"Every Captain Knows, You Turn Into a Tidal Wave To Survive It..."

My wife and I went to see the new Poseidon (Adventure), and while the movie was quite lame, (o.k. it was not as good as the original and I'll leave it at that) it did point up a very important tactic for boats and for investors...

... You turn into a tidal wave. The reason the boat capsized is because the wave hit it on its side. Many years, grey hairs and pounds ago I use to crew, as in row. Crew boats are very stiff and sturdy, but they are also very light. Often times going down the Potomac, a ship would pass by and create a huge wake. If possible, you would put your oars out and simply buoy up and down with the wave. But when ever possible, the best strategy was to ride full force into the wave.

The real estate markets (across the country) are changing. In some cases, the market is just catching its breath, but in many cases it is a pause before the tidal wave comes crashing down, and if you are in a market that is about to come crashing down, you better start turning that boat into the wave and rowing like crazy.

Specifically, now more than ever you need to pay attention and respect to the fundamentals, like using MAO to calculate offers, and more importantly learning to use creative strategies at acquisition that will carry you through the coming changes to most markets.

Now is not a smart time to be paying "top dollar" and using "expensive money". If you are in the middle of a rehab project - get it done, and get it done in such a way that you are going to be the "best value" in the market, not attempting to set new high price records. If you are in the process of acquiring properties, think of ways you can purchase and get in "lite" as in with little to none of your money.

And if you really want to take advantage of the coming change, learn everything you can about foreclosures and short sales.

Historically, foreclosures in this country have hovered around 1% to 1.25%. In the state of Ohio alone, foreclosures have already surpassed 3%, and many parts of the country are about to follow. Most interesting is that the economy in most parts of the country is still "solid", so in most cases, the issue is not jobs, its interest rate (hikes) and too many properties on the market. The "too many properties on the market" issue will take care of itself - interest rates are a different story.

In future blog posts I'll talk about why foreclosures will skyrocket this year, but for now know this...

... A tidal wave is coming, start turning the boat - hard!