Does Donald Trump Know Real Estate?

Does Donald Trump Know Real Estate? by Bill Roberts

"When I first started out in Manhattan, everyone was saying what a terrible market it was, and if I'd listened to them, I would not be where I am today. There are always opportunities." Donald Trump.

Lately I have seen a lot of negative things written about real estate.

Everybody has some area of the real estate market to rail against. Too much inventory seems to top the list.

Do as Trump did, don't listen to them.

Ageless advice to investors is to buy when everybody else is selling. This is when you get the best deal. If you buy when everybody else is also buying the price will be high and you just might be buying at the top of the market.

On the other hand if you buy when everybody is selling you'll get a good deal.

So how do you know when everybody is selling? Well, a very good indicator is published by most MLSs, it is "days on the market" or DOM which is how long the average listing takes to sell. The bigger this number, the likelier it is a "Buyer's Market."

You can also get the absorption rate. This is the available inventory divided by the average number of sales per period of time. If there is two or three months worth of inventory, you probably have a "normal" market, if you have 15 days of inventory it is definitely a "Seller's Market," but when inventories stretch out to over a year it is time to buy.

This is a signal like those stock investment programs on the TV infomercials, ALL GREEN LIGHTS.

In most markets in the US inventories are very high.

If you would like to invest in real estate but you are waiting for the "bottom," don't wait.

By the time you know the bottom has been reached, it is already going up the other side.

The Seller's psychology is affected by the same "news" that you get. Right now he will probably take any reasonable offer, but once the bottom is reached he will be looking for a better offer. If you want the best deal possible, you better buy sooner rather than later.

My advice to you is pick the area you like and don't worry about the local conditions.

Real estate is a "Buy and Hold" investment. It is not well suited for "day traders" and "flippers." But as a long term invest it is great. Over time the trend line is up, and remember, "The trend is your friend."

So, if Donald Trump says buy now, you should listen to him.

If you need help with your real estate investments or financing for your real estate investments give me a call. Bill Roberts (619) 244-4610.