It’s as Easy as Getting Back on a “Cycle”
Wanna know how to double your money in Real Estate? How about buying a home at 33% off? Let’s go to school. We will use history as a guide. Do some Math. Study a little bit of Geography. Brush up on Economics 101. But, first a Spelling lesson – can you spell C-Y-C-L-E?
Historically, Real Estate and U.S. economics have followed predictable cycles. They are typically 12 years long, give or take a couple of years. Home prices have followed a pattern during previous cycles. The price doubles – and then (look around) they drop by a third. (Don’t want to scare you with Algebra.) So 2 times 2 equals 4, 4 divided by 3 equals 1.33. If you purchased at the bottom portion of a cycle for $200,000 and it doubled to $400,000 then dropped by $133,000 – it is worth about $267,000.
Here is the best part. Are you ready? Homes have dropped by a third and what comes next (oh, did I forget to mention there is a quiz) – they should start a new cycle and double in value!
If you are buying your first home in Southern California, you get 1/3 off! If you bought in the 1990’s but missed selling at the top of this cycle, and need to sell so you can buy a better home (or location), you still made a lot of profit. Pour it into the bottom we are hitting and ride the cycle. It’s like riding a bike. It never changes.
Next time: Investment Property Short Sales – with No Capital Gain Taxes?!