Wading through the Chaff to get to the Wheat

I was perusing the internet looking for the latest and greatest information on real estate markets. Looking locally, nationally and internationally to find the state of the real estate economy. I spent hours looking about a wide variety of topics from foreclosure rates, interest rates, days on market, sales price compared to list price. You name it I was looking.

I found information on how the Puget Sound area has been spared the foreclosure rates that most of the rest of the country has been experiencing. I was intrigued by the foreclosure bus tours that have been created in some of the hardest hit markets. Also, the property buying tours that are being led to Mississippi, Missouri, Alabama and Louisiana to take advantage of the tax deals that were created to spur economic growth.

There are a lot of things happening out there. Not just the typical buy and hold strategies, some creative, some traditional and frankly some pretty stupid stuff that borders on fraud. I am amazed sometimes at what some people will do with their money.

When you look at all the information out there you can not help but be overwhelmed. Imagine if you are a brand new investor trying to make money and are being offered some of these “Pie in the Sky” products and services. Some are truly scary indeed.

I am very involved in my local market. I invest on a daily basis. I know the new laws that are going into effect here in Washington. Yet I am hearing radio and TV commercials for national investing gurus coming into the market selling products about foreclosure and pre-foreclosure investing.

I know from experience that these groups are sending their top sales people in to do presentations. They are putting groups of 50 – 200 people in a room and selling them foreclosure investing education. I have no problem with that. I have been in the audience as well as on stage before doing the same thing. The problem is these new people are going to spend the money not realizing the new laws that are going to be in effect next week that will make what they are being trained to do useless.

If they go out and operate their business as they are trained to do, they will be setting themselves up for some hard times ahead. They are not going to be ready for the new laws. They will send marketing that causes them to be Distressed Home Consultants. They will not understand the full impact of that on their business.

If you know of a new investor, please let them know that they need to change the way they do business. They need to comply with the new law or they will end up paying for it in the end. Save their business and let them know they need to update their business before it is too late.

Being an investor entails risk by nature. Minimize it to the greatest possible extent through education and compliance. Balance the risk and reward rather than just gambling on making money without the proper preparation.