The trend is our friend

The many problems associated with the real estate market, which I believe should continue for at least another 2 years, are major contributors to the decline of our economy. Another continuing economic depressant is the inflationary trend of energy–oil; world demand is 87 million barrels per day and supply is 85 million per day. The devaluation of our currency cannot logically provide us with a future of prosperity. Our artificially low interest rate, combined with the official, but contrived, rate of inflation (CPI), produces for the holder of cash, or equivalent paper, a negative return on his money. Also, I believe that the interest rates are preparing to go northward–possibly with a vengeance. Recent posts have definitely indicated that the MH business is becoming more challenging and that some operators have involuntarily lost their investments already. We bought 3 homes in late 2007, and another 6 this year. Like others, we experienced a substantial change: 1. fewer homes available,2. purchase and transportation costs increased by as much as one third, 3. renovation costs by as much as about 20%. If inflation, as it appears, is the current trend, then in order to prosper, we shall make it our friend. Shawn seems to have the logical response:“buy with both hands,” homes, that is. To which it seems reasonable to add:“use little of your own money, but that of banks and other lenders.” The trend should reward us handsomely by retiring our loans with moneys that may only have 50% of today’s purchasing power. It also seems to follow that we do not want to be lenders during the foreseeable future. Selling, for instance, on a lease-option makes us lenders–unless we market the note. (Our first 3 homes were sold on lease-option). The future of the MH business seems to be brighter than ever for us. But, we truly believe that we have to make the apparent trend our friend. What better time than July 4th to celebrate our opportunities for independence!