Getting Rich From Dry Powder (Cash On Hand)

    1987 Stock Market Crash

    In October of 1987, the stock market crashed – dropping 22% in a single day!

    Most of the world panicked, but the 93-year-old founder of the investment bank I was working at most definitely did not.

    I watched him walk up to the trading desk with a $1 million check ($2.5 million today) in hand to buy as much stock as he could.

    He of course made an absolute killing, and it was all because he had the cash on hand to take advantage of that opportunity.

    Investor Makes $200 Million Off Condo Collapse

    In 2016, my niece, who lived in Seoul, Korea and New York City her entire life, got transferred by her new employer to the backwater town of Fort Meyers, Florida.

    My poor niece was miserable, but I was delighted because Heejin and I got to help her find a place to live in what was “ground zero” of the biggest real estate collapse in history (Florida’s condo market after the 2008 meltdown).

    One of the units we looked at for my niece to rent was in a 304-unit development that an investor had picked up at the bottom of the market for $30,000 per unit.

    In 2016, each of those units was worth close to $500,000 and they are worth at least $750,000 today.

    So, the investor’s $9 millionish investment has now turned into well over $200 million in equity.

    $2 Million Apartment Complex Yields $2 Million Of Cash Flow

    I have an acquaintance who bought a $2 million apartment complex after the 2008 meltdown that was soon yielding $1 million of cash flow, and it is now yielding close to $2 million!

    Developer Buys Finished $200,000 Lots For $5,00 To $25,000

    I know a developer who never got greedy or over-extended in the pre-2008 housing fury, so he had tons of cash on hand after the meltdown.

    He used that cash to buy dozens of finished (fully developed) lots out of foreclosure that other developers had spent $200,000 (or more) per lot to finish.

    His costs ranged from $5,000 to $25,000, and a few years later, he was able to sell all of those lots for more than $200,000 each.

    Contractor Bought 27 Homes – All Are Free And Clear

    The contractor we used to fix up our Scottsdale home in 2021 owned 27 homes that were free and clear.

    He picked them all up after the 2008 crash, and his total rental income is now over $60,000 per month.

    His properties are worth over $14 million in total as well.

    Sidebar: I just love that he kept working at his craft (kitchen remodels) even though he hardly needed the money.

    Realtor Bought Her Retirement Nest Egg In 2011

    An agent we work with bought four homes in the Bay Area at the bottom of the market for around $100,000 each.

    They are now almost free and clear and yielding over $3,000 per month in rent per home – which is enough money for her to retire on.

    Commodity Investors Get Filthy Rich After Covid Hit

    When COVID hit and lockdowns were enforced, commodity prices plunged well over 50% in many cases.

    And shrewd investors the world over plunged into the market, buying commodity futures and indexes en masse.

    And all of them made a killing amazingly fast, as many commodities more than doubled in price in a few short years.

    What Do All Those Investors Have In Common?

    All of the investors above had enough cash on hand to make those investments.

    The real estate agent and the contractor did not have a lot of cash either – but they both lived very lean and they both had enough cash to help them finance their purchases.

    So – my point is that you don’t need to be a wealthy investor to take advantage of massive opportunities in a down market.

    You just need to make sure you have some dry powder – and be ready to take the plunge when opportunities arise.

    This is also a reminder that when everyone thinks we are in financial Armageddon, there are probably opportunities abounding.

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    Jay Voorhees
    Founder/Broker | JVM Lending
    (855) 855-4491 | DRE# 1197176, NMLS# 310167

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