Real Estate Investing

Estate Agent, Justin Paperny Offers Insight
On Real Estate Investing

Calabasas, CA (April 10, 2007), There is no doubt that owning real estate presents a wonderful opportunity to make money and generate positive cash flow. With that said, Justin Paperny, Estate Agent at Ewing and Associates Sotheby’s International Realty believes the biggest problem is that many investors claim to be “long term investors”, but take a “short term approach”.

As an Estate Agent, Justin Paperny is often called upon by family, friends and longtime clients to guide them in making wise decisions regarding the real estate they choose to buy and sell.

Justin Paperny’s philosophy is that any investment is going to encounter its share of ups and down during the span of its life. Going in, an investor really needs to determine how long they are prepared to wait and stay the course. This is especially true in real estate where its illiquidity can make it very difficult to free up cash. Justin Paperny emphasizes to each of his clients that homeowners and investors must understand that real estate is unlike the stock market where you can sell quickly and get your proceeds almost as quickly. It is not wise to take the approach that if one needs cash they can simply refinance because the property will have already appreciated. Anything can and does happen when you are dealing with a short time frame. It is naïve to believe that a property may be higher and that you will be able to free up cash or sell. Therefore, to invest in real estate, one should be prepared to stay the course and maintain a long term view of at least ten years or more.

Justin Paperny also believes long term investing resolves additional issues. First, by investing capital that you are prepared to go without for sometime, investors do not over invest and become “cash poor”. Only invest what you are prepared to go without for the foreseeable future and assume it will take quite sometime for your property to rise in value. Managing your expectations is very important. Second, and as important, by preparing one’s self to be patient, investors will not be unprepared or shocked if after one or two years, their home or investment property is worth less than what they paid. Stay the course and remind yourself that you are in for the long run.

History has shown that patience pays off, and that real estate ultimately moves higher. With that said, it can often take time and many people have lost their home or investment because they did not have the patience or resources to wait it out. They may have thought their investment would be long term going in, but did not take into account other factors. Justin Paperny points out that as we all know, “life happens”. Death, divorce, medical issues, etc... These things can cause people to need money quickly. If they have used up their equity or have none to get, they may be forced to sell or face becoming foreclosed on.

Only purchase real estate if you are prepared to stay the course and roll with the ups and downs. Do not over extend yourself unless you are prepared to wait. There is too much at risk. Unfortunately in Los Angeles, people are starting to see the signs of homeowners being forced to sell or risk being foreclosed upon. Their initial goal going in was to live there long term, but did not take the time to understand what would happen when their three year interest only loan expired. It was inconceivable to think that their home would be worth less. No investment goes straight up and anything short of ten plus years is not worth the risk.

As an Estate Agent, Justin Paperny advises clients on whether or not they should be investing in real estate. Although real estate presents a wonderful opportunity to make money and generate positive cash flow, he knows that it is not the right investment for everyone. Despite his own self interest, Justin’s advice for many people is to keep their money in the bond or money market if they are not prepared to let the normal investment cycle of real estate pay off.

Justin Paperny can be reached at www.justinpaperny.com or 818-657-4430.

# # # #