Making Money In The Past

In the past few years, a lot of people made money buying a house, holding it a few months, and then selling it. It was almost automatic. Millions of dollars seemed within the reach of people all over America. Many of those millions came home to roost in the hands of entrepreneurs willing to take a chance on risking their own money and/or credit buying low and selling high. It was that simple. Buy at retail, let the market drive up the price, and sell at retail. Buy high, sell higher.

Some were able to buy pre-foreclosures and negotiate bargains. Some bought and held houses as rentals; managing them to produce cash flow and profit from appreciation. Others made huge profits in the foreclosure markets. Some created profit fixing up houses for sale. Some were just plain lucky. Others financed entrepreneurs who were doing all of the above. Some entrepreneurs were wholesalers who sold to others with low mark-ups; relying upon them to earn retail profits with which to pay them. Many made a living brokering both property and credit for a fee. Still others performed the same services for a share of the eventual profits.

Most of the foregoing entrepreneurs specialized exclusively in one particular market activity to the exclusion of all others. For example, some bought and sold mortgages carried back by sellers in various transactions. Others pyramided assets using tax free exchanging. Some were able to build their assets tax free in Roth IRAs. Still others managed property for a fee or used Leases and Options to control income and gain. Some specialized in "short sales" to capture equity and profit when they bought property which they later sold for a profit.

Let's not overlook land developers and builders who created subdivisions and either built or manufactured housing to sell into the retail market. Then there were financiers who provided credit to enable entrepreneurs to earn their profits. Regardless how entrepreneurs might have specialized in the market, specialization might at one point have been their strength, but it could well turn out to be their weakness in the changing future. Where do you fit into this scheme of things?

When markets evolve, regardless how successfully you might have been earning a living and building future financial security in the past, if you want to continue to do be successful in the future, you must change with markets. Now might be a good time to do a personal assessment of your skills and experience to see how you might use your talents to your best advantage in the future.

What does the future hold? If I really knew that, I wouldn't be spending much time writing a blog; I'd be playing Texas Hold 'Em in the stock market. I don't know what's in store for the future, and neither does anyone else. At best, all anyone can base future market predictions on are educated guesses. As the past has demonstrated, betting on the way the market is going to move is like forecasting the weather. There's a 50% chance of snow, rain, overcast or sunny somewhere; or not.

I know this isn't very comforting to the person who has become accustomed to almost instant profits in the past, but the unvarnished truth is that only by being able to do a wide of variety of things can one expect to profit over the long term in real estate. What are these things? Come down the yellow brick road with me and take a look at the possibilities. Hopefully, you'll find something that fits your specific talents and aptitudes; something you can do to continue to produce income and gain as an entrepreneur without having to rely upon the promises of your government or corporate America for your future financial security.


Reprinted by Permission. This article was first published at Call (972) 496-4500. Jack Miller passed away in October 2009. A few of us were fortunate to be able to attend some of his outstanding seminars and also to get to know him as a wonderful person. Jack appeared at MREIA meetings and was an international speaker and active investor, specializing in single family houses. He wrote a monthly investment newsletter and conducted seminars on Exchanging, Management, Portfolio Strategies and Options.

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MREIA (Metro Real Estate Investors Association) is New Jersey's oldest real estate investors group founded in 1982. Our mission is to aid, train, motivate and share information relating to real estate investing. We are dedicated to helping both beginning AND experienced investors. We serve the New Jersey-New York metropolitan area.

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