Does the market feel like you are in the opening sequence from Terminator II? Are you fighting amidst the wreckage of the previous boom? Surrounded by foreclosures, scarce money, economic gloom and doom? Real estate going into nuclear winter? That’s what market bottoms feel like and as investors we need to get comfortable with that feeling because this is our time to make solid, reasoned investments that produce good results on improving fundamentals. Conditions like this create the opportunities for savvy investors who were patient through the bubble and have waited for the speculative, greater fool market to come to its inevitable end.
Many great real estate investors got their start in rough times like Sam Zell of Equity Residential for instance. He started out buying properties from distressed owners in the late sixties. Tom Barrack of Colony Capital waded through the carnage of the S&L meltdown to buy properties at a discount. Barry Sternlicht of Starwood Capital also started in the wake of the S&L crisis buying multifamily properties. What will your story be? It’s time get to work and seize the opportunities. Put on your hardhat though because it’s about to start raining real estate, and while not every distressed property is worth pursuing if you stick to your niche and learn your market good deals will surface.
At Ashworth Partners Ltd we are focused on multifamily properties in selected markets that we’ve identified as being positioned for growth through the 2020s. We believe that demographics and market forces favor this sector and are actively pursuing deals that fit our model now. We operate under Warren Buffett’s advice to never count on making a good sale; have the purchase price be so attractive that even a mediocre sale gives good results.
That feeling in the pit of your stomach that there’s nothing good in the world? Get comfortable with it, make it your friend. To put it succinctly, buy when you are depressed and sell when you are happy.
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