KC Condo Tracker

I couldn't have said it better myself. So listen to how Rick Harper puts things into perspective from a real estate investor standpoint:

The secret is, not all properties hit rock bottom at the same time. Many properties have already hit bottom and they have already been purchased. Somebody else got the deal. Some properties will never hit bottom; the sellers will simply remove them from the market and re-list then in better, more expensive times. I like to describe the market like this: If I threw a handful of small rubber balls in the air they would not all hit the ground at the same time. They’d all bounce at different times, just like individual house prices.

Not every seller will come to the same conclusion at the same time. A property is not worth what the seller wants, what the seller paid or even what somebody else paid. A property is worth what a willing and qualified buyer will pay today and not a penny more. The good news is sellers are starting to figure it out one at a time.

The trick is identifying the bounce and when to buy a specific property. For me as an investor looking to maximize profits, the price of a specific property is at rock bottom when the return on investment is better if I buy the property than if I leave my money where it is. Compare the real estate rental income and positive cash flow to the other investment options we all have, i.e.: stocks, bonds, savings accounts, etc. As real estate prices come down, and consequently the mortgage payments and taxes come down, while at the same time the demand for rentals is growing, at some point the positive cash flow will make the investment irresistible. That is the bottom for an investor.