The investment game, Inflation and the cost of goods.

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To reply to the first set of questions on relitivity in real estate, one of the biggest problems is that people use the equity in thier estate to pay of debt and buy nice new 'shineys' (cars, boats, clothes/jewelery, vacations) instead of leveraging to purchase a new asset: IE, another house.

Here's what I did to make my first 1.5 million in Real Estate Holdings, and I'm starting the process all over again now that the market (housing) has plummeted...

Buy a condo, stick a tenant in it... wait 2-5 yrs (or until the market bounces up).

After a year, which is the normal time required on the west cost (cali/bc) to hold a property before flipping/leveraging, re-fi & buy a similar unit: In my case, i bought my second property (a house). You'll probably have to take a hit on insurance premiums because you want to over-extend (leverage) your debt ratio above the standard 70% (to 85 or 90%) in order to cover the down on the 2nd' property.

Once you have this set up, you're golden: Ride it to a top, sell the one, and just wait till the market retraces... It's not a fast strategy, but if you always rooted for the Turtle to beat the Hare, this strategy's for you.

The key, is finding the right investment tool that fits your needs: for me, it's +monthly cash flow (rent).

Another thing most people don't know about real estate is, like Option Trading (Stock Options), you can pay a premium for the RIGHT to buy a house on or before a specific date... in which case, if it's a bullish market or turning (like it is now & within the next 2 years), you can set out a couple housing options... as you near your point of exercising the option, you then post to sell the house (you own the right to it), in which you can then use the extreme leveraging of the option to rake in the difference between your premium, the ammount the house is (what the option price was), minus what you can sell it for.

Little to no work nor capital required... all paperwork.

So, yes its all relitive, but there are ways to use leveraging to get past the increase cost of buying/selling the same asset... just make sure those damn lawyers and insurance doods don't take all your profit!

~Rich Dad, Poor Dad. Great beginners series to investing, not specific focused, but conceptual. Good reads, all 3 of them.