Given the current market, investing can seem daunting to most.
However, navigating a distressed market doesn’t have to be an impossible task. Believe it or not, you have access to all of the tools you need to better equip yourself for working in the current market. Sometimes all we need is to be pointed in the right direction, or find the right perspective for our outcome to be dramatically changed. Don’t underestimate how clever you are and what you are capable of.
Here are my top 4 keys for finding success in the current market:
1 – Utilize Technology
In the past 10-15 years, technology has dramatically affected the market and the direction it is moving. Technology is always changing, but can be a huge asset if used wisely. Technology allows us to learn markets and make deals without actually being present in a certain location. You are able to get 3-D floor plans, track traffic patterns, hire someone to fly a drone and send you footage of properties, and so much more. Today’s technology has opened the door to a new way of investing. It also allows us to form connections with others and boost our reach in ways that we never would have been able to a couple years ago. Finding ways to have technology work for you will allow you to stay ahead in investing.
2 – Learn How to Leverage
I can confidently say that without the skill of learning how to leverage, I would not be where I am today. The only reason I was able to succeed so quickly in real estate was because of leveraging knowledge, skills, people, and money. In 2008, I hit a low point where I experienced a few properties foreclosing and I ended up with negative money. I had no idea what to do. I started going to a book store and reading books. The first book that taught me how to leverage was Tim Ferriss’s The 4-Hour Workweek. I was introduced to the idea of 10X-ing everything and leveraging others’ knowledge so I didn’t have to learn by trial and error. Books are the secret of leveraging people’s 10-20 years of experience. For 3-4 hours of reading, that’s a pretty incredible trade!
When I started out in my investing journey, I truly believed that I had to be the guy that knew everything and could solve every problem. Over time, I began to realize the power of honing in and strengthening your skills while surrounding yourself with a team that has complementary skills as well. When you leverage others’ skills, it allows you to magnify what you are able to do. If you want to go fast, go alone. If you want to go far, go with a team. Including other people allows you to avoid hyperfocusing on one aspect of investing. Once you are able to leverage other people’s knowledge and strengths, you will better be able to leverage other people’s money in investing.
3 – Spot Hidden Markets
In every single market, there are multiple hidden markets. These can be spotted by studying different trends and how they overlap. For example, here are three trends that are happening right now:
- Baby boomers and millennials are not wanting to own houses–most people want to live in a house and not deal with the upkeep.
- Apartments are getting smaller–while apartments are growing in popularity in urban areas, they are now being built at an average of 600-700 square feet.
- Houses are getting larger due to cost efficiency– the average single family house is around 2600 square feet. These three trends have all worked together to create a gap in the current market.
Institutional capital is being aware of this and building 1500 square foot four bedroom houses with a small backyard and the same efficiencies as a multi family unit. This is an untapped market that has unending capabilities. Spotting hidden markets can take some time and creativity, but with the right awareness, anyone can do it.
4 – Study the Trends in Other Markets
Studying other markets can be a gateway into predicting and understanding patterns in our current market before they actually happen. Currently in our market, we are seeing supply chain disruptions, low interest rates, and the beginning of inflation. We can look at history and other countries’ trends to help us predict and understand the effects these things may have on our future. For example, if you are interested in understanding how low interest rates can affect a market, Japan is a great place to study. Japan has had elongated periods of low interest rates and can allow us to see how that may affect our market. Many of the issues we are seeing right now in our market have existed before. Revisiting our own market history can allow us to better predict the outcome of different trends within the market.
Want to hear more keys for navigating a distressed market? Listen to my podcast episode with the Real Dealz Podcast.
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