Initiated Week - Number 2 - "What is Cycle" - Action!
Tik 2 Week Entrepreneur "What is Cycle" - Action!
In all of the United States, all money flows through real estate and not just real estate investment firms; Capital funds, high-tech companies, pharmaceuticals, food and more. There are some investments that different companies make; For the benefit of the business, offices / employees / land for agriculture and for relatively safe investments as we do “For a rainy day”
Large investors (and large investors) know and know the four stages of the Cycle and have entire departments of employees strategically planning the acquisition and sale of their assets according to market conditions, just as in the stock market
(Whether it's commercial, residential, industrial, or land)
What does the Cycle tell investors?
There are four stages:
* The recovery phase
* The expansion phase
* Over supply - The hyper supply phase
* Recession / Withdrawal / Depression - The recession phase
Awareness of where each market is located can yield great returns, look what the prophet from Omaha - Warren Buffett says:
Most of us in the group invest in Residential so what does that mean for us?
* Recovery:
At the recovery stage the market is at the bottom, people are looking to sell for these and other reasons (2008's latest crisis was created because people were given loans to assets they could not meet)
At this point, prices are starting to stabilize, new construction is starting and the percentage of empty apartments is starting to fall - it's time to buy even if the return is not there yet. We take the risk and wait for it to rise and pay off in the years to come.
* Expansion phase:
The market is recovering. Prices are starting to rise and there is more and more new construction, new works that are created of course also have a positive effect on rental prices and supply and demand are well balanced - good time to buy and good time to start new construction
* Hyper supply:
This is the stage when supply exceeds demand in the market for rental and sale apartments.
At this stage most large companies are starting to sell (usually large buildings) to avoid a hard rental market.
This is an indication for us that this stage has arrived
* And …… .. Recession:
There is a large supply in the market, apartments are empty. New construction Mata and starters begin.
It's time to buy!
There is no exact time for when the market moves from one stage to another. As we see in today's market, it may be that the recovery phase is moving quickly to the expansion stage, but the expansion phase takes much longer to arrive at a permit.
Pictured - a duplex we bought last year at 30% below market price, the seller bought it in 2012 in the current cycle of the current cycle and still made 40% of his money after "milk" it for five years
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