Betting as We know can be done in the stock market, however we think those guys are losing currently.
All the Best
Dave & Lisa
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Phil's interpretation--can you have confidence in them (presumably holding their value)--is interesting, but I disagree. Yes, over the long term, real estate in general will go up. But as we've seen over the past few years, short term they can definitely lose value. And it's not just the past few years. Same thing happened in 1990-1991. And sometimes communities change, and property values drop.
Scott's interpretation--that you can bid on them--is absolutely correct. As is Lynn's.
I had a different take on your question: If you expect the value of a property to rise OR FALL, can you make an investment that will result in a profit? And the answer is yes--though I wouldn't use the word "bet" since that implies a gamble. You can certainly profit from a rise with no risk. And you can minimize your risks during price declines. Suppose you think a property will rise in value. You can buy it. With 20% down, you have 5-1 leverage. Example: A $100,000 house. You put $20,000 down. The house goes up in value by 10%--to $110,000. You've just made $10,000--or 50%--on your $20,000 "bet." You can improve your odds by going with FHA financing at 3.5% down. In our example, you'd put $3,500 down and receive a $10,000 payoff. That's a 286% return.
Boost your return even more. Don't buy the property. Just option it. Either a pure option or a lease-option. An option also limits your downside risk. If you bought the house with 20% down and it falls in value to $90,000, you've just lost $10,000. Option it, instead for--say--$2,000. Then your maximum exposure is $2,000.
Actually making money on declining values is more difficult. You can play around in Wall Street. There's a great book called The Big Short that explains how some of the big boys did it . . . and how many failed at it . . . and how that helped lead to the real estate collapse. See http://www.amazon.com/Big-Short-Inside-Doomsday-Machine/dp/0 Another way is to go for cash flow and forget the value of the property itself. I know investors who are perfectly happy to buy properties they never expect to go up in value. They don't even mind if values drop. The properties are cash flowing nicely, and will likely remain profitable regardless of what happens to real estate values.
Hope that helps.
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Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
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