Seven years ago, the real estate market where I live – the west coast of Canada – was in a serious slump. Crushed by the Asian crisis of the late 1990s, the Greater Vancouver area just couldn’t seem to rally back. Houses languished on the market, and often slipped into foreclosure. Price reductions were the norm. It was a tough time.
It was also when my husband and I began our real estate investing partnership.
The market was scary, but we didn’t worry much about that. We focused on our objectives and on finding a deal that worked for us. We wanted to buy a rental property in a decent area that would put a little money in our pockets every month. We looked for deals in areas within walking distance of schools, near shopping centers, and around transportation options.
Finally, we found a large duplex, sitting on top of a fairly steep driveway. It had been on the market for over 15 months, going from $199,000 to $179,000 to $169,000 and then slipping into foreclosure. We picked it up in court for $159,000. And within 12 months, our income from that investment was $300 per month. Since then, the rents have almost doubled, and the property value is well over $300,000.
It’s easy to mistake the incredible turnaround made by that market for good timing on our part. But it wasn’t. The reality is that we did very well on our purchase because we had a plan with a clear set of objectives – and we stuck to that plan. We focused on the deal, and didn’t worry about the market.
These days, real estate investing once again seems like a scary thing to do – and it is if you are trying to time the market or hoping to make a quick buck. But if you need reassurance, remember what Warren Buffett has often been quoted as saying: “Be fearful when others are greedy and greedy when others are fearful.”[Ed. Note: In eight years, Internet Money Club member and real estate investor Julie Broad and her husband have built a multimillion-dollar real estate portfolio in their spare time with minimal cash resources. They publish a free monthly newsletter to help other rookie real estate investors achieve their investment goals.]