Buying a House in Todays Economy
If you’ve been watching the news lately, you have probably noticed a lot of adds on making money buying Real Estate with no money down, a real get rich quick idea, isn’t that what got us in this current economic crisis in the first place? Mortage brokers made their living writing loans that no one in their right mind would have signed up for, but everyone else was doing it, and people have been accused of being mindless sheep often enough, that there has got to be some truth to it. Have you ever been in a store and noticed that no one is in the checkout lines and as soon as you head for the checkout everyone else is racing for the nearest one?
I have been laid off from the construction industry since last August, but I rolled over my 401K into an IRA and have a little of it left. Are you trying to decide where the safest place to invest money is right now? Is the best investment in the stock market? There are going to be a lot of people made rich in the next upswing, the key is timing when to jump in. Exxon stock is cheap right now, but aside from the Exxon Valdez Oil Tanker that leaked oil all over Alaska, can you really justify putting your money with a company that has proved that they will not take financial responsibility for their actions? If the answer is yes you could probably make money. Gottschalks just went bankrupt, I read that the original founder passed away in 1980, and I don’t know if the family took over or what. But if a company that size could go under, who knows. What if you put 1000.00 dollars in Exxon and they drop a few points, if you are wealthy enough, or an adrenaline junky, and you could ride it out, you would come out of the stock market in 5 years, much better off financially than you are now.
I am so risk adverse, right now, and apparently a lot of investors feel the same way, I don’t think I could handle the pressure, the uncertainty. On the other hand if you don’t invest right now and you miss the upswing, just think of all the money that you could have made. If you manage to pick stocks that actually go up. Let’s not forget Gottschalks. So having looked at the stock market, lets take a look at real estate as a survival strategy for these current economic times. Even if you don’t have a job right now, or you are working for a company that is thinking of laying off people, with a down payment you could buy two houses, live in one and rent the other one out, right?
What if the house you are renting out does not stay rented, not to be overly pessimistic, but in order to make a realistic assessment of the situation, you have to look at all possible scenarios within the scope of what you think may happen, right?. What if the people you are renting to get laid off. If they have a source of income that they can fall back on, then everyone wins. If you start thinking of all the bad things that can happen you will not have the courage to get out of bed in the morning, let alone invest in the economic recovery, that we all need so badly. In order to buy a house you need to be earning enough to make the payment on the house. If the bank is so desperate that they are willing to let you buy up a good property cheap, you still have to be able to sit down with a banker and convince him or her that you are good for the money. From the banks perspective they would just be throwing away more money if they write a loan thats not going to work out. No one wants to throw money around right now.
Lets take a look at buying commercial property. In Florida, I found a Welding Shop for sale, the guy just wanted someone to take over the business, I am sure that for a small down payment in some instances, maybe not in this instance, a person could take over a home or business. After you look a person in the eye and shake their hand, all the while telling them how much you want this business, how hard you will work to learn how to run this business and make it a success, at what point is it OK to bail on that promise, 5 years? 10 years? Scheming about how you’re going to get rich, and not have to work for it are not the values that made this country great, I think the Economic Crisis is as much a crisis of conscious as anything else. So ivesting in Real Estate is probably a good idea right now, as long as you are in it for the ong haul. If you are willing to work at it and stay with it, then now is the right time for you to jump on some of the good deals that are out there.