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Real Estate Bubble Talk for Real Estate Investors

Are you afraid to invest in real estate because of a pending real estate bubble? The news has been filled with real estate troubles including too many houses on the market in some areas, a slow down in sales, and dropping prices.

What’s behind all this bubble talk?

Before you give any substance to warnings about a “real estate bubble,” look closely at the source. Many stock brokers jump on the bandwagon of real estate doom to get investors back into the stock market. Also, many negative reports originate from mortgage lenders who want to keep the mortgage insurance rates high and keep the insurance premiums coming in for loans on houses that have appreciated.

Early in 2005, I was invited to go to Philadelphia and participate in a “real estate bubble” discussion on Ch 8’s “Money Matters Today.” Television reporters, newspapers, and media hype love scaring you to grab your attention. On the TV show, I defended the real estate market.

So, what happened to the real estate bubble in 2005

I can’t speak for all investors. If my family had been scared into discounting our investments, selling out, and not buying more property in 2005, we would have lost a million dollars. We bought and held houses. All of our property increased by 20% – 35% and the ones we fixed increased in value even more. In particular, for one home we paid $120,000 and spent $10,000 in repairs – within the year it appraised for $325,000.

Who profits from the real estate bubble?

Besides media scaremongers, mortgage insurance providers, and stock brokers, real estate investors make even more money. What’s that? How do real estate investors make money from the real estate bubble? They take advantage of desperate home sellers scared by the media.

In January 2006, we bought an investment property that the home seller, in the midst of a divorce, discounted for a quick sale. The $340,000 property appraised for fifty thousand more than the purchase price. Now, we could quick sale the property for fast cash, but we’re in for the long haul. The property has great development potential. So, we’ll let the tenants pay for the mortgage and maybe tear the small house down in a few years. A half acre, one lot away from a future marina near new condos, has many possibilities.

Keep the bubble talk. People always need housing. The more you hear about the pending burst, the more money real estate investors CAN make.

Do Not Spam In Real Estate Marketing

Spam is not what people like. When people get mail that they do not like, they call it obviously JUNK MAIL. Everyone knows and hates junk mail. So when you ask someone what was in the mail and they say junk mail you already know that it was people just sending out advertisements and things you did not ask for.

When it comes to real estate there is also junk mail or what I call SPAM. Way to often I see real estate agents giving me their card or some postcard in the mail with their picture or something on it. The first thing I think of when I get this is “I did not ask for this”.

I often get this one real estate agents stuff in the mail on a consistent basis that I did not even ask for and it becomes really annoying. As I look at his advertising it just makes me think less of him as a business person because he is not following one the unsaid rules:

Only give things to people when they ask for it.

Please as a real estate agent do not go overboard with handing out what I call your advertisements. In other words you do not want to be a commercial on TV where people want to change the channel.

In email marketing, according to the CAN SPAM ACT of 2003, you can have one email that is an advertisement email that people did not ask for or sign up for. However you can not send more after that unless the person asks for more.

The same goes for business in general, however I see way to many real estate agents who are hungry for business and shove their services into many peoples faces. The goal is to have the people come to you not the other way around.

So do not send people who have not asked for your advertising cards, brochures, postcards, etc. People will get highly annoyed if you consistently throw stuff in their face.

You will become a much more effective real estate agent if you are on the good side of people, not the bad side. The best way to do this is to not SPAM them.

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