These days there are lots of people who are wondering how to keep
their income coming in. After years of a hot real estate market,
and constant appreciation, the upside of the cycle has ended and
the downside is at hand.

Over the past few months, many thousands
of lenders and real estate agents have begun to experience the
first market shift of their careers. Retail home sales are dropping
and thousands of lenders are being laid off or losing their jobs
altogether. Agents don't get laid off in the classic sense. They
just stop making any money when things go bad. But the good news
is, there is a way to keep your income coming in, no matter what
the market conditions are.

As an agent and an investor, I have experienced first hand the
challenges of maintaining income in a changing market. I know from
personal, hard won experience that there is only one way to survive
when you fish for your own supper. That is to always know what to
fish for.

You see, some kind of fish will be biting all the time,
but no single kind of fish bites all the time.  A good fisherman
knows how to read the water and weather conditions to determine
what to fish for, and what bait to use. Real estate is much the
same. In fact all business to some extent follows this principle.
To sum it up from my TREA training program, The Real Estate
Investors Guide To Buying Right, it boils down to one thing...

FUNDAMENTALS DICTATE STRATEGY   

For long term success in any business, and especially in the real
estate business, you must learn to adapt your business strategies
to get inline with the current market fundamentals. At present, we
have a buyers market that is being driven by high foreclosure rates
caused by over financed properties, and maxxed-out owners. In 2004
if you were a real estate agent working for a builder doing new
subdivision sales in Las Vegas, you were probably pulling down 6
figures yearly in commissions. Today you may be lucky to afford
your car payment.

 In many areas, the retail strategies that produced high income in
the hot market of 1996 to 2005 are no longer working.
The market shift that we have undergone since the beginning of 2007
has turned the retail real estate and lending businesses into a
game of survival for many.

Personally, I am experiencing high growth in my business activities
as a real estate agent. This is because I happen to cater to the
market where all the current buyers are...
The investing market.

 

Fundamentally, my strategy is right in line
with todays market conditions. There is always a strategy that
works in any market. The key is to recognize it in time to take
advantage of the changes before they catch you asleep at the wheel.

Given the price run ups of the past 10 years, and the over
abundance of high LTV loans, it was only a matter of time before
the fundamentals began to manifest themselves in the form of higher
foreclosure rates.

 

I saw the trends beginning to develop in late 2005,when I first noticed that we were

no longer looking at typical fixer upper properties for leads, but rather, we began to

see a lot more houses that had been renovated then within a few months a foreclosure had ocurred.

I started to realize that the price appreciation had finally
outstripped the income potential in most areas. In short, the costs
to get in were getting too high. By 2005 it was becoming nearly
impossible to produce adequate cash flow. I knew that we were
headed for disaster if we kept buying houses at prices that were
too high to produce enough income for our investor buyers. So, I
shifted strategy away from buying anything at that point to address
this fundamental situation.

The professional real estate media has (finally) caught up with
this 2 year old trend, and for the first time ever, Realtor.org is
touting the benefits of working with investors in their current
issue. NAR and others are realizing that the "hot" market sales
models aren't working in most markets. As a result, they are
touting business strategies that used to be discouraged and even
forbidden by some brokers - specifically, working with investors.

Why? because given the current market fundamentals, it makes
business sense to avoid or reduce sales in retail markets in favor
of investors who have been waiting for these great buying
opportunities to manifest. Make no mistake, professional investors
have been watching market trends closely, and they know that now is
the time. But those who don't read the fundamentals well enough to
see the need for strategy changes, have been caught with their
proverbial pants down, wondering how to keep a job or keep an
income as the downturn grows more serious and prolonged.

Fundamentals always dictate strategy. There is a place that is
"hot" in every market cycle, the trick is to know where that place
is, and put yourself in the middle of it.

What are the fundamental conditions in your local market? Can you
read them and make assessments about how to adjust your clientele
to take advantage of your current market conditions? Do you know
what conditions will promote the use of short sales instead of
retail sales?

 

Do you understand the critical differences between
building an investor clientele versus retail owner occupant buyers?
If not you may not survive long term in the real estate business,
either as an agent, a lender or an investor.

 

Most market cycles last about 5 years on the up side and on average about two to

three years on the down side. This market has had a 10 year run up.

There are big adjustments in store for the near future.                 

If you have been in real estate successfully for more than
15 years then you know exactly what I am talking about. You gotta
go with the flow of the market fundamentals, and make adjustments
in your processes to accomodate these fundamentals. A market with
high appreciation is drastically different from a market with high
foreclosure rates. Understanding how to adapt your business
strategy to market conditions is key to your long term success.

Anyone can succeed for a while, but it takes adaptability and
insight to succeed for a lifetime.***

The Real Estate Arena is committed to helping its members
understand how to work with investors in this buyers market, which
is just now really beginning to develop. Our "On Demand Training"
inside the TREA virtual office offers cutting edge tools,
information and education for investors, and the agents or property
locators that serve this important market.

 

TREA members learn how to use technology to grow their businesses more

effectively, receive weekly updates on important training issues as well as insider info

on market trends and developments that can help you build your business faster, for

less money and develop a broader customer or client base. Access to thousands of

other TREA members can help you find buyers or properties across the nation, and

expand your horizons well beyond your local market. You also get access to

information about the hottest investing strategies, and you'll discover how others are

succeeding where many have failed.