Mon, 27 February 2023
Why can’t you do it all yourself? That is, identify, acquire, manage a rehab, place a qualified tenant, and manage a rental property long-term. We talk with the Founder and Investment Coordinator of who may be the oldest turnkey provider in America today, Mid South Home Buyers. They make ugly houses pretty. They only acquire houses that the Founder would be proud to own himself. Mid South Home Buyers’ Terry Kerr and Liz Brody have repeat GRE buyers for their 2nd, 5th, and 9th investment houses in Memphis and Little Rock. They’re passionate about how they’re not snatching away homes from prospective first-time home buyers. They transform and improve neighborhoods. 4 years is the average tenant duration here. MSHB’s rehabs are extensive: new roof, new HVAC, updated electrical and plumbing, all-new flooring and new cabinetry. With national supply chain issues and inflation, they’ve doubled their inventory of supplies. Memphis International Airport is an astounding distribution hub for the types of jobs that make great long-term tenants. It’s often the highest volume cargo airport in the world. They also offer new-build properties in Little Rock. What about prices and rents? Memphis Rehab SFRs: Rent $780-$1,400 | Price $95K-$160K Memphis Rehab Duplexes: Price $180K-$220K Little Rock Rehab SFRs: Rent $850-$1,500 | Price $110K-$170K Little Rock New SFRs: Rent $1,300-$1,400 | Price $190K 80% of their buyers finance. 20% pay all-cash. They’re so proud of what they do that they offer monthly bus tours. Learn more. Get started at: GREmarketplace.com/Memphis Our GRE Instagram Poll results show that 65% of you have your tenants pay you through the legacy banking system. I reveal all the results on today’s show. Resources mentioned: Show Notes: Memphis & Little Rock property that cash flows from Day One: Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE or e-mail: info@RidgeLendingGroup.com Find cash-flowing Jacksonville property at: Will you leave a review for the show? I’d be grateful if you search “how to leave an Apple Podcasts review” and help me this way. Top Properties & Providers: Best Financial Education: Get our wealth-building newsletter free—text ‘GRE’ to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: Keith’s personal Instagram: |
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Mon, 20 February 2023
New York City real estate has distinctions and quirks that you’ll find almost nowhere else in the world. Is it unreal estate? This includes: super skyscrapers, air rights, apartments with doormen, co-ops, pencil buildings, and rent control. Can you actually make money in NYC real estate? Incredibly, the national or world capital of all these are in NYC: banking, finance, communication, advertising, law, accountancy, fashion, arts, architecture, media, and more. 1 in 18 Americans live in the NYC metro area. The population is growing. Guest Beth Clifford joins us. She has an impressive set of experiences, including on Wall Street, with startups, and as an international real estate developer. Beth is a former NYC resident. Beth describes: how “air rights” are really development rights, pencil buildings, which apartments have doormen, and more. There’s a short-term rental arbitrage strategy in NYC where you could make money. But is it legal? Join Thursday, Feb. 23rd’s GRE Live Event for Philadelphia, Pittsburgh and Baltimore properties. Ask me questions live. It’s free. Register now at: GREwebinars.com. Resources mentioned: Show Notes: Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE or e-mail: info@RidgeLendingGroup.com Memphis property that cash flows from Day 1: Find cash-flowing Jacksonville property at: Book recommendation: Find NYC apartments: I’d be grateful if you search “how to leave an Apple Podcasts review” and do this for the show. Top Properties & Providers: Best Financial Education: Get our wealth-building newsletter free—text ‘GRE’ to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: Keith’s personal Instagram:
Welcome to GRE! I’m your host, Keith Weinhold. New York City real estate is just absurd. It’s also really interesting and has distinctions and quirks that you’ll find almost nowhere else in the world.
We’re talking about air rights, skyscrapers, apartments with doormen, co-ops, rent control, and how do you actually make money in NYC real estate? Today, on Get Rich Education.
Welcome to GRE! From Jamaica, Queens to Lower Manhattan. Across New York City and 188 world nations, this is Get Rich Education. I’m your host, Keith Weinhold.
As we’re talking about NYC real estate today, I think it can be regarded as exotic and Manhattan is the CENTER of American urban excitement from Times Square to the Statue of Liberty to the address “One World Trade Center” and more.
It wasn’t always this way.
