Time to Reposition Your Real Estate Portfolio!

Media Frenzy

The Media has been in a complete feeding frenzy for quite sometime now.  The media's portrayal of the capital, credit, and real estate markets and the crisis that we find ourselves in has been horribly negative and dramatic, but how else will they sell papers, print ads, airtime, etc.  The media has not been nuetral or unbiased.  They have completely ignored the positive signs that do in fact exist in today's market that indicate this will not be another Great Depression. 

The media has done an excellent job of instilling a deep seated fear, panic and paranoia into our society.  Everyone is frozen by fear and unable to move forward, which has thereby created this Great Recession. 

The Great Recession

I've coined the phrase: the Great Recession.  It has been like the perfect storm with all of the markets essentially freezing at the same time.  I think the Media will come up with a name like this in order to sell more papers. 

While the Great Recession may be a true enough label, and this market is certainly the most challenging market cycle that I have ever been through (I've been through a total of four now).  I can also say that this market cycle will be the most important buying opportunity of anybody's lifetime no matter what market you are invested in.

The investment opportunties in today's real estate market or any market for that matter, especially for those investors who have cash positions, are amazing, and those investors who choose to move forward and take advantage of this real estate market will be well rewarded.

Courage and Understanding

This market does take courage and understanding.  Investors who have the courage and understand that this real estate market is just going through an over due market cycle, albeit an extremely difficult one, and that the markets will come back will be the investors that will reap the great gains.

Time to Evaluate, Assess and Reposition

Now is the time to evaluate and assess your real estate portfolio in order to determine what repositioning or tweaking is required so that your real estate portfolio is ready and prepared for the next market cycle.  Sell your non-performing or under-performing real estate assets and reposition into real estate assets that should do better in the coming recovery. 

Lock In New Real Estate Assets at Lower Cost Basis for Property Tax Purposes

Use the 1031 tax deferred exchange in order to defer the payment of your capital gain taxes during your repositioning process.  This will allow you to keep all of your cash working for you, and it will allow you to 1031 exchange into your new property at a much lower cost basis for property tax purposes.  Position yourself now so that you are ready for the market.  Don't wait until it gets here like most investors will. 

Comments

[Walt Ballenberger]

I don’t agree with all you say regarding the scare tactics of the press. There are real problems out there that are more than fabricated by headlines. However, I do agree that you are right about the fact that unprecedented opportunities for investing in real estate are available right now for people who have the cash to do so. Interest rates are almost unbelievably low, and home prices have dropped drastically. Unfortunately many people who do invest in real estate were active during the boom, and they may be caught being underwater on some investments. I was shocked recently to find out that 80% of the mortgages in the Las Vegas area are under water right now. In Phoenix it is something like 66%. What a mess.