Guy With The Most Toys In The Sandbox Says To Buy Real Estate

by John Glynn on February 3, 2011

John Paulson, who recently gained notoriety for making a mint betting against real estate before the bubble burst, has come out with a not-so-vague recommendation on real estate: Buy.

“If you don’t own a home, buy one. If you own one home, buy another one, and if you own two homes, buy at third and lend your relatives the money to buy a home.”

Wow. That’s fairly aggressive. I have no doubt that at some point in the not so distant future, many of us will look back on this environment and wish we bought more, bought bigger, bought a vacation or investment home, etc. Many today are parallyzed by fear, and others are restricted by tight access to OPM (other people’s money, aka financing). Or, in the case of many, they simply don’t have the resource after being roughed up by that recession that is supposedly over with.

But, I have to wonder, is Paulson the most credible real estate market guy around? Should we be listening? Or, was he lucky before, and now feeling pressure to announce it before the real estate recovery happens?

When it comes to investing, being early is the same as being wrong. So this type of statement kind of freaks me out a little.

That said, if you’re hovering over the market, waiting for it to look better, what happens if you miss the turnaround? What does it cost to wait a better condition, especially if it never materializes? The affordability index is near it’s peak. Rates are still extremely low, prices at/near their bottom.  Hesitating can be really frustrating…

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