30 Days to Real Estate Cash 51
you need to now, because it’s true and one of the reasons you’ll profit from this book.
To explain that statement and why it’s true for successful inves- tors, we should talk about normal cyclical real estate markets and the way most buyers go into home deals. Let’s use the very pronounced real estate cycle that was in full swing going into 2003 and beyond. The real estate markets in that period, in just about all areas of the country, were going straight up. Home prices were rising at double-digit rates every year, and in some areas it was just plain crazy how people would line up and get into bidding wars buy- ing homes. Buyers were buying $100,000 homes hoping to sell them quickly for $125,000. They were buying $190,000 homes hoping to sell them soon for $225,000. In hot markets like those going into 2006, it seemed like any- one could make money on real estate no matter what they paid for the home, since it would be worth more in a few short months. Buyers were speculating on rising prices, and that’s how bubbles are formed. The bubble is the peak, the absolute top that is reached just before everything collapses. When that bubble burst, years of pain were in the cards for those buyers who bought at the wrong time. Don’t get me wrong; I made money on the way up. And in a market like that, I’d be teaching you different strategies in this book. However, that market took a deep dive beginning in 2007, and we’re not likely to see that type of price action for many years to come.
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