real estate and sailboats

have you ever been on a sailboat? have you ever invested in real estate? they’re similar.

at this time we have much uncertainty in the markets. nobody knows which way is which. this leads to indecision and fear. our human psyche prefers a solid direction and momentum, leading to a confident course of action.

on a sailboat there are doldrums and periods without wind. sails flap in the breeze without direction so there’s no action, no movement. some use the term ‘luffing’ during these periods.

the alternative in either real estate or sailing is to use power. this is like negative cash flow or diesel fuel. so until the wind or market picks up, neither the sailboat nor real estate will move much without power.

yet over the long term we know better. new, safe investments in real estate are those that break even today. the only exception to negative cash flow is paying principal down. maybe you buy from someone who has run out of power. which course do you go when the wind returns?