How do you know if the market is good to invest?

Question

I am Constantly searching for deals of course. I have cash reserves just in case a crash does happen and I can basically jump in with that money. What I'm wondering what do you guys look for when it comes to this? Any news outlet? I would like some statistical analytics.

For me right now I just look at the employment rate and see how fair that is.

Jared Hottle · Answer

As everyone else has said macro items do not matter much for people just getting started. Do the numbers work then do it. Market may go down, rents may go down (unlikely) but but don't let fear drive you. The reason you can make money in real estate is imperfect information. If there was a news station or an algorithm that could do it perfectly all markets would be in equilibrium and there would be no money to be made. Irrational human behavior is what gives us an edge, run your numbers, take as much guesswork out as you can and go for it if you find a solid deal.

Eliott Elias · Answer

Market is not going to crash. There’s no perfect time to buy, you’re just going to have to set a criteria you want and buy that. Time in the market is better than timing the market

Moses Bowie Russ · Answer

It is always a good time to get in the market. Most of the tools echo each other. I use spreadsheets and Propstream, Redfin, economic indicators and shifts, population growth, companies/industries coming into an area to make my decisions. But to be completely honest with you, the way that you have phrased the question indicates that you might not be ready, and that's totally fine. You're going to have to submerge yourself a bit so that you can develop hypotheses, ways to test them, a strategy and an investment style.Everyone here has a bias, and asking us questions makes you subject to them. My opinion is that there is a cooling currently happening after a mania phase in the market. And that the conditions contributing to this cooling or as some would say return to normal are FAR different than the last real estate crash...but the market could crash tomorrow and my opinion could be wrong. Nonetheless, best to you on this journey.

William Joel Idleman · Answer

If you're planning on the buy and hold strategy then the best time to invest is today.  If you're planning on flipping or STR then you'll need to pay much closer attention to the market.

Juan V Lopez · Answer

Hey Fahadbin, we're technically already in a recession so most people react to this word in 2 ways:

1) Go into defensive mode and look for security.

2) Go into offensive mode and look to grow aggressively.

The news is the last place you want to get updates on the market. Anytime you turn on CNN, CNBC, etc, all the news is negative and doomsday.

Truthfully, the best sources are right here. Stay tuned in to the BP podcast, follow your local market trends and connect with people who are being aggressive in real estate. Those are the ones that are making the market, not hoping and waiting for it to crash.

Wish you the best.

Theresa Harris · Answer

Don't wait for the market to crash (it is unlikely to happen).  Find a property where the numbers work and buy it.  The only time I wouldn't do that is if you are a flipper.  If you are buying for long term hold, don't try to time the market as you will be sitting on the sidelines.

Scott E. · Answer

To determine what market is good to invest, you have to share more about your situation. How much money do you have to work with? Are you looking for fix & flip deals or buy & hold deals?

I have a friend who lives out here in AZ that deploys all of his capital to St Louis because he's looking to acquire a bunch of doors and cash flow.

I on the other hand won't invest in anything that's more than a 20 minute drive from where I live.

Neither strategy is a bad one. Just depends on your goals and where you're at in life.

Jordan Moorhead · Answer

@Fahadbin Alam I like markets that I know a lot about and that are growing. When it comes to buying criteria in those markets I need to be able to find at least an 8% CoC personally and see upside in the property. I like to know I'm making cashflow and am likely to see appreciation from job growth and people moving to the area.

Bruce Woodruff · Answer

The best tool is to get yourself out in the streets and look at properties. I prefer distressed areas that are getting ready to gentrify. You only find these by being there.

Dave Spooner · Answer

Hi @Fahadbin Alam

I agree with Elliott on there's not a perfect time to buy. I don't believe in the market crashing anytime soon. I think we are in a strange time but waiting for the right deal is best. This "right" deal just like others are describing as what your criteria is. It will be different for many folks. Best of luck on your journey.

How do you know if the market is good to invest?

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