As the story goes, in 1626 - about 400 years ago - Indigenous inhabitants sold off the entire island of Manhattan to the Dutch for a tiny sum: just $24 worth of beads and "trinkets."
At that time, it wasn’t known as New York. It was called “New Amsterdam”.
Today, NYC is the national or the WORLD capital of: banking, finance, communication, advertising, law, accountancy, fashion, arts, architecture, media, and more.
How could so much be in one place? Well, all this attracts a lot of people.
In fact, the NYC metro area population last year was almost 19 million, that’s up just about one-quarter of 1% from the previous year. So COVID hasn’t killed it.
This means that more than 1 in 18 Americans live in the NYC Metro.
Now, of the 5 boroughs, we’re really focusing on Manhattan today, since that’s where space is at a premium, hence that’s why the tall skyscrapers are there.
In fact, I have counted 17 skyscrapers that are all more than 1,000 feet tall - that’s almost one-fifth of a mile tall.
Now, Manhattan is crammed with such high density - and it isn’t just commercial space. Of course, residents live on Manhattan too.
But it is so crammed for space in Manhattan - and even in places of the four outlying boroughs, that it can kind of obscure your vision such that you don’t have the - I guess - wherewithal that you would elsewhere.
Here’s what I mean. Just last month I met a guy that has lived all of his life in NYC - part of his life in Brooklyn and part of his life in the Bronx.
He did not realize that when he lived in Brooklyn, he was living on an island. I don’t know how long he lived in Brooklyn, but I found a gentle way to tell him, without making him feel unintelligent - that yes, Brooklyn and Queens are both on LI.
That’s why you have all those bridges in NYC, like Brooklyn Bridge. They connect the islands.
Now, when it comes to rental property there, New York State has had the longest history of rent control in the United States, since 1943. The majority of those units are in NYC.
I have never seen one piece of evidence that rent control works long-term. If you have, please share that resource with us at GetRichEducation.com/Contact
When you put a ceiling on the amount of rent that can be charged like this, what tends to happen is that landlords have zero incentive to improve the property when they can’t charge more rent… or else soon, LLs would be losing money.
In many cases, soon properties and entire areas can become dilapidated because they haven’t been improved, and in bad cases, tenants don’t want to move out. They’d like to keep the cheap rent even if they need to tolerate increasingly squalid conditions in these neglected properties.
A classic economics book really outlines the rent control problem wonderfully. Though the author isn’t that well-known, Henry Hazlitt’s “Economics in One Lesson” really breaks down the problems with rent control terrifically.
That entire book basically outlines how programs like rent control only benefit a small group of people for a short period of time… like, oh, let’s give these people a break & be nice so that they can afford to pay the rent.
At the same time, you’re NOT playing nice to the property owner. And how benefits to a small group of people in the short-term harms everybody long-term. Many will tell you that’s the case with… rent control.
Shortly, I’ll talk with an experienced developer, knowledgable about NYC development, she also used to live in NYC.
Wait until you discover some of the complexities of getting things build there. I expect her to share that.
She’ll tell us about things that you would never think of, like how… whether or not there are windows on the side of the a building indicates whether or not there’s a development opportunity there.
I’ll have her describe what “Air rights” are. Property “air rights” are not what you think they are. You’ll need to listen closely to that part as I expect explaining “air rights” involves somet math.
You’ll learn about what “skinny skyscrapers” are and why they don’t they build those wider.
NYC has coops - cooperatives. They’re different from a condo. In a co-op, you buy shares in a corporation that gives you certain occupancy rights.
So rather than having fee simple title, you’re the shareholder of a corporation rather than having a title like you do with condos.
And you’ve got to give the co-op board your income & taxes… because the corp wants to be sure you’ll be able to pay. And if the co-op board doesn’t like you dog or like you for whatever other reason, maybe they won’t let you join.
If you’re perusing apartments to rent in NYC - esp. Manhattan - some have a doorman and some don’t have a doorman. Why might it be desirable to have a doorman, when that’s not even offering in a place like, say Minneapolis or Houston?
I’ll ask our guest, “Is there any way you can make some real estate cash flow here.”
So, I’m often the one doing the teaching here on the show. But in just a few minutes, I expect to get some learning myself as we discuss the unique and unusual nuances of NYC real estate.
First, how long have you been listening to the GRE Podcast?
Well, that was a recent question in our Instagram Poll.
Now, the sample size wasn’t that huge and the our average Instagram follower might be a more avid podcast fan that the average.
