“Buy low, sell high.”  These words have continued to ring true throughout history.  As with any timeless principle, some things never ‘change with the times.’   As author George Clason stated  in his book The Richest Man in Babylon, that this basic principle of finance is ‘an insight that will aid one to acquire money, to keep money, and to make their surpluses earn more money.’

It is amazing to me how such a simple concept can be so foreign to the majority of people inj society.  They imagine having lots of money and freely spending like their supply is limitless.  Without regard for how hard money is to come by, new lottery winners are soon bankrupt when their “supply” is sadly exhausted.

It really comes down to discipline, doesn’t it?  If one cannot discipline himself to budget hie funds, account for depreciation, discern markets in advance and allow for a financial “rainy day,” he will soon be in the poor house.  Thus the expression: “A fool and his money are soon parted.”

This is one reason so many suffered heavy losses in the real estate market starting late 2006.  Without regard for the grossly inflated market conditions, many continued to buy and/refinance properties, indescriminately enjoying their new-found “wealth.”  Nonetheless, their losses can be our gain.

Applying the principle to “buy low, sell high,” savvy real estate investment professionals everywhere are cashing in.  They have seized the opportunity by buying cheap homes and either “flipping” them for a quick profit, or they rehab and manage as an income producing rental for long-term gains.  Cash home buyers have a distinct advantage as they can avail themselves of wholesale deals on properties that others cannot acquire using conventional financing.  Banks just operate fast enough.  That’s why we buy houses for cash all the time.

Presently there are hundreds of real estate “wholesalers” across the United States.  These businesses are often operated on a local level and often out of the wholesaler’s home.  In fact, they provide a very good service to cash home buyers everywhere.  They may lock up a purchase in contract and subsequently assign that contract to the first buyer that comes with all cash.  They take a modest profit say, 10%, and leave the major margin for their buyer at 20-30% below market.

One such company is now offering deals in numerous markets simultaneously.  They are known as INVESDOOR CORP. and have territory managers in several metropolitan areas.  You can visit their website at www.invesdoor.com to see how they have turned a negative economic condition into an extremely lucrative one.

There are still millions of foreclosures to hit the streets in 2010.  This will tend to hold off any “recovery” in the housing market prices nationwide for some time to come.  In the meantime, opportunity knocks constantly every day and will continue to offer real estate investors great deals on cheap houses providing huge profits as a result.  Yes, eventually prices will inch up, but we will likely never see this kind of opportunity again in our lifetime.  In this market you would be hard pressed to sell your home fast any time soon.  But if you are looking to break out into your own REI business, now is better than ever!

It is amusing to me to hear the variety of opinions on the economy.  It’s funny how “experts” seem to emerge onto the scene while people grope for answers that would, hopefully, reveal a ray of hope.  Nonetheless, our economy will do what it will do regardless of what the pundits predict.

Earlier this year many housing markets across the country saw a 60% decline in retail values before the summer.  Then the typical occurred.  The 2nd and 3rd quarters enjoyed a slight gain in some markets while in others at least a slowdown in falling prices.  Now some realtors are so bold as to predict a slow steady rise in home values.  Yes, they will have us believe that it will be smooth sailing in the housing market from here on in.

Let’s examine this line of thought.  Better yet, we will look at the facts and see whether or not these guys are really in touch with reality.  Most of us have heard of the principle of “supply and demand.”  It’s really very simple.  Price is predicated upon the demand for a product balanced by its availability.

Back in spring 2007 potential buyers began to hold back after observing a winter where over-inflated home prices were no longer inflating.  When the seasonal market opened in the 2nd quarter buyers were now reluctant to pay prices without regard for the usual cautionary considerations like before.  It was a bit of a sobering time for many.  Since then deflation has been the trend.

Now, traditionally families prefer to move during the school summer break.  How many are content to transfer their family’s residence once school is back in?  Not most.  Hence, there is greater demand during this time and prices are logically driven upwards…….even if only a little.

