Los Angeles Investment Property – How Do Market Cycles Affect Property Investing?

When I was just starting out as a real estate investor hunting a Los Angeles investment property one after the other, my thinking was that if I buy a property right, then I can never lose money. That was totally wrong and flawed thinking!

It is always a good time to buy and sell properties but how you buy and sell properties will depend on the market. Five years ago when I first started in real estate, I had difficulty figuring out how my competitors were making money even if they overpaid on real estate properties. I didn’t realize the formula that I was using at that time was more appropriate for a totally different market!

Here’s another scenario three years ago when the property market became so hot.

I was doing rent to own way back then and I had difficulty figuring out why I was getting bad tenants no matter how hard I strive. I just could not figure out what I was doing wrong. The property market is supposed to be on the upswing so why am I having such difficulty.

Apparently, I am not the only one who was experiencing this. I checked my fellow real estate investors and they had the same problem. They were also having a hard time! I can recall that I found it difficult to collect enough down payments and even more difficult to collect rentals.

Today, I now know the reason why – it was the market.

Without a doubt, the market is affecting everyone, both seasoned and novice real estate investors alike. A typical example of this is well known real estate tycoon Donald Trump. Even THE Donald Trump had to struggle with bankruptcy way back in 1986 when there was an unexpected change in the market. One should, therefore, heed market change warnings and should never go against or ignore it. Your investment strategy must be in alignment with it. It is much like the saying “don’t fight the waves, just ride it” or “don’t go against the tide”.

It dawned on me that there are right and wrong strategies in dealing with every real estate market in any country.

There are different ways on how to realize profit based on different market cycles:

1. You can make what seems to be over payments for real estate properties and yet eventually earn a handsome profit on one market cycle.

2. You can agree to buy a property at a higher discount than what everyone is willing to pay on another market. If you do otherwise, you stand the risk of losing money.

3. For higher return on investment, remember the right market cycle when you need to sell as many real estate properties as possible. The more properties disposed of, the higher the earnings.

4. You can also go on a property buying spree on another market cycle.

5. There is also a right market cycle for purchasing commercial properties, apartment buildings, condominium units and houses to get maximum profit.

Had I been equipped with these information before, I bet my investment strategies in buying and selling a Los Angeles investment property would have been totally different. I could have profited more, invested with lesser risks and definitely with lesser headaches.

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