But with the question asked, “How long have you been listening to the GRE Podcast?” The results were:
Under 1 Year = 11% of respondents have been listening for that length of time. 1-3 Years = 32% of you 3+ Years = 43% of you have been listening for that length of time. And EVERY SINGLE episode since 2014, yes, that is all 437 episodes. That comprises 14% of you.
So that’s about 1 in 7 listeners - at least in this poll - have listened to every single show. I’m really grateful for that. To shout out a sampling of those that have listened to every episode, that includes Kirby, Jacob, and Stacio.
I’m deeply grateful for that. I still of new people that find the show here today & then want to go back and listen to every single episode.
That is humbling indeed.
NYC Real Estate is absurd. That’s next. I’m Keith Weinhold. This is Get Rich Education. ______________
Yeah, great stuff from Beth there… and hey, a good investment to the global elite might be different than what you perceive as a good investment.
If you’ve got $250M to place and you don’t need the cash flow, you just want RE for the proven inflation hedge that it is, then drop it all into a Manhattan skinny skyscraper and leave it vacant. Some people can afford to do that. It was good to learn that the term “air rights” is misleading. It’s really about “development rights”. That’s probably a better way to remember it. Now, when it comes to real estate in the northeast, Boston, NYC, and Washington DC real estate and their outlying areas really aren’t known as what we’d call “cash flow” markets. But three other cities in the region are - Philadelphia, Pittsburgh, and Baltimore. Our Mid-Atlantic provider even sees properties where the price is around 100 months' rent. Yes, the property price is just 100X the monthly rent amount. That is impressive. That means that with just a 20% down payment, you can expect your monthly rent income to often exceed all the monthly expenses, even your mortgage payment. Well, I’m going to discuss this at a live event on Thursday night, just 3 days from now. That is Thursday, February 23rd at 9 PM Eastern, 5 PM Pacific. Yes, this live event is your opportunity to ask us questions live, and that it will be the first time ever that our in-house Investment Coach, Naresh, & I are both there, together, to help you, along with the provider in these mid-Atlantic markets. Again, it will be in just three days, Thursday, February 23rd at 9:00 PM Eastern. It is completely free. Sign up now at GREwebinars.com
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Mon, 13 February 2023
I get political today. But first, I discuss jobs. How far will home prices fall? Innovation creates jobs. It does not destroy jobs. American innovation is one reason that we added over a half million new jobs just last month. All this new job growth and a robust GDP reading will keep us out of a recession for the next few months, maybe much longer. Both the US median home price (Case-Shiller) and inflation peaked last June. The US median home price fell 2.5% from its peak. Where are they falling? Where are the rising? We explore experts’ outlook for home prices. Five expert opinions all range from 2023 home prices rising 5% to falling 4%. Volatile, coastal markets are correcting down a little. Many stable markets in the Midwest and South are stable or rising a little. Beware of those that say, “It’s never been a better time to buy real estate.” That’s wrong. 2012 was better. 2021 was the worst time to buy real estate recently. Even these past few years, and today, it’s hard to find a better place to put your investment dollar than carefully-bought income property. This won’t last long. At GREmarketplace.com now, providers are often giving buyers 2% of the purchase price as cash at the closing table and free Property Management for two years. Resources mentioned: Show Notes: Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE or e-mail: info@RidgeLendingGroup.com Memphis property that cash flows from Day 1: Find cash-flowing Jacksonville property at: I’d be grateful if you search “how to leave an Apple Podcasts review” and do this for the show. Top Properties & Providers: Best Financial Education: Get our wealth-building newsletter free—text ‘GRE’ to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: Keith’s personal Instagram:
Welcome to GRE! From ANNapolis, MD to Santa ANA, CA and across 188 nations worldwide. I’m Keith Weinhold, Forbes REC member and founder of this very platform here… and this is Episode 436 of the Get Rich Education audio podcast.
If you’d like to watch me on video, check out the Get Rich Education YouTube Channel.
But our audio show, right here, is our most popular platform.
Is the world trying to tell me that my voice is better than my face, then? That’s what I’m starting to think. Ha!
ARE American home prices are falling. How bad is it? When did it start? And when will it stop? I’m going to answer all of that in just a bit.
Last week, I mentioned that a strong GDP report has told so many permabears and gloomer-and-doomers that they were wrong about being in a recession by now.
