Real Estate Investors Facing The Reality Of The 2008 Bubble

Lately I have heard many speak of a "buy and hold" strategy with the hedge bet that the market will return to a state that makes it equitably profitable in the future. Many are using this as a base for going into Lease To Purchase endeavors banking on the market to uptick and then getting market values far higher than today when the Lease To Purchase is executed. But is this plausible in the post-bubble world?

As ths the stock market does occasionally, I believe the housing market "reset" on more acceptable prices for the average home buyer. Anyone who watched housing prices during over the past knows that prices continually climbed regardless of the overall economy. It was almost a given and most of us lived with the assumption that we could always leverage our growing equity to buy into our next investment or even our next personal home. But times have changed. The market in my personal opinion reset depending on the area 5 to 10 years.

The age of mortgage lenders providing loans to no job, impoverished, or those with 10's of mortgages is gone. The greed of generating mortgage after mortgage and folding them up into a black box that no one understood was a catastrophe just waiting to happen. I believe this is one of the biggest factors in the housing market values increasing year after year. Can't afford a down payment or principle payments? Who cares! They would put you in an interest only ARM or some other tool. For the average buyer completely ignorant or anticipating a move dove into these opportunities. 

So what's the point of all of this? I personally believe that at this point banking on significant increases in home values is foolish. Even if the housing market begins to stabilize by 2014 as the experts are suggesting this simply opens the door to retail vs. foreclosure housing stock purchases. It doesn't mean prices will increase.

In the end each investor has a savvy nature that may find a way to beat the market and that is the beauty of the industry! But for the rest, a more conservative approach may be in order during this time of transition... Especially newcomers to the game. With Self-Directed IRA's kicking up the opportunity to buy into turnkey has never been easier. With a little capital or loan ability, even pre-rehab purchases for either cash flowing or selling turnkey is a solid idea.... with the right support team in the city of investment.

Hopefully I will get slammed on this through comments... at least I know people are reading it. So if you feel I am ignorant, naive, or plain wrong... let me know!