FM JWBK177/Ross April17,2008 9:27 CharCount= FORECASTING FOR REAL ESTATE WEALTH Strategies for Outperforming Any Housing Market E D R O S S John Wiley & Sons, Inc. FM JWBK177/Ross April17,2008 9:27 CharCount= FM JWBK177/Ross April17,2008 9:27 CharCount= FORECASTING FOR REAL ESTATE WEALTH FM JWBK177/Ross April17,2008 9:27 CharCount= FM JWBK177/Ross April17,2008 9:27 CharCount= FORECASTING FOR REAL ESTATE WEALTH Strategies for Outperforming Any Housing Market E D R O S S John Wiley & Sons, Inc. FM JWBK177/Ross April17,2008 9:27 CharCount= Thisbookisprintedonacid-freepaper.(cid:2)∞ Copyright(cid:2)C 2008byMonarchGroupLLC.Allrightsreserved. PublishedbyJohnWiley&Sons,Inc.,Hoboken,NewJersey. PublishedsimultaneouslyinCanada. Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmittedinanyform orbyanymeans,electronic,mechanical,photocopying,recording,scanning,orotherwise,exceptas permittedunderSection107or108ofthe1976UnitedStatesCopyrightAct,withouteithertheprior writtenpermissionofthePublisher,orauthorizationthroughpaymentoftheappropriateper-copyfee totheCopyrightClearanceCenter,Inc.,222RosewoodDrive,Danvers,MA01923,(978)750-8400, fax(978)646-8600,oronthewebatwww.copyright.com.RequeststothePublisherforpermission shouldbeaddressedtothePermissionsDepartment,JohnWiley&Sons,Inc.,111RiverStreet, Hoboken,NJ07030,(201)748-6011,fax(201)748-6008,oronlineathttp://www.wiley.com/go /permissions. LimitofLiability/DisclaimerofWarranty:Whilethepublisherandauthorhaveusedtheirbesteffortsin preparingthisbook,theymakenorepresentationsorwarrantieswithrespecttotheaccuracyor completenessofthecontentsofthisbookandspecificallydisclaimanyimpliedwarrantiesof merchantabilityorfitnessforaparticularpurpose.Nowarrantymaybecreatedorextendedbysales representativesorwrittensalesmaterials.Theadviceandstrategiescontainedhereinmaynotbe suitableforyoursituation.Youshouldconsultwithaprofessionalwhereappropriate.Neitherthe publishernorauthorshallbeliableforanylossofprofitoranyothercommercialdamages,including butnotlimitedtospecial,incidental,consequential,orotherdamages. Forgeneralinformationonourotherproductsandservicesorfortechnicalsupport,pleasecontactour CustomerCareDepartmentwithintheUnitedStatesat(800)762-2974,outsidetheUnitedStatesat (317)572-3993orfax(317)572-4002. Wileyalsopublishesitsbooksinavarietyofelectronicformats.Somecontentthatappearsinprintmay notbeavailableinelectronicbooks.FormoreinformationaboutWileyproducts,visitourwebsiteat www.wiley.com. LibraryofCongressCataloging-in-PublicationData: Ross,Ed,1961– Forecastingforrealestatewealth:strategiesforoutperformingany housingmarket/EdRoss. p. cm. Includesindex. ISBN978-0-470-27536-8(pbk.) 1.Realestateinvestment—UnitedStates. 2.Realestatebusiness—UnitedStates—Forecasting. I.Title. HD255.R67 2008 332.63(cid:3)240973–dc22 2007052399 PrintedintheUnitedStatesofAmerica. 10 9 8 7 6 5 4 3 2 1 FM JWBK177/Ross April17,2008 9:27 CharCount= To all real estate entrepreneurs who dare to join the nation’s largest group of self-made millionaires and to all homeowners who choose to take charge of the wealth accumulation derived from homeownership. FM JWBK177/Ross April17,2008 9:27 CharCount= FM JWBK177/Ross April17,2008 9:27 CharCount= C O N T E N T S PREFACE xi P A R T O N E FOUR BIGGEST QUESTIONS CHAPTER1 WhatShouldIKnowaboutMarketCycles? 3 HowMillionairesMakeTheirFortunesfromForecast Appreciation,4 MakeMoneyfromaSlowdown,5 WhyUsingaForecastIsaGoodIdea,8 WhyNotUsingaForecastIsaBadIdea,9 IntegratingaForecastintoaRealEstateStrategy,10 CHAPTER2 WhatShouldIDoovertheNextFiveYears? 15 WhentoBuy,Sell,orHold,15 SeasonalForecastingStrategy,20 SellingatthePeakandBuyingattheLow,26 WhatIstheBestStrategyforInvestingToday?28 WhichInvestmentStrategyIsEasiestandMostLucrative?29 ShouldIWaitaYearorTwobeforeInvestingintheMarket?29 CHAPTER3 HowDoILookUpMyForecastforProperty AppreciationinaSpecificNeighborhood? 33 CapitalizeonaSlowRealEstateCycle,34 UseForecaststoBeCompetitiveinPropertyInvesting,35 PrimaryForecastVariablesandResultingValues,36 CalculatetheNextSevenYears,40 CHAPTER4 HowCanIIdentifythePropertyThatWillMakeMe theMostMoney? 47 HomeownershipversusRenting,48 EarnBackaDownPaymentQuickly,52 vii
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