“What do you think of me? An asshole? Don’t answer that… But seriously, my real estate investment properties are illiquid and their value has gone down. Are you still saying I should double down?” (Charlotte Real Estate Investor)

“Buy straw hats in winter…” (Russell Sage, Wall Street Financial)

Buying (and selling) at the right time is at the heart of many popular Wall Street mantras on how to get rich:

• Buy low, sell high
• Buy when you see blood on the streets
• Buy when everyone else is selling. And vice versa.

Sure, fool! Everybody knows that. That’s not the hard part; the hard part is knowing when that low time to buy is. If only we knew that, then this life would be so much easier. But is it really that difficult?

People who have made great riches in this country are like poker players. Poker is a game of waiting and then seizing the right opportunities when they present themselves. And when opportunities present themselves, good poker players bet big on them. It is not complete luck; they know that certain hands are more likely to win.

Let’s look at 2 examples of billionaires “playing poker”:

1. Michael Bloomberg (Billionaire and current Mayor of New York City): After 9/11, the stock market tanked as investor fears abounded. I remember seeing the cover of the New York Post in the fall of 2001, when Mike urged his constituents to buy stocks after the Dow dropped below 7,000; it certainly was! He basically said that people ask him for investment advice all the time (because he’s a billionaire) and that was the best advice he could give them.
2. Warren Buffet (needs no introduction): Buffett experts will tell you that if you took out Warren’s 20 biggest investment deals, your total earnings would be flat! He started his investment company in 1956; that’s a big problem every 3 years on average. That shows that he doesn’t have a supernatural ability to choose actions all the time; rather he made big bets (and he was right) on some big opportunities.

So how do you spot a great investment opportunity? Bloomberg will tell you that when the stock market is deeply discounted due to temporary events, you buy. The US stock market will bounce back, it always does. Buffett will tell you that if you see a good company’s stock trading at a deep discount, buy. Good companies work through tough times and reward shareholders.

Can you think of anything else that is heavily discounted due to temporary events? Yes, this is when we get to the topic of real estate. Good guess! The temporary events are the collapse of mortgages, banks not lending, and the rising unemployment rate. Lots of people need to sell and are ready to let go of great real estate at bargain prices.

As Will Rogers said: “Buy land, they won’t use it anymore.” So if the stock market is always going to come back, it makes sense for real estate to rally even more convincingly. Companies can always issue more shares, but big real estate can’t be replicated. And at these prices during the holidays, Wal-Mart has nothing on the Multiple Listing Service this year!

So are you encouraging your clients to buy investment real estate? Are you buying any yourself? Buffett waits years to be able to choose an opportunity like this. Do you really think that the housing market will continue to decline?