NEW SECRET: Know Which Market You Are In and Reap Massive Benefits. - Dean Graziosi Weekly Wisdom
1 Jul 2016 · 4 min
Dean Graziosi breaks real estate markets into three phases: decline, recovery, and peak. Cash-flow buyers dominate early recovery hunting high returns; speculators take over at the peak. Know which phase your market is in and adjust your strategy to who's actually buying.
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Hey, everybody. Dean Graziosi, welcome to the Weekly Wisdom. I want to share something with you really quick. Matt and I did this on a whiteboard last week for another project we're working on. And you guys got to see this, right? We know the real estate market goes like this, but one thing I want to share with you that will make you feel really awesome about where we're going is we broke it into thirds. Okay, let's say this is a third. This is a third. And. And this is a third. Okay, well, we could even move this down because we teach you how to buy below the market. So let's say a third. A third. A third. So many times when people are in this third and this is the cash flow buyers. I hope you're following me. I know I'm going quick because this is going to be a long blog. This is where cash flow buyers come in, the logical buyers. This is when everybody else, there's no competition. Everybody thinks, stay away from the market. This is when I was buying as many as I can. I still am. And so many smart cash flow buyers know that they put a certain amount of money in here. They get our a return on investment. That's very attractive. And they take as many as they can. Okay. They're the people that may have been on your buyers list. But then as the market turns and it starts to go up, you go from here, maybe they used to get an 18% return here and a 15% here. And now it's moving up in here where it's at 12 or maybe 8%. And some of these cash flow buyers go, no, I'm good. I'm a 15% minimum, 18% minimum, whatever the numbers are. And all of a sudden you start thinking, wow, my buyers list is drying up. You can't get deals anymore. No, what's happening here is now speculators are jumping in. Now, I know I shared this with you, but it's really cool. Now here, what's cool about this third? Speculators and cash flow buyers are about 50, 50. Okay, 50%. 50%. Does this make sense? Market crashes, was way up here, Houses, let's say this house was 200k. Back up here it'll be 200k. We're just using round numbers. When it drops down here, maybe that house was 75K. Okay? And it's on its way up. These speculators are looking at a house. Maybe here it was 75 and here it was 95. And here it's 125. These people just want it to go back to 200 and they're going to flip up here when it gets to this last third. This is all speculators and I'll make sure my students are doing nothing up here except some speculation, but mostly wholesaling because the buying frenzy here is crazy. Because remember, down here, there's no buyers. As it goes up, it spreads out. There's a lot more buyers. So as we shift, if you're thinking, wow, the deals are drying up. No, the deals are drying up because more buyers are coming in and you have an opportunity to sell more property. So the reason I'm sharing this is because we got so many different numbers in and you might live in this third or this third. I don't think any of the country is here. I would just say we're about here in some of the places like I mentioned, some of the fast moving areas. So I think this is really important for you guys to know. It doesn't matter where you are, it just matters that, you know, we're shifting. If prices are going fast, you might have to look for speculative buyers, not cash flow buyers because they're more emotional. They just want to buy here and sell here. I hope that was something that really allowed you to see that this is the greatest time to be in real estate. And that's why I pound on you and do these weekly videos. I don't want you to look back in five years and go, I missed 2013. Because this is what we have in 2013. Your greatest opportunity. Opportunity to make money that I think will ever exist in our lifetime ever again. Country is kind of stagnant, worrying about debt ceilings, we're worried about fiscal cliffs, while quietly, real estate is doing what? Boom. Shifting.
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