Hello Real Estate Investors of the “Emotional” Market!
This morning, I got to thinking about the state of being an investor after the catastrophic effects of coming off the “financial orgasm” some experienced during the “flip frenzy.” Too many invested right past the “line of safety.” The “bungee” cord was “frayed” when they jumped off the bridge! It cost them dearly.
Watching the “trends” would be a smart practice and I know the “big boys” of investing do that, so they don’t end up with a “stall” of purebreds with no race to go to.
The “greed” of some investors is so intoxicating that, like an alcoholic, they never see disaster coming because they’re not looking anymore.
Almost every night, the networks bring their “doom and gloom” reports of how horrible it is and how much more horrible it will probably be very soon. That’s the power of the press! Do we as Americans believe everything they say? Of course not, but when it comes to the economy… we do! And it is bad! I don’t deny we’re in an unfortunate state.
I recently heard of a lady on the east coast of Florida, who, after being a Realtor for many years, is losing her own house to foreclosure because she hasn’t made a sale in over three months. Do you think the news media has been partially responsible for “perpetuating” the market slump? Absolutely! Let me tell you why…
Consider the facts: People, plus greed equals disaster! Banks, plus greed equals disaster! Anyone who got an ARM (adjustable rate mortgage) , got one because they couldn't get a better type of loan (or the broker did a "whammy" on them). In other words, "grabbing" for something you don't REALLY qualify for in the first place! Of course the banks are "always more than willing" to take whatever you'll give them! And most people are "ignorantly" willing to give them their lives.
The point I’m going to make finally here is that EMOTION is the #1 driving force of the highs and the lows in this market. If the people didn’t watch or listen to the negative reports, would they still FEEL the same way? NO, they wouldn’t.
If you’ve got a job, your wife’s got a job and your way of life financially has been the same for the last many years, why would you not buy a home with the mortgage rates at the current level they are right now? Exactly!
Take the emotion out of the equation and we would have record home sales and a record breaking economy! Not ALL people are out of work! Not all people are losing their jobs! Not all people have gone into foreclosure. Not everyone has a reason to feel “negative” about the future. If you believed the “economic reports” on nightly news, you’d almost be ready to quit, give up or jump from the highest point in your town! (I’d have to go find a building since I live in Florida and there isn’t much here taller than the WalMart store!) But, I’m NOT going to jump!
My suggestion for all of us who still want to be successful in Real Estate Investing, is to not let the “E” word affect us like many people are being affected. Obviously, you can’t go into town with your “guns a blazing” anymore, but you don’t have to run and hide like a scared rabbit either. “Smarts, awareness and non-emotional” (not compassion-less toward people though) are the key words in our current economy… and just maybe in our future one too! If you can grasp these principles, you may be on the top, even when the bottom falls out from under the others.