Minnesota Real Estate Investors Association, Inc.

Minnesota Real Estate Investors Association, Inc.

Dow Drops 1,000: Market Volatility Gives One More Reason to Encourage Private Money


Only mere hours ago we all saw live the Dow drop near 1,000 points in a startling amount of time. As I’m writing this the market has “recovered” but such volatility will not leave the minds of those who have their savings and IRAs in a stock portfolio that is certainly showing more red than they are accustomed to. To think that such a small country like Greece can trigger such waves because of the liquidity has compromised the integrity of the stock market and the following stories, finger pointing and possible domino effect that may be looming will leave these investors looking for a safe haven.

Suddenly the idea of investing into private money secured by real estate is looking a lot better because the institutional funding is removed, the once illiquid characteristic of real estate that was once considered a burden acts as a safe guard between a literal freefall.

It’s been a wonder why that stock market has been soaring while unemployment remains high, consumer confidence is a blank stare, and the actions of the government seem to be doing everything in their power to sandbag our economy. All of this aside, some of these concerns may stick out in the minds of investors who are frantically searching for a secure return on their investments and that opens the door for real estate investors to come in and bring these investors into the win-win situations that we create.

While the stock market has left a freshly bitter taste in the mouths of investors where losses are completely unsecured, real estate offers a perfect opportunity for real estate investors to turn them into private money lenders. There are so many incredible opportunities in real estate right now as we’ve hit the depths of our market that contract for deed payments rival the affordability of your average rent for an apartment with a comparable number of bedrooms.

If you look at Maslow’s Hierarchy you’ll see that shelter is one of the first requisites for a humans well being. People will always need a place to live through thick and thin… Stocks on the other hand are a derivative of the value of businesses that are tied into a larger system that trades derivates and given the liquid state of these derivates compared to the hard asset of a return secured by real estate the choice should be clearer.

The opportunity is now to convert investors in the stock market to private money lenders because whether the writing really is on the wall or not, the perception of volatility is self fulfilling. Both the stock investor and the real estate investor can both see eye-to-eye on the reality that the stock market is volatile and that investing private money into real estate that is secured is an appealing option… now more than ever. Communicate this clearly and what you’re bringing to the presentation table will be received with much more inviting ears.

http://www.mikejacka.com/Blog/post/2010/01/29/Real-Estate-Investors-Need-To-Start-With-Back-Page-An-Online-Classified-Site-Primer.aspx If you feel the same way as we do, let us know below by commenting on this post.



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short sale investing student9/14/2010

vicki@reijunkie.comI am in agreement that real estate is still the best bet, as a buyer's market is still there, and homeowners will be replaced by renters - so for me, short sale investing.

Equity Investors USA5/9/2010

tbhs34@gmail.comMike, Great article. You hit the nail on the head. Imagine what the effects will be if China was going through what Greece is experiencing. We can only buy so much gold but investing in real estate right in your back yard in extremely valuable and will become THE investment of choice for many with 401k's, IRS's and the like as the "American Dream" changes from owning to renting a home.

Dave Misukanis5/8/2010

dave@twincitieshousebuyers.comMike, What timely blog. I do agree with you on the market and converting some of those investors to private lending. It truly is a win win situation for all involved. in todays market where can an investor get between 6-9% on their money. I am always on hunt for these lenders. Hopefully we can convert more of them.

Vic Passinick5/7/2010

vicpasnick@hotmail.comIs there a clearing house or exchange to contact private money lenders? I am a Realtor working with apartment housing investors and other commercial properties in Fresno California, and have clients who realize the incredible bonanza of positive cash flow available in Fresno, with the depressed prices among the lowest in California. If someone is not intertested in investing directly in housing stock, they cam sure make solid profitable low risk loans to those willing to buy and manage apartment complexes and other real estate investments. Please contact me. I have willing, able, experienced investors, who can make money for us all in this market!

levi lewis5/7/2010

webtronproperties@gmail.comI have to agree with you. This is a great time for people with communications skills and negotiation knowledge. Exciting times for people with the right knowledge .

Sean O'Carroll5/7/2010

sean@ocarrollgroup.comMike: Excellent article and obviously very timely. I believe savy investors / private individuals will be the new lenders for the next few years. They will fill the void where the banks are not lending. I love capitalism!

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