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Booming Real Estate Profits From Baby Boomer Investing
n last week's article, our skin still attached.
called "Irrational
Exuberance, Part II?," I In this week's article, let's
discussed some of our concerns explore such a scenario. If you
about what is happening in the have been on one of our
preconstruction investment real teleseminars, you have probably
estate market. What many people heard me speak about the "Baby
have asked me is "if you're so Boomers" and the impact that they
concerned about the real estate are EXPECTED to have in the
market, then why invest so much southeast and the southwest.
with yourself and with the Without getting overly technical,
preconstruction MasterMind here is the short story:
Group?"
" We have an incredibly large %
The answer to this is really of our population moving towards
quite simple: we find retirement age over the next 15
preconstruction projects that years;
make complete sense EVEN WITH the
current market conditions. Many " A large % of these people have
people think about the markets as no intent on staying in their
one big entity and you either current locale;
decide you are in or out. In
preconstruction real estate, this " Even though many boomers are
is dead opposite of how we think. ill prepared for retirement,
Instead, we look for there is still a significant % of
preconstruction investment people with tremendous wealth;
opportunities that make complete
sense in this market and then, if " These people want to live in
we are wrong, we look (in places with good "lifestyles.
advance) for ways to exit with
With that body of knowledge return on my preconstruction
above, you can make great investment?
preconstruction investments A: I don't know. Maybe this year,
however most people want to maybe 10 years depending on what
overly complicate things. So you buy, market conditions, etc.
let's look at a typical From the baby boomer investing
conversation after someone has mentality, we just know that
been exposed to baby boomer there is a large PROBABILITY that
investing. somebody is going to want that
property badly within a 15 year
Q: How do I make a good window.
preconstruction investment with
minimal risk? Q: But I don't want to wait that
A: Well, from above, it really is long. How can I get in and out in
pretty simple. Find a place that a couple of years or less?
the boomers want to live, then A: Well this is a horse of a
buy, and wait. different color. So not only do
you want to invest in the boomers
Q: But what if the price drops but you want to time when they
because of all the investing are coming. That is a little
going on right now? harder but still doable. Now what
A: If you believe you truly have you are saying is that I buy now
a place that boomers want, ignore and once I buy, for some reason a
it and ride it out. With that lot of boomers start jumping at
many boomers (demand) looking for the chance to buy in. The only
so few properties (supply) in a way I know this can happen is if
few years, you will likely do for some reason, there is a lot
just fine. of people suddenly going to
become aware of your property. In
Q: So when will I see a good this case, you are strongly
relying on somebody's marketing but not super rich. The best way
to bring "eyeballs" to your I know to do this is imagine that
preconstruction investment. you have just closed out all your
real estate investments in a few
Q: Is there risk in this type of years and you are worth $5
shorter investment? Million. Where would you like to
A: Of course. You could buy in, live? What "lifestyle" would you
and the lending rules change, or want? Would you be near water, or
suddenly we start seeing horror golf, or mountains, etc.? Now if
stories in other regions about you know you don't think like
people losing money in real most people, you may have to
estate, and then on a short term alter a little bit and try to
basis, your preconstruction think what the majority of people
investment may decrease in value. would want that are worth maybe
As they like to say on Wall $1 - $10 million. Realize that
Street, that is not a loss until these people want homes for the
you sell. If you truly believe in most part. If you wanted to play
the longer term, then your this, then purchasing either raw
decision might be to exit quickly home sites (land) or the finished
or just wait until the boomers home may make sense.
start looking where they are
going to live. To me, it is very Q: Can you give me an example?
comforting that I know that I A: Sure. In the MasterMind Group,
have that backup plan. we just introduced a
preconstruction property in the
Q: What kind of preconstruction North Carolina mountains and we
properties am I looking for? just finished our Boots on the
A: This depends on the wealth Ground work there. The mountains
category you are seeking but are certainly a draw to many
suppose we are targeting wealthy people. When we first got on
location, we saw lots of other twist. It turns out the developer
properties that looked like nice is really good at marketing but
places that good be purchased for better yet, they are getting free
"½ of our target investment. Some exposure that is expected to
of these had great views on nice bring over 50,000 people ON SITE
lots. Quite frankly, we were a during the next year. Ok, this
bit concerned. might be a property you can buy
now and sell for a tidy profit in
Once we had gone to the property, short order..... If you're wrong,
our perspective changed 180 then just hold it a little while
degrees. We were taken to see a longer.
preconstruction development that
spans multiple mountain peaks and Q: That sounds nothing like a
truly has spectacular settings. preconstruction condo?
Each future homeowner will have A: That is correct but the
large 2+ acre lots that are concept is the same. Get into
extremely private. In addition, something where you are confident
there is an extensive effort to that a lot of people will want it
keep this development completely down the road, manage your risk,
natural (no lawn and hopefully make really strong
mowers----YEAH!!!). While hard to investment returns.
describe in a paragraph, this
property is unlike any that I As you will see in upcoming
have seen before. articles and project
announcements, we think much more
When you go on property and get broadly than just preconstruction
the full picture, I have no doubt condo's and we encourage you to
that you could buy and hold this do the same. In our opinion, the
for 10-15 years and make a great baby boomer market acts very
return. However, there is a differently than the "investor
market" and right now, we believe of properties.
there is lots of preconstruction
opportunities in the right kinds
About the Author:
Dr. Chris Anderson is a co-founder of http://www.GetPreconstructionDeals.com and is referenced in many venues including the New York Times and USA Today. Get a 3 month trial to his Mastermind Investing Group at GetPreconstructionDeals.com.
Source: www.isnare.com
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