It may sound hard to believe, but, when it comes to where and what kind of apartment or commercial property you should be looking at investing in and or becoming an owner of, the taxi cab driver and TV reporter are sometimes your best indication of what kind of property you should choose.
I know, sounds like I may have finally fallen off of my rocker. Upon reflection, it does sound a bit crazy, so, having said this let me explain it in a little better detail for you with a story.
A few months ago I needed to do some traveling and I flew into a well known city located in the SE part of the US.
I grab my luggage from the airport and find a cab to take me to my hotel. The gentleman or cabbie driving me was very helpful. Not only was this cabbie helpful with my baggage but he also helpful in telling me that I should not buy any real estate in this market.
How did a cabbie convince me that this was NOT the place to buy real estate?
By proceeding to tell me that the marketplace was hot. People are buying properties and turning around and selling them for hundreds of thousands more the same day or in some cases the next day. If I was smart he says I would be going to buy this property so I could profit on this too.
No offense to my cabbie friend OK. But, if a cabbie is telling me how hot the real estate market is that tells me that the market is about ready to either have a major slowdown or a huge correction.
Why? I will tell you in a bit.
So, I get out of the cab and proceed to my hotel room. The first thing I do upon getting there was flip the TV on. Well, while flipping through channels I run across a local TV news program and a local reporter is telling me about, you guessed it, how hot the real estate market is and how much money people are making.
Once again, the decision NOT to buy here was made even stronger to me.
Some of you may be thinking something along the lines of, “Darin, you had two people tell you how great the market was and this was all in the same day. So, why not buy there, wasn’t there evidence that the market was good?
Yes, there was evidence, but let me tell you something. When the “common folk” such as a cabbie start to tell me what kind of property I need to be investing in that is a sure sign that this is the property to avoid. In other words, if these folks know about it, if folks “on the street” and “not in the real estate know” are experts in this it is time to run away from these kind of investments and this kind of property.
Look what happened in the recent dot com bust? Same kind of thing. Only the same kind of rules DO apply to real estate as well.
The big lesson? When it comes to owning and investing in apartments and commercial investment property, the smart thing is to do is WHAT OTHERS ARE NOT DOING – Make sure you do not follow the masses. Do what 99% of the people don’t do.
This will be the best path to success for you in the apartment and investment real estate business. Let me tell you, you will be tempted. Don’t fall for it.