***Success Comes from Making the Numbers Work

"Prices of existing homes fell for the first time in 11 years and the backlog of available homes for sale was at its highest since current measures began, underlining the significant slowdown in the housing market."nn- "US Housing Slowdown Continues," by Daniel Pimlott and Michael Mackenzie, Financial Times of London, September 25, 2006.nnOver the last month, articles like the one I quote above have been appearing almost daily in magazines and newspapers. They tell us that we're in a slump, the bubble has burst and the real estate market is flat as a pancake.nnBut if you look at that quote above, doesn't it say that prices have fallen and that there is a large inventory of available homes in the U.S.? And doesn't that mean that it is a good time to buy properties at advantageious prices? It does.nnOf course, you have to be careful, because this is a difficult time to get top dollar for properties you want to sell. But even so, the combination of low prices and a large inventory of available properties represents a handsome opportunity for people who know how to structure the financial side a real estate investment. In other words, for people who have mastered the art of working the numbers.nnPeople who know how to work the numbers have developed skills like these:n

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1. They buy properties at the right price. Our own blog post of September 22 can tell you more.n
2. They accurately estimate what a property will be worth after they have improved it. They study comparable property sales in their regional markets so well that they know how to weather temporary price slumps.n
3. They set a budget that supports points #1 and #2 above, and stick to it aggressively. They know that over time, overspending even a little on fix-up costs, realtor fees and other expenses will suck the profit from any property. That's why they ride herd on every nickel and dime they spend.n
4. They build a buffer into any real estate deal. They realize that unexpected costs come up and they have a cushion that keeps those surprises from sinking them.n
5. They have contingency plans. In today's market, for example, it could be a mistake to hang your plans on the idea that you will sell a property in one year. At that time, the market might still be soft and you might do well to wait before selling. One winning strategy? Acquire properties now, rent them out and improve them later so you can sell them when the market surges again.n

nThis can be a time of immense opportunity if you possess the right skills. Our Real Estate Investor Traning Program can show you how.nnMichael Sexton is President of Trump University.