A Depression Looms

[invst4profit]

JoefromTO

I can certainly empathise with where you are coming from. I often have to weed through the Ra Ra and `positive` to get to the real meet on the site at times. It is not constructive to simply concentrate on the positive when dealing with reports as some would like.
Being positive may have it`s place but I prefer to operate on a strictly business level as void of emotion as possible when dealing with real estate and/or the economy. It`s all just information from different sources.

Jacks posts are, in my opinion, just as valuable as any other on this site in creating a balance. I simply throw them all in the same pot and disregard who is posting what. His detractors are small in number and tend to be the half full rather than the half empty type personalities.
Although I do not agree with them they are entitled to their own personal approach. Ra Ra.

 

[Allie]

The "Ra Ra" attitude has its place and the masses eat it up. It`s not exclusive to this site. It`s also found in most self improvement seminars. When presenting to audiences, presenters are trained to ask rhetorical questions, use humour and positive mumbo jumbo to keep the audience engaged. If you pay attention at certain seminars (I`m not discussing REIN here), you`ll notice that the more experienced and complacent speakers often go into "autopilot" mode so the insincere "Ra Ra" programming gets tiring real fast. I enjoy focused and constructive goal-directed optimism, as experienced in Stephanie H`s and Phil M`s personal coaching presentations but when the positive anchoring is generic and just there to set the tone, I too can`t wait to get to the real meat and potatoes. I`m cognizant of the fact that presenters/posters can`t cater to a specific style of learning/viewpoint so I try to make the most of the situation by absorbing as much as I can by weeding out the distractions.

On a different note, I find it interesting that generally speaking, the audience at live events get hyped up over "positive" stuff while the audience on message boards gravitate more towards the negative posts.



QUOTE (invst4profit @ Dec 9 2008, 02:46 PM) JoefromTO

I can certainly empathise with where you are coming from. I often have to weed through the Ra Ra and `positive` to get to the real meet on the site at times. It is not constructive to simply concentrate on the positive when dealing with reports as some would like.
Being positive may have it`s place but I prefer to operate on a strictly business level as void of emotion as possible when dealing with real estate and/or the economy. It`s all just information from different sources.

Jacks posts are, in my opinion, just as valuable as any other on this site in creating a balance. I simply throw them all in the same pot and disregard who is posting what. His detractors are small in number and tend to be the half full rather than the half empty type personalities.
Although I do not agree with them they are entitled to their own personal approach. Ra Ra.

 

[Jack]

People, this is not a battle of positive vs. negative.
The economy, right now, is in shambles. I don`t see any way that this can be "spun" in a positive light. This isn`t "ra-ra", this isn`t "doom and gloom", this is reality! We`re in difficult, uncertain times, I don`t see how that`s even a matter of debate. Everything is affected.

For those like Wade saying that you`re protected because you`ve got all this passive cashflow coming in, great! I`m honestly happy for you and impressed by your actions. BUT, leases are typically for 6 - 12 months. What happens if rents drop? Cashflow today does not guarantee cashflow tomorrow, don`t forget that. And with that said, do you think that the economic landscape affects rents? You bet.

My suggestion is that we should be focusing on breaking down and discussing the ramnifications of my original post, what the economic consequences are, how to succeed in such instances, etc. Who cares about positivity/negativity/etc.

 

[Jack]

QUOTE Being positive may have it`s place but I prefer to operate on a strictly business level as void of emotion as possible when dealing with real estate and/or the economy. It`s all just information from different sources.

BOOM, hit the nail on the head. Well said.

 

[EdRenkema]

QUOTE (invst4profit @ Dec 9 2008, 01:46 PM) I often have to weed through the Ra Ra and `positive` to get to the real meet on the site at times.

I see nothing wrong with Ra Ra and positive, if it makes me realize the glass is half full, I have more energy and determination each day. If that Ra Ra is backed up with some experienced advice so much the better.
Obviously being unemotional when analyzing a deal is critical. Celebrating successes and seeking out the positive reinforcement of like minded others is also critical in my mind.
If times are tough and they are, I`ll work one day this week at my `job`, yes thats the one that pays my bills, then I sure don`t want to be around others who cry about the sad state of affairs and do nothing. Yes I want to be cognizant of it and plan accordingly, keeping perspective is always important.

 

[markbrad]

I just like to look at the opportunities, and I want to be in a position to act on one when I choose to. Guess what I like to do. Let`s say it is fall 07. I need a new pair of rollerblades, but heck, they`ve been discounted 50%! And next spring will be a new model (and full price). And I can`t use em til next spring, and next summer is forecasted to be cooler and wetter than normal.... Folks, here`s what I do. I go looking for a size that fits, some that work (the bearings and wheels are the specs I want (or at least close)) etc. and I go and BUY them. Now let`s say summer 08 is cooler and wetter than normal. I only get to use them 60% of what I would like to. But guess what, my cost per use is still down and I have blades!

I guess my point is, if you are going to buy anyhow, and you can rent it out on positive cash flow, why not buy now when prices are lower, terms can be better, and sellers are motivated? READ ... BUY ON SALE! So what if next year is blah? Buy another one then and dollar cost average. If rents come down and you are put into a negative cash flow of $100 for 10 months, who can`t afford $1000 to have bought at a big discount? And if you think the economy is in the dumps for years... DON`T BUY. Just give me a call in 5 or so years when I am ready to sell!!!

