Making Money in a Bear Market

During times of rapidly rising real estate prices, you have to go out of your way to actually lose money selling houses. You can make money hand over fist, in spite of yourself. And many people do. But when the economic climate changes, they become lost and get out of the real estate, thinking that they have to wait out the bear market and then get back in years later, when the going is easy. By dropping out during a downturn in real estate, investors actually miss the best opportunity of all.

During a slow real estate market it is possible to accumulate property at cheaper prices. And it becomes a bargain basement, as more and more people sell their homes to raise money to pay other bills. Those investors who take advantage of the lower prices available during bear markets in real estate can pick up rental property, vacant land, commercial property, and a house or two for themselves, at discount prices. When the price of real estate eventually starts to go back up, they are sitting on a gold mine.

Another way to make money in a bear market is to do owner financing. If people are having trouble getting money from banks or mortgage companies, you can sell and finance the deal yourself. But if you finance a loan yourself, you can charge higher interest rates. And if the person doesn’t honor their agreement to make payments, you can take back the property and keep whatever payments have already been made.

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Real Estate Investing