A coin is has three sides.
You know it.
And in order to look at this market today, you kind of have to stand on the edge
because there are lots of ways to make money right now in real estate.
David, you want to expand on that a little bit more?
Yeah, I think what people in our space we hear a lot of.
Should I buy or should I sell?
Should I buy or should I wait?
It's always this binary approach to it's either this or it's that.
And I think personally, that perspective comes from
stock trading because you make money in stocks in one way.
You sell it for more than what you paid for it.
And so the buy low sell high game is what happens when you're in
like publicly traded investing, which for a long time has been
the only way that the average American could invest their money.
But with improvements in technology in the education space,
this information is out there now. People can invest in real estate.
They can make money through real estate that they never could before.
And real estate, you make money in several ways.
We make money from cash flow. We make money from paying down the loan.
We make money from saving in taxes.
We make money from paying less taxes on the money that we do make.
We make money from appreciation.
We have tools like refinances that we can use.
Inflation tends to favor real estate a lot.
So it's this sort of artistic approach to wealth building
that's that's different than stocks, which is just there's one way
and there's one way out.
You research company, you hope that it goes up
and you buy something that you think is undervalued.
So when people ask the question, well, is this a buyer's market
or a seller's market? Should I wait or should I buy?
That's an appropriate question.
If you're trying to figure out if you should buy Tesla stock,
it's not an appropriate question if you're looking to buy real estate.
Real estate is much more art than pure science.
The question
that I think people should be asking is, how should I buy in a market like this?
What types of properties should I look for in a market like this?
What should my strategy be in a market like this?
And like you mentioned,
Robert has this theory that you shouldn't say is hedge right or is tails right?
You should stand on the edge of the coin
and look at both sides and then ask yourself
the question of where things headed and how can I position myself to succeed?
Everybody is laser focused on these interest rates
and they think that, you know, that is and it is true
there's definitely some slowdown as a result of rising interest rates,
but it's lack of demand as a result of that
where we still have a massive supply issue.
And I think that a lot of times people are just focused on one thing.
When you agree, oh, 100%, and it's the lazy way of looking at stuff
is you want to just say, well, what's the
what are our prices going up or prices going down?
And that's the only metric that they're looking at.
And the way I know this is madness is for the last five years,
everyone in our space has been complaining nonstop
that the market is so hot, there's bidding wars,
they're having to waive their contingencies.
They're having to write not just over asking, but how much over asking.
They don't have time to analyze the deal.
They don't have time to sit with it and think about how they feel.
You've got to go, go, go.
And it's been very aggressive.
Well, now that interest rates have gone up, we finally have brought some balance
to the force.
The market has cooled off. Houses aren't selling in three days.
You got a little more time to think about it.
You can compare your different options.
This is what everyone was asking for.
But what do we hear?
Oh, this is ridiculous. Rates are too high.
None of the deals work anymore.
I can't find anything that will catch low.
The market's going to crash. I'm going to wait.
And they found another reason to make the excuse of not getting into real estate.
And I think that comes from the question of, well, should I buy or should I wait?
Whereas me,
I saw rates go up and I watched the market cool down and I went on a buying spree.
I've got
14 properties in contract
right now that have all been done in the last 30 days or so.
And it's because I'm like, This is the best opportunity that I've seen to buy.
Been waiting for this for so long and it's finally here.
But I'm doing great.
And all the people that are sort of following
us are still stuck on the sidelines, not knowing if they should jump in or not.
Well, and I think, too, you know, it used to be houses
would sit on the market for 30 days, right.
And nobody would think twice about it.
Now it's like, oh, my gosh, it's overpriced.
Everything's crashing down.
It's like, no, it's just seen again.
And people are able to do an inspection like you said, where
a few different options decide which one's best for them.
I think what is it, the average listing
historically like 4 to 6 months in each market is that kind of normal?
Historically, that's always been normal.
Like when I was a kid, that's what you would see is yeah,
this was before the internet when I was really young.
I'm not a dinosaur, but I remember a time without the internet.
And so they would actually have to put the price of the house on the for sale side.
You guys, you remember that? Wow. Yeah, that's right.
Right.
Like Century 21 and it would say 249,000 or something like that, like on the sign.
Well, they don't have to do that anymore because
now they want you to go to the website, look it up, they can get your information.
It becomes a funnel for them.
But houses would sit for a long time.
Buyers would go look at all the houses in town,
or they would even at one point before we had an MLS,
they'd have to bounce from broker to broker
and say like, you show me your listings and you show me your listings.
This phenomenal house is selling in three or four days and waiving inspections
and us even be able to get your loan in 12 days, 14 days.
This is unusual.
Technology has improved rapidly and it's changed the way people buy houses
and therefore the way they make decisions.