Really, all it is about is buying real estate at a pace you are comfortable with and at a time you are comfortable with. I just passed my one year in REIN and I don`t have my 3 properties in one year, while a couple of others have posted in success stories 20 or so in one year! But I am 2 ahead of where I was before. And by the way, I have 4 of five suites vacant right now (2 being renovated) so yes I have worried a bit, but I am also confident that I have a nicer product than any others and there are people out there like me who won`t live in junk, so worst case I will have them rented out by Feb. No positive ra ra and no negative doom and gloom - just the facts baby!!

Mark

 

[Jack]

QUOTE the worst situation in a period that is INFLATIONARY is to be in cash .... and to see your cash deteriorate in value while holding nothing that appreciates in value at least with inflation, with monthly income, such as positive cash-flow real estate in growth markets !Personally, I`d never call sitting on cash "the worst position" to be in. Look at the numbers - inflation will probably run around 3% next year, so the spread between the rate of inflation and the rate earned in a savings account is immaterial. While, in theory, you`re right that the value of cash holdings will decline by the rate of inflation, the point is that you still have cash - and you`re at much greater risk for a more significant value decline in stocks, real estate, etc.

QUOTE Debt for depreciating assets (or at least assets with no supporting income to carry the debt load) like car loans or even your own home should be distinguished from debt that is used to buy Appreciating assets with income.

True, except the one bad thing about using debt to buy "appreciating" assets is that they still need to appreciate!

I think all Elaine was trying to say was that in times like these, it`s those who are saddled with debt that are really at risk of financial ruin. So, the best investment right now is paying down any types of the bad debt that one has, like car loans, credit cards, whatever.

 

[MonteDobson]

QUOTE (Jack @ Dec 9 2008, 06:51 AM) All I`m saying is that I`m not convinced that it`s the best time to buy right now, RBC`s report yesterday showed that things are still overvalued in many markets, there`s probably quite a bit of pullback to still be seen in a lot of areas. Remember - the economy is just starting to show the effects of the financial meltdown, and employment has historically lagged the economic cycle by 6 - 12 months. So this next ride probably ain`t gonna be pretty. That`s all I`m saying. Market timing is not a "fool`s game".

Check out this great quote regarding "timing" the market.

"Let me be clear on one point: I can`t predict the short-term movements of the stock market. I haven`t the faintest idea as to whether stocks will be higher or lower a month - or a year - from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up." - Warren Buffett

If you want to meet your five- and 10-year investment goals, imagine yourself five and 10 years from now. Ask yourself what you will wish then that you were doing with your money today.

 

[rico67]

Well with what is going on out there , all I can say is " Without fear you can`t have succsess "

The fear in all of us should keep the burning fire of success going ...

Rico

 

[bigbear]

Hi Jack,



I agree with you on the fact that holding real estate in Alberta is not a great thing to do and that things are going to get bad before they get better. I even had discussion with REIN members a year ago.



http://myreinspace.com/search/public_forums/Real_Estate_Discussion/62-1468-5148-Contrarians_View_on_Calgary__Edmonton_Real_Estate.html#5148



However, everyone has their own opinions and trying to convince people otherwise is kinda hopeless. Hell it is impossible for my friends to be able to convince me to invest in Alberta right now. In the end, in a few years or longer if there is a Japanese sytle deflation from now we will find out who is truly right. I view these "negative" events as a positive thing as it will help bring all the inefficiencies in the economy out and eliminate them and plus there will be great buying opportunities at much lower prices.



Good for you for offering an independent view of the situation. I find that most real estate investors where I am from, in Vancouver, are drones when it comes to investing in Alberta because everyone is doing it or their "biased" real estate gurus say so.



As these other posters say you need to be positive to succeed. I agree. I am happily waiting for prices to decrease and buy properties at rock bottom prices from people who held their properties when they should have sold earlier. If I am wrong about my predictions, it will be my buddies who have the laugh on me.



Regards,



Bigbear



PS: Holding cash is a good thing if one believes that deflation will occur in the next few years.

 

[Jack]

QUOTE
I agree with you on the fact that holding real estate in Alberta is not a great thing to do and that things are going to get bad before they get better. I even had discussion with REIN members a year ago.



http://myreinspace.com/search/public_forums/Real_Estate_Discussion/62-1468-5148-Contrarians_View_on_Calgary__Edmonton_Real_Estate.html#5148




Excellent thread, some good points and counterpoints brought up by both sides.



On the topic, I think that if you have a long enough time horizon, well-chosen real estate in Alberta will give you solid returns. There are some good fundamentals here, though I think it's pretty obvious that prices are bound to either continue to decline or stay flat over the next 1 - 3 years. So do I feel a sense of urgency to be out there, and to be finding deals? Not at all. That, and Alberta's not the first province that I would choose to invest in right now, either.





QUOTE
Good for you for offering an independent view of the situation. I find that most real estate investors where I am from, in Vancouver, are drones when it comes to investing in Alberta because everyone is doing it or their "biased" real estate gurus say so.




Maybe it's the Vancouver origins that have guys like you and I so free of bias when it comes to Alberta real estate. I grew up in White Rock, myself.

QUOTE
As these other posters say you need to be positive to succeed. I agree. I am happily waiting for prices to decrease and buy properties at rock bottom prices from people who held their properties when they should have sold earlier. If I am wrong about my predictions, it will be my buddies who have the laugh on me.




Agreed. Being positive is great and helpful. By posting what I do, I'm not being negative. I'm posting facts which have relevance to our real estate holdings.