Whether things are looking up or looking down, everybody seems to be focusing on the past or future instead of the present; despite the fact that everything that you experience happens in the present. Most of the people who are in trouble today are in debt. Those who have no debt don't seem to be affected very much. Why are so many people in debt? Because they were convinced when they borrowed money that they would be able to repay it by either refinancing or reselling their homes at some point in the future. When they found out that this wasn't going to happen, they spent most of their energy lamenting the actions they had taken in the past rather than to start actively looking for ways to get out of financial trouble.
The vast majority of those who are now trapped in a sea of debt created in the past are once again looking to the future to bail them out. This time, they're not pinning their hopes on easy financing of rising equities. They are hoping that government will come to their aid at some point in the future with low cost credit and various give-away programs that will reward them for being foolish in the past.
Over and over I am asked how long I think it will be until (a) the market returns to normal; (b) the recession ends; and (c) when all the government bailout programs will take effect. All the while, hardly anybody in the market is jumping into the sea of opportunity that exists for entrepreneurs to buy and sell with very little cash or credit. There are a number of opportunities in today's slow market that are going to disappear into the past once the inflation that the government is fanning begins to be felt.
If you live in a “bubble” area where prices have dropped, and will probably continue to drop by very high rates until the inventory of unsold homes has been liquidated, instead of buying houses to fix up or to hold as long term investments, you should be buying and selling houses in good condition that need very little repair as quickly as possible because each day that you, or the seller, owns the house it is dropping in value. . .
FHA financing for home-owners is just about the only game in town, and a 91-day seasoning period is required to get these loans. But, if you only buy an Option from an existing owner, and sell it to a new buyer, there isn't any seasoning issue at all, and the hosues can be sold swiftly before its market value deteriorates.