And gosh… the latest Jobs Report came in after that and it just added insult to injury for all these permabears - meaning those that are permanently bearish - permanently making dire predictions about the economy & housing.
And, even if you’re listening to this show years from now, this is how you know that a recession is NOT at all imminent.
The whopping 517,000 new jobs added last month nearly tripled expectations.
Still... I wonder if constant rumors about a coming recession will drag on longer than the fake meat fad.
These recession rumors keep getting stirred up.
Now, when it comes to jobs. You care about that a lot as a REI. You need your tenant to have a job in order to pay you the rent.
The number of American jobs saw their recent low in 2020. In fact, they fell into a deep trough - a BIG dip back then.
That was the pandemic shutdown. People had to stay home. The government paid workers to stay home. Maybe you were paid to say home then - about three years ago.
Well, that means that a lot of goods weren't being produced in 2020. Many services weren’t being produced either.
Well, when MORE stimulus-fueled dollars began chasing FEWER goods, that's exactly what began stoking the inflation fire for the next few years, right up to & including now.
That’s where the monetary inflation came from.
That’s why I’ve regularly been paying $8 for a bottle of good quality salad dressing.
Aren’t you doing some of these things?
Yeah! Hey, what’s wrong with you? In today’s polite society, you aren’t adding a 25% tip for your $6 bottle water?
No, I hope you’re not. I’m not doing THAT yet. Ha!
Well, that was when jobs cratered, in 2020. By today, with all of these American jobs roaring back, total jobs are now 2.7 million above pre-pandemic levels. There's now just a 3.4% unemployment rate.
That is just really hard for the doom-and-gloomers to deal with.
That’s the GOOD news.
Though more jobs are good news, it's not all good.
The bad news here is that strong employment means more inflationary pressure.
To that point, Jerome Powell recently said that Americans should expect a couple more interest rate hikes to keep combating inflation.
Not everything is all good in the good ol’ USA. I mentioned some of the economy’s other problems last week.
But what's the reason for all this job creation? Why is this happening in America?
In a word, it is American innovation.
Innovation creates jobs.
Now, there might have been one point in your life when you thought that innovation DESTROYS jobs - like, for example, with the fact that today’s bank tellers and grocery store cashiers are disappearing.
Innovation does not destroy jobs. Innovation creates jobs. We’ll like at why shortly.
But first, the Global Innovation Index was released and it shows that America is the 2nd-most innovative nation in the entire world.
Yep, of 193 UN-recognized world nations, the US is only second to Switzerland.
People have falsely believed that innovation destroys jobs since before the tractor replaced horses and mules.
Yep, last century, one new tractor replaced five horses or five mules and that meant that it soon took fewer farmers to feed the animals, because fewer animals were needed.
For the ultimate result & outcome, look no further than where you are today. We are more technologically advanced than at any time in human history.
The result is that we have 11 million more jobs than available workers. It’s kind of the opposite of unemployment.
Innovation is what got us here.
Twenty years ago, no one could have foreseen ALL of today's new job opportunities as a: drone operator, quantum machine learning analyst, YouTube creator, a podcaster, social media director, app developer, information security analyst.
New jobs that didn’t exist before, like a digital marketer, TikToker, metaverse wearables developer, and on and on.
Well, that right there is evidence that in twenty years, it’s hard to foresee what new jobs WILL exist that don’t exist today. But they WILL be created.
Even eBay, which some regard as a “digital yard sale” company - though they’re more than that. But eBay just announced new hires for Web3 and NFTs—those fields barely existed two years ago.
In a few years, when self-driving cars replace Uber drivers, those driver jobs will simply migrate to better-and-higher uses, just like it did for jobs of a bygone era like telephone switch operators & travel agents & bowling pin boys & and elevator lift attendants.
But people will still fear for the "loss of jobs". Don’t fear for a loss of jobs. Fear for a loss in innovation.
American innovation drives all this job growth.
So the fact that we aren’t having a recession anytime soon is really frustrating for all the permabears.
Politics is another sad reason that people create gloom & doom-type of media.
Some people wanted to WISH a recession into existence since last year, especially leading up to last year’s mid-term elections because they wanted to sow seeds of fear because they didn’t like the political party in power.
People think that if they can just convince enough people that there’s a recession, then they can topple the current administration.
