Rich strategy = Do the opposite of the poor Majority

The rich are the minority which means the mainstream media a guiding the majority. Their is a simple rule to follow to be rich. Do the opposite of what the majority is doing smartly.
You can use this simple trick, when your hairdresser think of buying a condo, sell your condo.
Since the beginning of 2005, the late majority of Canadian are jumping into the house market when the rich where starting to move out. Now, the majority is starting to freak because they start realizing the market was overpriced which means it will soon be the right timing to buy, not sell.

the main indicator the bubble will burst is:

• Slow down of sale speed (seller obstinacy)
• Increase bank down payment

You might say: increase bank down payment??? Yes.
As an example, in Canada, the down payment is 20% for a second building.
Most of the banks now ask 25-30% down payment. The math is simple, even if you pay the market price the bank takes no risk. If the bank ask more then 20%, it means you are paying more then the real value which means you have to put more down payment to reduce the bank risk.

Example:
- Triplex = 500K
- standard down payment = 20% (100k)
- Bank evaluation = 400K
- Risk = 100K no warranty
- Bank new down payment = 100K + 25%*100K  = 125K (25% of 500K)

Why it is over valued: simple economics. Value is drive by increase of population & salary.
Quebec province has the worst number is both.

What is another big difference between the rich an poor:



Poor are optimizing capital gain first. Rich are optimizing cash-flow. If your real-estate investment is base only on capital gain, yes you are fucked and you think like a poor. Smart rich people are optimizing cashflow then capital gain.
For patient people, they will be lot of opportunity ahead, why?

• Most real-estate investor will start selling
• Buyer majority will stay out of real-estate (decrease demand)
• Majority will go back to stocks (think it is less risky; decrease demand further)
• Seller will run out of money ;) due to bad economic condition
• Canadian dollar is going down....natural resource value is going doing (US oil dependency is down  & Why Iran Nuclear threat is no more an issue?

Its the same as the idea to buy when everyone is selling and sell when everyone buys ;)