But that's not I would not say that's a healthy market.
It's a huge decision to buy a house by an investment property.
It's not something that ideally people have to decide in.
I mean, literally, sometimes a couple of hours houses hit the market
or they've already got other offers and you got to decide
how much you're going to write and how you're going to write it so quick.
We finally are getting the break you've been waiting for.
Buyers have a little bit of leverage now.
The scales have shifted.
And of course, the human brain that looks for reasons to be afraid
comes up with all the reasons why.
Now, I got another reason I shouldn't buy real estate,
but I think sellers are just starting to wrap their heads around the fact that
they're going to have to bring their price down.
Because we were talking about this earlier on our live
that people get greedy so they don't just try to time the the the
the buying they try to time the selling right so they know they've wanted
to sell their house
and they've waited and then it's went up every month
and they've waited and they've waited.
Well, now you have a whole bunch of people that are freaking out
because the markets are in a tap and they're like, Oh,
I got to list my house right now and I want to get this price for it.
But maybe that price is overpriced, right?
And they have to come down a little bit.
So I think you're getting a little more inventory
now than maybe you will and a little bit like in a month or two from now.
I think you're exactly right.
I think you made a great point that sellers get greedy also
and that as real estate investors, when we make decisions
based off of numbers and logic, we're in a advantage
over the people that don't educate themselves on how real estate works.
The person that just wants to go by that listing to live in it,
that doesn't really know what's happening in the market there.
Their greed hurts them.
The sellers that waited too long as they were watching
prices go up and then they saw that prices started to come down.
They're like, Oh, throw it on the market right now. Try to get it sold.
That greed puts them in a position of disadvantage
and then us being the buyer, this time we're in the position of advantage.
We I will I won't even look at a house that hasn't been on the market 30 days.
I'm looking at stuff that I think has just been sitting for a long time.
I'm writing very, very aggressive offers.
And I'm
I consider writing an offer in a market like this, like a boxer that throws a jab.
No one's trying to knock out their opponent with a jab.
You do that to feel them out.
You're trying to figure out how are they going to respond?
I want to know, how desperate is this seller?
Are they the person, like you said,
Danielle, that has another house in contract that made the cardinal
sin of real estate where they bought their next house before this one sold.
And their
that pressure is squeezed on them and they're not sleeping at night in
there, fighting with their spouse.
And they know it's, hey, this
our house is worth more, but we just I want to be done with it.
I'm looking for those opportunities in a market like this
and they're in that position, just like you said, because of greed.
You talked a little bit about because this is when the professional investors
start looking at things differently, because I always believe
I always I sometimes I buy something and I'm like,
I can't believe anybody else didn't see what I see here.
Right. It just blows my mind.
And I mean, this is up for public consumption, obviously,
and it's really what you see, right.
David So one of the things that I think people miss when the markets like this
is that there are value add opportunities that you never would have got a chance
to take advantage of because that house would have bought
would have been bought by someone else.
So there's a neighbor, a city called Castro Valley in the Bay Area
that's known for really good school squares, really safe area.
It's kind of surrounded by some not so great areas.
So it gets higher than normal demand for people
that want to live and want to rent there.
It's usually you don't you can't buy anything.
It hits the market. It's gone.
So I found a house that is listed at 1100 square feet.
That's a31.
No one wants a house with one bathroom.
No one wants 1100 square feet.
But I noticed that it had just
from looking at the pictures, it looked like it was built on a basement.
So I set my assistant by and the agent had not put any of the pictures
of the unfinished basement and the garage anywhere on the MLS because it's ugly.
And they didn't want that to deter people
that had recently had the price drop from 950 to 850.
And the house looked like no one's going to want to buy an 1100 square
foot house, but it has a big bedroom with the square footage
not included in the 1100 and a massive basement and garage.
I love that.
I love converting basements.
It's some of the cheapest ways
that you can literally double the square footage of this house.
And I don't have to build new infrastructure.
There's no framing.
There's very little plumbing.
The plumbing and electrical
I do read is very easy because it's on a raised foundation.
That's a property that I'm going to write an offer on and likely lock up
that I'll be able to take from 1100 square feet to probably more like 2400
square feet.
Refinance that when I'm done and recover all my capital have 2 to 3 units
that I'll be able to rent out
individually in a great neighborhood that no one else even saw.
Like.
And I'm looking at like, how do people not recognize like but they don't know.
I could convert that whole basement for 60 grand, right?
They just they don't understand that element of real estate.
So there's a lot of examples like that.
But I love when the market shifts like this
because everyone else get scared, they all back out.
And now stuff like this that I just someone with a paid asking price or more
for that house with no intention to do any with the basement in six months ago.
Now I have an opportunity to actually go after it.