Let’s say you’re playing baseball and pitching against the other team’s best hitter. For your first pitch, you throw a fastball right down the middle and the batter swings and misses. You might be thinking that the batter can’t hit your fastball, so for your second pitch, you throw the same fastball right down the middle and the batter swings and misses again.

Now you’re starting to think you can do nothing wrong, so for your third pitch, you throw the same fastball right down the middle – and the batter knocks it out of the ballpark for a home run.

What did you do wrong? You kept applying the same strategy even though outside circumstances were changing. The first and second time you threw a fastball, you might have surprised the batter. But the third time you threw the same fastball, the batter was ready and waiting. When outside circumstances change, make sure your strategy changes too.

A common definition of insanity is doing the same thing over and over and expecting a different result. I’d like to modify that and say that doing the same thing over and over and expecting the same result even under different circumstances is also a form of insanity. That’s why I urge you to think outside the box. Don’t just look at what everyone else is doing. Look at the same situation from different points of view.

When the real estate market falls, most people are ready to think like Chicken Little and proclaim that the sky is falling. That’s not the time to flee the real estate market. That’s the time to switch gears and adopt a different strategy. And that is exactly what I do.

Instead of looking for properties to buy, fix, and quickly sell (flip) for a profit, I look for foreclosures and distressed properties that I can buy for a major discount, rent to pay expenses, and sell when the market goes back up. For example, a few weeks before I wrote this, I purchased a two-family home in foreclosure for less than $60,000. I immediately refinanced the property for $192,000 and walked away with a check for well over $100,000 after all expenses were paid, and I still owned the property! Now I can rent this property to cover the mortgage and when the home market takes off again (and it will eventually), I’ll be able to sell it for a profit or hold it through the next up cycle.

Could I buy a house during a hot real estate market and rent it out? Of course! But if you don’t sell the property at a profit during a hot market, the market will change and you’ll miss out on your opportunity to walk away with a good chunk of cash. Notice that as long as you understand the up and down cycles of real estate, you can’t lose; you just might not walk away with the maximum amount of profit.

That’s what makes the secret of my book so simple. First, you have to understand what real estate market or cycle you are in. Then you have to apply the proper strategy to make money in that cycle. In this way, you can minimize your risk and maximize your profits.

Author's Bio: 

Dean started his real estate investing career at the early age of 18, when he purchased a run-down apartment building and renovated it into a profitable piece of property. From that beginning, Dean grew his real estate properties to be worth millions of dollars. Dean is still an active investor and author of two Books - Think a Little Differently and Be A Real Estate Millionaire: Secret Strategies for Lifetime Wealth Today. He is passionate about telling people the straight truth about how to properly invest and profit from real estate, and tells them in a way that makes it simple enough for anyone to follow.

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