Some days it seems like all the smart people think real estate is dead. One of the larger real estate clubs in Milwaukee has changed their focus from real estate to a mix of other investment ideas.
Back in 2004-2008 it seemed like everyone was “investing” in real estate even though the numbers did not work.
I had a twenty something kid in my office in .. 2007?.. showing me his Excel spreadsheet and explaining how my model was wrong. I said ‘Wow! looks like you will be richer than Bill Gates in ten years.’ He said ‘Well, not richer than Bill Gates, but a Multi! Multi! Millionaire.’ He even offered to sell me a copy of his spreadsheet. Unfortunately I would not part with $500, even though it it did a nice job at predicting future property values at 25% per annum appreciation.
Last year a lender contacted me, suggesting I should buy all of his former rental properties. They were pretty rough, so I passed.
Today relatively few people are buying in our market, however the numbers can make sense now, while few deals made sense in 2006.
Remember there is a big difference between the wisdom of crowd and a crowd mentality. Go against the stream when, and only when, it makes sense.
Being a contrarian for no good reason is just a fools bet.
