INVESTORS’ CORNER: How to Adapt Your Techniques to Different Markets

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“By using seller finance which is insulated from the costs of money you can time these markets to buy low, sell high, and rent profitably while you wait.  The ability to time the housing and credit markets is what creates real estate fortunes.”

                                               -Jack Miller, Success Secrets

Don’t confuse adapting to markets with wildly trying to speculate and time markets.  They are not the same thing.  In the quote above, Jack advocates taking advantage of the enormous momentum of any market cycle to give your wealth building a ‘nitro’ boost.

In slow markets:  The key word is BUY.  Go out and buy deals at low prices, with long-term, low-interest financing so that you can rent the deals until the market warms up.  No one can predict exactly when markets will change, but if your financing gives you flexibility, you can afford to sit and wait until the perfect moment to resell and make BIG profits.

In hot markets:  The pattern is Sell, Control, Sell, Control.  Sell some of the deals you bought in low markets to put money in your pocket and to pay down debt on long-term properties.  Flip some deals to make cash chunks.  Also use creative financing – like lease-options, options, and seller financing to control properties with low risk, and then resell them for even more cash flow. Don’t forget to save some of this easy hot-market cash to use when the market goes back down!

In confused or choppy markets: You can always make money if you control the financing.  Leases, options, and seller financing give you certain terms that you can depend upon.  Business models that depend upon bank financing for their survival are more susceptible to sudden changes.

Are you not sure what kind of market you’re in? You need to ask. Join a local networking and education club like Metrolina REIA.  Listen to experienced investors and real estate agents. You’ll learn quickly what type of market you’re in.  Then you can adapt. 

Chad Carson is a member of Metrolina REIA (metrolinareia.org), which provides education, networking, and networking for real estate investing in the Charlotte region.  Chad also writes a newsletter about real estate, money, and life at coachcarson.com