Then if that incumbent administration gets toppled and THEIR people are now in power, even if it doesn’t change anything in the economy, that same recession-promoter will stop promoting a recession because they got their political wish. It’s politically-driven.
I don’t do that here. I don’t do left-right politics. Instead, I do up-down. Up is integrity. Let’s go up.
I first heard that up-down framework from Dr. Chris Martenson - someone I really respect. We had him on the show a couple times here.
How do you do up-down instead of left-right? Follow people that you disagree with on social media for some new perspectives.
Trying watching some YT channels that you don’t agree with. Even delete your YT history & start over if that does the trick.
Today’s suggested video and social feeds can often keep people in one narrow “think” silo.
So two big reasons that crash bros have been wrong are discounting American innovation and being blinded by politics.
OK. Well... so what? I mean… really… like… who cares?
What if gloomer-and-doomers plow ahead with more fear-mongering headlines like: "giant crash ahead", "total market collapse" or "massive depression coming"?
How does that really hurt anyone?
Like I briefly mentioned last week, it matters because it keeps us living in fear.
Your brain's amygdala is wired to be stimulated by danger, alerting your nervous system.
Has all that dreary material from some other sources talking about crashes and depressions and collapses even made you want to... quit your daydream?
You'll never get that lost time back.
Permabears rarely admit that their dire predictions were wrong. They'll just go on making more intransigent apocalyptic forecasts in order to get clicks.
People have been predicting the end of the world exactly since... the beginning of the world.
Let’s bring some balance here. Let’s talk about both the bad news and the good news.
If you & I believed all the bad news, a meteor would have plummeted from the sky and struck us both dead by now.
That’s why some people with their constantly dire predictions want you to think.
It’s the old school media notion of “If it bleeds, it leads.”
Don’t believe for one second that I think that America’s powers that be are all 100% responsible & looking out for your best interest.
Janet Yellen recently said: “You don’t have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years.” Yes, that’s what Treasury Secretary Janet Yellen said, who, as longtime listeners know, I have called “Grandma Yellen” because she looks like my late Grandma Weinhold. C’mon - she just looks like a Grandma. Nothing wrong with that - she looks like a sweet ol’ grandma. I’ve definitely disagreed with her in the past. That is, I’ve disagreed with Yellen, not my Grandma. Ha! But Yellen is right on this one. And yes, Yellen works for the president. But she’s not the only one who’s starting to see the possibility of a recession becoming less likely. Economists at Goldman Sachs lowered their estimate on the possibility of a recession in the next year from 35% down to 25%, and that is thanks to the strong labor market. A 25% chance of a recession this year, though some forecast it higher than that. Speaking of the President, I was hoping that one Joseph Robinette Biden, Jr. would have talked about housing more in last week's SOTU address that he delivered. In any case, the strong labor market is keeping us out of a recession. And MY take is that job strength is underscored by a legacy of continued American innovation.
But we won’t play the Star-Spangled Banner again this week like we did last week… emmm because some of those jobs are part-time jobs.
Coming up straight ahead - some bad real estate news - what about those falling American home prices?
Learn more about GRE and how our mission helps you achieve financial freedom - not debt freedom - but something more important - financial freedom - at our educational website, GetRichEducation.com
Follow Get Rich Education on your favorite social media platforms - Instagram, TikTok, Facebook, LinkedIn, Twitter and YouTube.
On most every social platform, our name is Get Rich Education. Pretty easy to remember! We are easy to find on social.
Might I first suggest our YouTube Channel.
That’s where you’ll get some great, free in-depth learning, including where we’re about to release a video of me shopping in grocery stores in various US states - yes pushing a shopping cart through the aisles - for evidence of inflation and what that means to you. Look out for that on our Get Rich Education YouTube Channel.
More straight ahead. I’m KW. This is GRE. _________________
Last week, I told you why I don’t expect our core markets to see much price movement in the near term.
By our core market, that’s residential properties that are lower-middle class up the median in the US Midwest & South - which I call the stable markets - as opposed to the volatile, coastal markets.
As a real estate investor, you may very well care about the state of rent growth and occupancy rates so prices might not be the #1 thing, but they still matter to you.
Well, both US home prices and inflation BOTH peaked in June of last year.
The fact that last June was the peak of US home prices is per the widely-cited Case Shiller National Home Price Index.
And since then, national home prices have corrected back… 2.5%. Yes, down two-and-a-half percent from their price zenith, eight months ago.
