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11/22/09: Where to Invest – Market Analysis in the New Economy

It’s almost unfair to call this a “new” economy, since the rules to real estate investing abruptly changed over 3 years ago.  But since the mortgage meltdown in the United States trickled down and around (making a large, sticky mess), its ramifications are still manifesting.  Just like when a football team gets a new coach (analogy for Russ) or a band gets a new guitarist (analogy for Robert), it takes some time to “gel”. If you’re not “gellin'” with the new rules of real estate, then this show is for you!

Robert arrived in the studio for today’s broadcast after 3 weeks, 30 flights and over 30,000 miles of flight time!  From his international travels, he brought back a few souvenirs, lots of pictures and several valuable perspectives on market analysis in the new economy.

In the cockpit for today’s show:

  • Your Pilot, Robert Helms
  • Co-Pilot and Financial Strategist Russell Gray
  • Navigator and Godfather of Real Estate, Bob Helms

We kicked off the show discussing the importance of market selection in the wake of the mortgage meltdown.  With so many areas having suffered steep declines in values, its tempting to go in an scoop up “deals”.  But if all the the gas isn’t out of that particular market yet, as good as the deal might look, you just might be catching a falling knife!  Robert shared the 5 Key Indicators he looks at when evaluating the potential of a market.

While the 5 Key Indicators aren’t necessarily something new, the ability of the average investor to leverage technology to access information certainly is.  Robert shared specific instances from his recent travels where he watched investors do in mere minutes what once took many days to accomplish.  And even though there are lots of deals out there because the economy is soft, the best deals will always go to the investor who is able to act quickly.

Another interesting discussion topic revolved around the idea of allowing the loan tail to wag the deal dog.  In the days of easy money, it wasn’t like this.  In today’s more conservative lending environment, especially in anything besides residential 1-4 units in the US, understanding how financing affects both your entrance and exit is crucial.

Of course, with Bob along for the ride, the young bucks were reminded that this “new” economy, while certainly with some 21st-century twists, is still something for which the lessons learned over six decades of investing still apply.  One thing that never changes is the importance of actually visiting the markets you hope to invest in.

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