Real Estate Investing tips from Phil Falcone #1

Mar 25th, 2011351 Comments

Have you ever felt like you may be addicted to real estate? Then you don’t want to miss this video. Phil Falcone, the ultimate real estate addict, will be sharing with us what he has been up to lately. He is going tell us about his 2020 vision for real estate investors today. It involves strategies for buying real estate with no money while keeping the properties without the support of banks. He will also be telling us about his new real estate company sure to interest investors and sharing some of his latest commercial real estate transactions. Don’t miss out on Phil’s fun outside the box approach to the great business of Real Estate investing.

Is it time to Get Busy Buying? You know it is!

Mar 12th, 2011297 Comments

Phil Falcone of Addicted to Real Estate with Ron LeGrand

Timing the real estate market looks so easy when you use hind-
sight and so easy to determine what was going on, but when it’s
actually happening to you, trust me, it’s not that easy.

“ Timing and strategy are the red woods of real es-
tate success. Everything else is a bonsai.”

Robert wrote a terrific book in 2002 called Timing the Real Estate
Market that I read in 2005. I met Robert while he was on a na-
tional speaking tour and purchased his book that evening and
read it a few days later. He has a semi sophisticated system of
determining exactly when the real estate market is at the top of
the peak. I don’t know if I buy into all his scientifi c mathematical
equations, but I did enjoy his book as well as the advice that he
dishes out from it. Robert says the meek may or may not inherit
the earth, but it is almost guaranteed that they won’t make the
most money in real estate. Timing and assertiveness pay the big-
gest dividends in the long term.
Today I simply use all of the information at my fi ngertips, such as
the many articles on the Internet or the statistics of home sales
from the multiple listing service. I read and store as much as I can
about the real estate business while also paying great attention
to the political arena. Politics plays an increasingly larger role in
the real estate arena with each year and can no longer be a
topic that’s ignored by any businessman. I fi nd a huge number of
decisions that I make or don’t make for that matter are because
of my feelings toward the current politicians running this coun-
try. I think they have a great deal of involvement in causing this
economic downturn and more importantly too much to do with
keeping us here. If they would just get the hell out of the way and
let the free market capitalism take over and let entrepreneurs do
what they do best, we would already be out of this recession by
now. I have a T-shirt that says a recession is when your neighbor
loses his job and a depression is when you lose your job while
the recovery will begin when Obama loses his job. I truly believe
that a far left socialist like Obama is the worst thing that could
have ever happened to this country in this economic downturn.
His ass backward policies are the opposite of what this country
needs to get out of this recession.
Every decision that I make about real estate is based on timing
the market. In a flat market like we have now, I’m always looking
for commercial deals with cash flow, hoping to find one that’s an
amazing deal and the owner is selling only because the rest of
his portfolio is not performing properly, but the piece I am interested
in is performing quite well. I know from my own experience
that most real estate portfolios consist of some well-performing
properties with some very bad ones. So I’m looking for a guy
who has a $2 million building that makes a boatload of money
while the construction of forty homes that he did totally tanked.
The only way he can keep from going bankrupt is to sell the profitable
$2 million building to buy his way out of the construction
mess of the forty homes. I’ve been out looking for this kind of person
for several years now, and I believe he’s out there although I
haven’t found him yet.
From a residential side in a flat market, I simply don’t believe in
acquiring buy-and-hold properties, so I do flips to earn income.
Although occasionally I will do a house that I purchased so much
under current market values that I decide to keep it. After all, I
consider myself a buy-and-hold investor, and I consider that to
be the best overall strategy for anybody regardless of how much
money you have or the size your portfolio.

In a declining market my advice is to sell any property that you
have an equity position in and the cash flows are mediocre to
poor. If your cash flows are good I still might sell the properties, but
they’re a little harder to decide. If I can get ten years of cash flow
from the sale of a building, then I have no issues selling it. I would
not call it a rule but more of a guide line when selling. One of the
beautiful things about the real estate market when it comes to
timing is that over the years you learn things move rather slowly in
the real estate cycles. While the professional investors and some
of the professional realtors will know prices have begun to shift,
the general public won’t know for quite some time. As a general
rule the uneducated are not really paying attention, and the
public usually takes a year to catch up with the professionals. It
has always been my opinion that the top peak of the real estate
market was reached on Labor Day in the summer of 2005, but
some people were still buying properties like the market was still
red hot for almost a year after that. Some people laugh when I
tell them that the peak happened on Labor Day, but there is a
lot of logic behind why Labor Day tends to be a key moment in
real estate cycles.
Summertime is always slow in the real estate market, and people
generally take a lot of vacations. So when prices drop and
houses sit over the summer, it’s really nothing more than commonplace.
Even the professionals will say wait and see what
happens when we return in the fall, but shortly after arriving
back in their home offices, they quickly determine that this market
won’t be coming back anytime soon. So does the peak
really happen on Labor Day or isn’t it just fun to be able to
pinpoint it right down to a particular weekend? I suppose the
answer to that question is a little bit of both.
In the fall of 1990, there were clear signs that the real estate market
was about to tumble, which was then followed up by the
Persian Gulf War in the early 1991. I didn’t know it at the time, but
clearly looking back, it’s safe to say the problems started after
Labor Day in the summer of 1990. I settled on my second property
in October of 1990, completely unaware of the real estate
cycles. I was just in a mode to acquire as much property as I
could as fast as possible.

“ ‘No tree grows to the sky’ is a great warning that
even the healthiest growth can’t go on forever.
Nor can it continue at the fast pace that marks a
sapling’s fi rst few years. You’ll hear people repeat
the mantra location, location, location is the number
one rule in real estate and for most of my career
I have to say I agree with them. I fi nd it equally
as important tounderstand the timing of the real
estate market and the strategy for which you
plan to invest along with choosing good-quality
locations to be all part of the grand master plan.”

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