Yes, a rare period where home prices have NOT appreciated.
Redfin recently told us that of the 50 most populous cities in the nation, the 10-11 that have fallen the most over the past year (so this is annualized here) - and I’m just rounding to the nearest whole percent here are:
San Francisco - home values are down 10% YOY
Sacramento, California: down 6% San Jose, California: down 6% Los Angeles, California: -5% Oakland, California: -4% Seattle, Washington: -4% Pittsburgh, Pennsylvania: -4%. I’m a little surprised at Pittsburgh. I just visited Pittsburgh a few months back and I don’t know why they’re down 4%. I might research this. Austin, Texas: down 3%. Not a coastal market, but a market that overheated in the pandemic runup. New York City -3%. Phoenix, Arizona: -2% Let’s get an 11th city in there with Boston, Massachusetts: -2% Alright, so, it’s chiefly volatile coastal markets that have experienced the price correction to this point. Most of those are mild. The only one down more than 6% is SF at 10%. But how far do they fall… in those high-priced, volatile, mostly coastal markets. And, hey. You can go back to this show from its beginnings in 2014 and 2015 and this is why I told you that we avoid the high-priced, volatile markets here - most of them coastal. They don’t cash flow. Their values aren’t stable, and their LL-Tenant laws don’t favor REIs at all. This is just what I’ve been talking about for over 8 years now - all on record - right here on this show. Alright, well that’s backward-looking. For some forward guidance, I told you about MY price forecast last week.
Here’s what some OTHER influential figures have to say about the future direction of the national median home price for this year:
CoreLogic expects a 2.8% increase.
Deputy Chief Economist at Redfin, Taylor Marr is forecasting a 4% drop in the median home price compared to 2022.
Chief Economist at Zillow, Skylar Olsen expects a more modest 0.5% decline.
NAR Chief Economist Lawrence Yun thinks prices will stay even, with no appreciable gain or loss.
And finally, Danielle Hale, Chief Economist at Realtor.com expects a 5% INcrease in home prices.
So, right there, with that panel of five economists, there’s a national HPA expected range for this year of -4% to +5%.
Now, I talked about the worst appreciating major markets & the national numbers.
How about the big-city real estate markets that have continued to appreciate & expect to continue to this year?
The Top 10 are just about all in the eastern half of the United States, expected to appreciate anywhere from 2% to 8%. In no particular order, they are:
Though mortgage rates have hit a five month low, now near 6%, you know, I think that MORTGAGE RATE direction is more difficult to forecast than home prices are.
But I’ll tell you, at this point, I will advise you that mortgage rates have more upward pressure on them than downward pressure since there’s high job growth.
High job growth can keep inflation buoyant so that makes the Fed want to keep hiking rates.
So, in summary. Home prices expect to stay stable or perhaps rise just a touch in many stable Midwest & South markets, and they probably have further to fall in high-priced markets, many of which are coastal markets.
Jacksonville, FL is one notable exception. That is one major coastal market that usually behaves like a stable market and has good cash flow.
Jacksonville is one coastal place that I like for investors.
Real estate has been more attractive to buyers this year, compared to last year as evidenced by the increase in purchase applications.
But for anyone that says that it’s never been a better time to buy real estate. I don’t believe that for a moment.
NEVER been a better time?
2012 was a pretty awesome time to buy real estate. That was about when prices hit some sweet lows. But those prices are never coming back.
I’ll tell ya, when do I think was the WORST time to buy real estate in the recent past? It was 2021. That’s when the housing inventory was so low and everyone was competing for houses and you had to drop so many contingencies that sometimes you had to feel like you better waive your home inspection (which is not something that I recommend). 2021 is when you often had to pay all-cash to compete against a horde of bidders. That’s bad. That means you’ve got no leverage. And 2021 is when you often had to offer over asking price. 2021 had choppy seas for buyers. But it was a good year for sellers. And you know, even in 2021, with it’s challenges, you would be hard-pressed to find a better investment than real estate when it’s carefully-bought income property. That’s still where you would have a strong risk-adjusted return, buying in the stable, cash-flowing markets where we do. We’re talking about “Real Estate Pays 5 Ways” type of properties - yeah. A San Francisco row house in 2021 that you had to pay all-cash & $100K over offer price for? No, not a good strict financial investment. But today’s market - now you’ve got more inventory and you have these incentives that more & more income property providers are offering you like I mentioned last week. I want to mention them again because they are so special, they don’t often exist in the marketplace.
