P

· West Virginia

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Jun 08 '09, 12:13 PM

when all is said and done, there is normally more said than done.

Edited: 06/26/2010 at 08:29AM