Lots of people want to know: Should you invest right now?
Is It a Good Time to Invest in Real Estate Right Now?
Here’s how I look at it. We have no idea what the future is going to hold.
I love people who are like, “Well, if I was investing back in ’07 or ’08, I would have made a killing!”
No, you wouldn’t, because we didn’t know what was going to go on in ’07 or ’08. We didn’t know it was going to crash in ’06, ’07, ’08. We didn’t know where the bottom was. And we didn’t know when it was going to climb up again.
You never know anything—ever. That’s the bottom line, right? We never know anything, ever. So right now, we don’t know anything.
So, should we invest in real estate right now? Well, what if the market goes up? What if it continues like right now? It’s super competitive, the market’s climbing.
Or what if the market tanks? What if we go into another recession like ’08, ’09? What if it kind of goes somewhere in between? It’s kind of like those are the three options: climb, tank, somewhere in between.
My 2020 Real Estate Investing Plan
Here’s my point. No matter what, I want to continue buying good cash-flowing rental properties. I want to keep buying real estate. I’m going to keep flipping houses in a way that I can win either direction.
And so, in other words, you never know what’s going to happen. So, you always invest not knowing what’s going to happen.
Now, how does that look tangibly?
Well, first of all, if I buy a property that cash flows like an ATM machine today and the market drops, it’s still going to cash flow really well tomorrow—even if the market drops significantly.
If I flip houses, then I have a huge margin—I have a 20 or 30% margin on what I’m going to make on it—the market could drop 20 or 30% before I’m even worried. If I could rent that property out, if the market did crash 20 or 30%, then I’m still OK, because I’ve got another backup strategy.
So, no matter what, I’m going to keep working.
How to Proceed as an Investor in Any Stage of the Market Cycle
Here’s the key: the mindset change. When things get hard, many people quit. They’re like, “Well, the market’s really hot right now. I think I’m just gonna stop and wait ’til it’s easy.”
First of all, by doing so, it’s just taking the easy way out. It’s really more of an excuse than anything. You’re not going to invest later either.
What I like to compare it to is baseball. When you play baseball, to practice swinging, you pick up four bats at a time. It’s super heavy. Then, you drop the three bats and you just have one. And now the one feels super light, because you were practicing with something more difficult than what you’re actually going to be performing with.
Your muscles get accustomed to the larger weight. So, by dropping the three bats, one feels really light—you can hit it easily and hit it well.
This is the same thing. If now is a hard time to invest, which I will admit, it’s hard to find deals right now. It’s competitive. There are a lot of people getting in. Does that mean we shouldn’t invest? No, it just means right now we’re swinging with four bats—and that’s OK.
We’re swinging with four bats. And pretty soon if the market drops, then you’re going to be like a kid in a candy store—I’ll take that deal and that deal and that deal—because you got your education in a tough time.
If the market doesn’t drop and it continues to be competitive and we just continue to sail through this… well, good! You’re going to have these massive muscles to be able to outshine everyone else, because you didn’t stop swinging.
No matter what, we don’t know what’s going to happen—ever—in the future. All we can do is say, “I want to be successful, and I’m going to prepare for that.”
So that’s why I say: yes, still invest right now. It’s just harder than it might be other times.
Do you agree? Disagree? I’d love to hear your opinion.
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