There are three ways you can save thousands of dollars in today’s real estate market.
These three incentives - you can’t get them from every provider at GRE Marketplace. But this is now common. Ask about them.
1 - Many sellers are crediting buyers like you 2% of the purchase price at the closing table. You can use this to buy down your interest rate if you want to.
So on a $250K income property purchase, that’s $5,000 cash to you at the closing table.
I don’t know how long this incentive will last. Because though mortgage rates have fallen a full 1% from their peak, you’re still getting cash at the closing table to buy your rate down.
The second incentive is free property management for up to 2 years.
If you don’t have to pay a PM fee, that can increase your cash flow by about $150 each month - or more - on every one of your properties.
I don’t know how long that one will last.
3 - Rent guarantee. This means that if your property is vacant, the seller pays rent to you until the property is occupied.
That third one - the rent guarantee is the only one that I would expect will last long-term.
On your next income property purchase at GRE Marketplace, be sure to ask about these incentives.
If you’re listening to this episode in the distant future, they’re probably not going to be there anymore… then just, take this as a point of historical context.
Understand that GRE Marketplace is not like a big box store. It’s more like an organic farmer’s market where we help match you with experienced property providers.
And much like an organic farmer’s market, check back regularly for new offerings. It’s a vibrant market. And you see all those markets in the Midwest & South there. Check back every few weeks.
To help you out, we actually video-interview the PMs in most markets on that page.
Yes, with today’s incentives, your PM could be like your unpaid servant for two years - ha! We interview them right there on Marketplace to give you a good feel for them.
Wealthy people’s money either starts out in RE - or ends up in RE. And I really wish that a resource like GRE Marketplace existed when I began investing in RE. I had to figure out so much by myself then.
It is still free. There is still zero subscription fee. GREmarketplace.com is still a completely free service to you. Create one login and get access to all providers at GREmarketplace.com.
Next week, a show unlike any we’ve ever had before. I’m Keith Weinhold. DQYD!
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Mon, 6 February 2023
Learn my new outlook for 2023 and 2024 home prices. First, I follow up on my real estate prediction of 9%-10% appreciation for last year. You learn exactly how I performed. Why aren’t real estate prices expected to rise or fall substantially in the near future? Affordability is an upside constraint to home price growth. Low supply protects against a substantial price downside. So many have wrongly predicted a recession by now. (I have never said any such thing.) The latest GDP and jobs numbers beat expectations, frustrating gloom-and-doomers. It’s even possible that the Fed engineers a “soft landing”. Not all is well. 64% of Americans live paycheck-to-paycheck. America has galactic-sized debt. We have a labor shortage. Inflation is still high. Mortgage rates have hit a five month low, now near 6%. There are three ways you can save thousands of dollars in today’s real estate market. 1 - Many sellers are crediting income property buyers 2% of the purchase price at the closing table. You can use this to buy down your interest rate. 2 - Free property management for up to 2 years. 3 - Rent guarantee. This means that if your property is vacant, the seller pays rent until the property is occupied. The third one above is the only one expected to last long-term. On your next income property purchase, our free in-house Investment Coach can help you get these incentives. Start with Naresh at: GREmarketplace.com/Coach Hayden Crabtree, founder of My Property Stats joins me. His real estate deal analysis software helps you organize your existing real estate portfolio and analyze future deals. He’s also a successful author and specializes in RV & boat storage properties. GRE listeners get a 10% discount on his real estate analysis software at MyPropertyStats.com/GRE. Use Discount Code ‘GRE’ for 10% off your first year. Resources mentioned: Show Notes: GRE listeners get a 10% discount My Property Stats real estate analysis software: Get started with our free coaching on your next GRE Marketplace income property purchase at: RE values rose 10.2% in 2022: https://www.cnn.com/2023/01/20/homes/existing-home-sales-december/index.html Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE or e-mail: info@RidgeLendingGroup.com Analyze your RE portfolio at (use code “GRE” for 10% off): Memphis property that cash flows from Day 1: I’d be grateful if you search “how to leave an Apple Podcasts review” and do this for the show. Top Properties & Providers: Best Financial Education: Get our wealth-building newsletter free—text ‘GRE’ to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: Keith’s personal Instagram: |
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