> Continued from :: PG 47 Spring into Early
your business model. •
but it is still a bit early for shorts and sandals. Moves to Make During Absorption Absorption is the time to buy great cash flow properties as you can, as the A and B+ inventory becomes too expensive to cash flow. Focus on C+ and B- homes that will have high returns. Stick to solid neighborhoods. If you increase your portfolio during absorption, you’ll often cash flow well and get a bump from appre-
ciation later during the coming expansion phase. Remember that all real estate is local and that typically there are mar- kets in each of the four phases of the market cy- cle somewhere across the country. You’ve heard the saying, “Location, loca- tion, location!” It is really is about buying low and selling high. As you learn to identify the phases of the market cycle and make the right moves during each one, your real estate success will soar. •
> Continued from :: PG 93 Making the
Success This Seasonwith These Six Maintenance Steps
Right Moves in Every Phase of the Real Estate Market Cycle properties, especially A and B+ assets. Higher class properties will appreciate the most when the bounce comes and decline is the best time to get these gems for prices that will result in cash flow during a down market. Leave B- and C assets alone until the absorption phase. You may also want to find apartment complexes during decline. Just be sure there is enough rental demand and that population loss is not continuing in your chosen market if you do. bounce becomes obvious to many investors only when foreclosure inventory begins to get competitive again. Ab- sorption may see the return of multiple offers as major REITS and hedge funds start to compete for inventory. Prices increase as market conditions begin to favor sellers once again. Absorp- tion sees jobs beginning to return and unemployment easing. A good way to look at absorption is though it was the early springtime. There may still be snow on the ground, but it is melting, temperatures are warming, 4. IDENTIFYING AN ABSORPTION MARKET Absorption begins as prices stop falling. The
NO. 5 Prepare for an increase in weather risks Though you cannot stop a storm, a good mitigation plan can help alleviate the potential for mount- ing costs after a weather event. For example, mold is one of the most prev- alent secondary forms of damage we see in the event of a water claim. Have fans on hand to dry out your property or a list of several pros to help you clean up amid a crisis. Make sure you have a good way to stay in touch with tenants during an emergency event, espe- cially if someone is new to the area. NO. 6 Shore up your insurance coverage A periodic review with your insurance agent is always wise. Doing an insurance check-up can bring you greater peace of mind going into storm season and also help you better protect your property from risks that insurance may not cover. For example, certain types of coverage, like fzlood coverage, will need to be purchased sep- arately from your standard property coverage policy. Your agent should be happy to answer any coverage questions and deliver the best coverage solutions for
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