Reasons Why The Housing Bubble Was the Greatest Thing That Happened to Me

I began investing in real estate when I was a 22-year old college student, right in the middle of the largest housing bubble the United States has ever had. When it collapsed, I was forced to take a hard look at the way I was investing and make some painful changes.



Since then, I have realized that this experience was the best thing to ever happen to me, for the following reasons:



* I will not get lazy about using my credit again. In the beginning, I had to borrow from private lenders because I couldn't qualify for a traditional loan. Later, when I was able to, I got lazy about finding new private individuals to borrow from and relies on mortgage companies, and we all know how that went over when the market changed.



* I have determined never to get lazy about financing again. There were a few deals where I broke my own rules and got conventional mortgages using big down payments, rather than finding private lenders to finance deals for me. Then, when the lending rules changed, I was no longer able to borrow from them and had to start from scratch.



* I now focus on long term. At the time, all of my private lenders wanted their money back in six months and I never bothered to find new people with different terms. After all, houses were selling and I wanted to make my profit right away, not years later. Then, when that was no longer an option, I started focusing on making more in the long run, which is my strategy of choice to this day.



* Learning to invest during a housing bubble was a less punishable learning environment. I made a lot of mistakes that could have cost me big, had values not been going up and houses were easy to sell.



* I have learned to negotiate better. In the past, I just didn't have to guts to offer someone less than half of their house's value. Nowadays, I do it all the time and, as you'd imagine, a percentage of sellers say yes! If I had been more gutsy in the last few years, I might have made a lot more money (because you can always start low and offer more later).



For these reasons, the housing bubble was the best thing to happen to me-in the long run. The short run was painful, scary, and made me work harder than I would have liked to clean up the mess I made. But it was a learning experience that I will never forget, and that has made me a more well-rounded and capable investor than I would have been otherwise.