Real estate cycles, both up and down, are nothing new. Every investor who has been successful enough to stay in business for a while has experienced them. Real estate cycles create winners and losers alike. The secret to survival is learning how to surf or stay afloat. If you’ve ever watched surfers you can’t help notice how they roll with the waves. Good surfers are not toppled by even the most treacherous waves. They even look forward to experiencing the thrill of meeting them head-on.
William Nickerson, my early mentor, listened to his college economic professor as he addressed the graduating class at a prestigious California university. He said: “You might as well realize that the time for opportunity is past. There’s no longer any use to save for investing. The best you can hope for is to keep a steady job and stay off welfare. Nobody will ever again be able to build an estate big enough to produce an independent income. The year was 1932..
The world is full of “Chicken Littles” who are always telling whoever will listen that the sky will surely fall by a particular date that they pick. I’ve yet to see even a small piece of blue sky lying on the ground. I’ve even quit wearing my hard hat, except on those rare occasions I visit a tenant to pick up a late rent payment.