If you think there's no money to be made in a soft real estate market, think again. History has proven that some of the world's biggest fortunes were made during downward economic cycles. For instance, Warren Buffet made a huge part of his fortune by buying companies that had fallen on hard times and turning them around, and Donald Trump made his billions by buying rundown or vacant properties and rehabilitating them.
The secret? Trump or Buffet had a strong grasp of the most basic law in the world: the law of Supply and Demand.
The important thing, if you want to make BIG money, is to go against "what everybody knows" when it comes to the economy's current situation.
For example, common wisdom says that buying foreclosures is the next big thing, since the market is slowing, interest rates are creeping up, and homeowners are increasingly feeling the pinch. That's all well and good, but that means an ever-growing number of would-be investors are clamoring to buy those foreclosures, driving prices up and making them less attractive as investments.
However, you can go against what everybody knows, while staying well within the law of Supply and Demand, by buying homes that are in short supply in high demand areas, whether they're foreclosures or not. I live in Southern California, where the demand for homes is high, but the supply of homes is limited, so if I can locate reasonably-priced properties and give them a new life, I generally find a line of buyers waiting to bid on them when I'm done.
But what if you live in an area that has the opposite situation--high supply and low demand? You can still make money. If you happen to be buying properties at a time when many people are trying to sell their homes, you're in a position to get a better sales price, giving you more room for profit when you flip the property. What you're doing, in essence, is increasing the demand for YOUR particular property, even if it's a buyer's market overall.
If you've familiar with my experience in using design psychology and home staging to sell homes, you know that there are many ways to increase the value of a home without spending a great deal of money. Then, once you've increased the demand for your home, the profits will come--even during an economic downturn.
Learn how to use interior design secrets and make money flipping houses.
Copyright © 2007 Jeanette J. Fisher
