Issue #2438 The Art & Science of Bear-Market Real Estate Investing

“Something is worth precisely what someone else is willing to pay for it.” So said a stock-market analyst to me one fine bull-market day many moons ago.

A statement like that can seem profound, but it’s useless. Yet it is the mantra of many investors in all fields. In bull markets, the sellers say it. In bear markets, the buyers say it. But it is about as helpful as saying, “Wherever the sun shines, there it is daytime.” So what?

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Build Your Own Instant Financing Network

It’s ugly out there.

Properties aren’t moving; sales volume has plummeted. Foreclosures are up 48 percent from a year ago. Prices are down as much as 20 percent to 30 percent in markets ranging from Miami to Los Angeles.

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The Rental and Sales markets

I’ve advocated buying only cash-flow properties using fixed rate, amortizing loans. But now that you’re in this situation, here are a few things to consider:

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