Inflation ImpactAgain, one of the best places to be is in real estate if/when inflation occurs. The “herd” has moved from a borrowers position to a cash position in this economy. If/when inflation occurs a cash position is not the place to be. The erosion of purchasing power puts the cash person in a reduced position after an inflationary period.

Going INTO this recession you should have been in a cash position.

Going INTO an inflationary period, you should be in a levered position.

Keep an eye on the “herd”, it is usually a wise position to do the opposite of what they are doing if profit is your motive. People are leaving/avoiding real estate now, when they should be buying/acquiring real estate. Prices and terms are phenomenal.

Once the masses start to buy real estate, that’s when one should think about possibly selling or whatever…basically, I’ve always been a buy and hold guy.

Again, Now is the time to buy real estate…the signs are clear. Buy as much as you can afford. Look for value, let’s not try to flip it, okay? Buy it, figure out how you are going to pay for it…and I mean pay for it as in, paying it off…free and clear, okay? That has always been my tack, it has worked well for me.

I gotta tell you one quick story before I go; I was first licensed at Century 21 Viking Real Estate here in Alexandria, Mn. My first broker was Ward Sonsteby. I was 26 years old and had a negative net worth. I was never afraid of hard work, it’s just that hard work never seemed to make you any money. You just got tired. I asked Ward one day what he thought the best way was to make a million dollars? (In 1982, that was a lot of money) Ward said, “the best way he knew how to make a million dollars was to go and borrow a million dollars and then work like heck to pay it off.”

With real estate, that’s easy…hard work…but doable.

Avoid the “double down” theory as in gambling. I never liked that approach.

Building Blocks…think of real estate as building blocks! Just keep adding blocks to your portfolio. Over 10 to 20 years your families will have assets to capitalize on.

Source of article: National Association of Realtors