Vulture Capitalism 101

We first learned the art of Vulture Capitalism during the bursting of the tech bubble. Investors savvy enough to keep their powder dry, war chests at the ready, and swoop in to pick clean troubled companies. The big prize for most of these companies during this round was not real estate but intillectual property (smart people!). Sure, there was plenty of real estate, capital assets and personal booty up for grabs, but the real deal was human capital (again, great employees at bargain prices).

Today, we are at the sill of another window of opportunity: the housing slump. The prize is obvious (ah, real estate), but the technique not so. The biggest question, as always , is when are we at the bottom of the trough. The problem, you'll never know until we see the sustained upward trend. It's like digging half a hole: you can't. It's always a hole! Likewise, you (nor any of the 'experts') can time the bottom. With real estate, the market is flodded with savvy investors as well as 1st time home buyers (not that 1st time buyers are not savvy, you may have, in fact, been sharp enough not to buy at the height of the frenzy. To you, my humble double thumb's up!)

Opportunities will continue to abound here and throughout the US for extraordinary real estate buys. That window, however, will not stay open for very long. There will always be buying opportunities, even in the hottest sellers markets. This real estate vortex, however, does not happen very often to this extent (our last major window was during the failed S&L debacle of the late 80's early 90's..the much maligned RTC (no, not the bus service)). Patience and due diligence will be the key to your success. Work with a truly seasoned Realtor, make sure you and the property qualify for financing (programs are changing almost daily) and act.

Depending on what government intervention happens, the number of properties may change dramatically, in either direction. Not a big fan of government interferring with our free market economy. That does not change what is happening (freezing foreclosures, banks working out suitable arrangements for those on the brink, etc).

We will weather this financial 'perfect storm'. Those that play the game smart will come out stronger than before. To quote a Paul Simon song, 'One man's ceiling is another man's floor'.

Where do you stand?