Real estate is a cyclical market, and understanding the life cycles of buyers and sellers markets is crucial for making informed investment decisions. Currently, we are in a seller's market. This market has been in effect for several years, with average appreciation rates at around 5% per year. However, it's important to remember that this isn't the first time the market has been in favor of sellers. In 2008, we saw a shift to a buyer's market, which lasted for several years. The reasons for these shifts in market conditions are complex and multifaceted, but they are largely driven by supply and demand.

When it comes to supply, the housing market has seen a trend of increasing supply over the last 30 years, largely as a function of population growth. However, during the last economic downturn, new construction slowed and has yet to fully recover. This, combined with increased demand, has led to a supply crunch that has pushed prices higher.

As a buyer in a seller's market, it's important to be prepared for a competitive environment. Escalation clauses, multiple offers, waiving inspections, and even offering to bridge any gap in the appraisal can be necessary to secure a property. In some cases, buyers may even find themselves losing out to all-cash offers. Prices can escalate to 30-60% over the asking price, and it can be difficult for banks to appraise the properties at these high values.

For sellers, a buyer's market can be a bit more challenging. Days on market can increase, and negotiations may take place below the asking price. Inspections may also result in more concessions being made.

Warren Buffet's famous quote, "be fearful when others are greedy and greedy when others are fearful," is particularly relevant to real estate. It can be difficult for most people to take advantage of a market downturn, especially when there is "blood in the streets." One way to overcome this challenge is by working with someone who has a proven track record of being confident enough to work in such an environment. A mentor can provide guidance and positive encouragement to take massive action. Baron Rothschild also said something similar, "The best time to buy is when there is blood in the streets." This quote highlights the importance of being contrarian and going against the crowd.

It's important to remember that while the current market may seem bleak, it's the perfect opportunity to buy. The continued supply crunch, reduced amount of new construction, and ever present high inflation will start to send housing prices on an upward trajectory again in around 2 years. This slight downturn in the commercial market is the correct time to buy.

Working with an experienced advisor can provide not only passive cash flow but also huge windfall profits and extraordinary tax benefits that come with investing in a syndication that buys large multifamily housing and industrial real property. In a buyers' market, it's important to negotiate below asking price and be prepared for inspections that result in more concessions. In a sellers' market, escalation clauses, multiple offers, waiving inspections, and being prepared to bridge any gap in the appraisal are key.

In short, by taking advantage of market downturns and working with experienced professionals, investors can reap significant financial rewards. It's important to remember that timing is everything in real estate investing, and to quote Warren Buffet, "be fearful when others are greedy and greedy when others are fearful." Don't let inflation eat away at your hard-earned savings, reach out to an experienced advisor and learn about the many benefits of investing in real estate, particularly during market downturns.