Recall the federal mandate to banks temporarily holding up the flow of foreclosures hitting the market.  This occurred nationwide during this time of greater demand.  Where was the supply now?  With a sizeable percentage of all listings on the market held back (foreclosures), the falling values across the board would naturally slow if not reverse slightly.  And that is exactly what the market experienced.  The supply was lower while the demand was higher.

What, then, does this spell for the near future?  Well, peak season came to an end and September brought a new flood of foreclosures hitting the streets.  The tables had turned once again and now supply grew while demand diminished.  The massive number of foreclosure files yet to be processed is an indication of a steady supply from desperate sellers.  Thus the trend will likely continue in a downward direction at least till next spring.

Furthermore, the profiles of families in default have evolved from the subprime arena to “A paper” loans to families who could, in fact, stay in their homes but will opt out for financially sound reasons.  These are folks who are a bit more sophisticated and may have larger household incomes than the prior group.  Many could still make their payments but choose to get out from under the huge debt that the market has dealt them.  Many families see a quarter million dollar sink hole (or more) and will choose to short sell the home, wait 2 years and buy the same home for much, much less.  Notwithstanding the moral dilemma, many find that it just makes good economic sense.

The foregoing scenario presents some interesting real estate investment opportunities for the cash home buyer.  That’s why we buy homes all over the United States during these market conditions.  While the market trend may not be as favorable for the retail buyer, cash homes buyers in most U.S. markets are making insane profits by skillfully applying the simple principle of “supply and demand.”

So you want to start your own real estate home business and you need advice. Are there real estate investment experts that one can turn to for straight answers to the many challenges you will face? The fact is that there are a plethora of so called “experts” selling their versions of methods that may or may not have made them “millions” in years gone by.

I don’t doubt that certain techniques have proven useful and profitable in select markets at certain places in time. The question is: “What value do these have NOW and, in my neck of the woods?” Face it: There is no “magic bullet” and no singular program alone is the answer. Here is where the concept of mentorship comes in. Whether you are at the “real estate investing for beginners” stage or you have flipped a few properties in the past, working under the direction of a real estate investing expert with the patience to teach is the very best way to branch out into your own REI business.

Today, a number of REI “gurus” have jumped on the “mentor” bandwagon, offering courses and a form of mentoring through which the student is coached by one of their trained staff. In almost all cases, the coaches have absolutely no incentive or vested interest in the student’s success. As one famous real estate expert who had his own TV show stated, ‘there is more money in selling the information than in flipping houses.” Here is where extreme caution is needed. Beware of simply buying into another program (many of which cost $1000.s, even $10,000.s) that has an expiration date. That’s right. Most of these programs have a very limited value as they 1) never put you in touch with the real expert and, 2) have no vested interest in your individual success. Sadly, there are hundreds of thousands of Americans who wander from program to program, spending countless thousands of their hard-earned dollars learning and never doing.

When I began my mentorship program back in 2008 I determined to accomplish a few key things that I felt would set my company apart from the rest of the pack. First, I believe that a mentor is most effective when they have a vested interest in the individual success of the student. Student and mentor need to be partners while the student maintains their autonomy as an independent business. Second, the program must be flexible and ever adapting to the economy and local market conditions of the student. Techniques are fine, but they change. I prefer to teach principles which don’t change. I also have a corporate staff that consistently does research and development, seeking methods that work with our ever-changing market. Finally, my mentorship (www.invesdoor.com) program follows a “mentor for life” philosophy. We have no expiration date for active students because it is never outdated. The network that my staff has developed gives each individual REI business in the program the leverage to do greater volume. There is strength in numbers and this alone gives the real estate home business a huge advantage over the rest.

Personally, my mission as a real estate mentor is to find and nurture my future partners in this REI business. Ultimately, my team and I would like to have a core of “superstar” students that will move onto bigger and larger investment opportunities with us. Remember that, while there may be some good programs out there, true mentorship must manifest those three earmarks spoken of earlier. If not, it could be just another money pit like so many in the past.