Epic Real Estate Investing - 2008 Was Practice. The REAL Crisis Just Started (Fed's Never Done This) | 1438

Episode Date: March 6, 2025

In this episode, we examine the current state of the housing market in 2025, revealing the triple threat of inflation, high mortgage rates, and pressing governmental fiscal policies. Unlike the 2008 crisis, today's economic challenges involve soaring consumer debt and the Federal Reserve's inability to execute a soft landing after inflation exceeds 5%. We also discuss how major budget cuts could exacerbate the strain on housing and broader economic conditions. Learn key strategies to protect yourself, recognize opportunities, and stay ahead in these uncertain times. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Hey, strap in. It's time for the epic real estate investing show. We'll be your guides as we navigate the housing market, the landscape of creative financing strategies, and everything you need to swap that office chair for a beach chair. If you're looking for some one-on-one help, meet us at rei-aise.com. Let's go, let's go, let's go, let's go, let's go, let's go.

Let's go. 2008, banks collapsed, housing crashed, millions lost everything. 2025, everyone's telling you, this time is different. They're right, it is different. It's worse. Here's a fact that should wake everyone up. The Federal Reserve has never, not once in 100 years, successfully engineered a soft landing after inflation exceeded 5%. Never.

Yet, here we are in 2025, attempting exactly that, and it's already starting to unravel. Listen, if you own a home, have a job, or keep money in a bank, this might be the most important thing this year. Here's why. Inflation just hit its fastest pace in 18 months. First-time homebuyers have been pushed to their lowest levels in 43 years. And mortgage rates, they're stuck right around 7% while home sales have crashed to multi-decade lows. But here's what everyone's missing. In the next eight minutes, you're going to see why this isn't just another housing crisis.

It's the trigger for something far bigger, the mathematical proof that were in. in uncharted territory and why the Fed's next move could be the final straw. Let me show you what happens when these three forces collide because it's not just about housing anymore. It's about an economic chain reaction that could stretch from our neighborhoods all the way to D.C. and then all the way back again. The first force, inflation unleashed. In 2024, we kept hearing about inflation cooling down. Prices at the gas pump came off their highs and the Fed seemed ready to declare victory. Then, out of nowhere, inflation, inflation ticks back up in late 2024 and early 25.

Now we're seeing the fastest price increases in at least 18 months, and it's hitting food and housing costs the hardest. Why is this so alarming? Well, because the Federal Reserve has never successfully guided an economy to a soft landing once inflation burst above 5%. Yet that's exactly the tightrope that we're on. But inflation isn't just about prices at the pump or the grocery store. It's creating hidden cracks in our banking system that most people are missing.

Think about this. When inflation forced the Fed to hike rates at the fastest pace in modern history, it did something nobody was watching for. It devastated the value of bonds that banks hold as assets. We got a preview of this in 2003 when several regional banks collapsed overnight. The Fed patched things up with emergency measures, but here's the uncomfortable truth. Those patches were temporary, and now banks are sitting on billions in unrealized losses. If inflation forces more rate hikes, or if a slowdown causes more loan defaults,

Those patches might not hold. And this creates a dangerous feedback loop. Banks tighten lending to protect themselves. Less lending means fewer home buyers can qualify. Fewer buyers means more pressure on housing prices. And if housing prices start to crack, bank balance sheets look even worse. But here's a piece of the puzzle.

No one's talking about enough. Major government spending cuts are coming. While reducing the federal deficit might help curb inflation in theory, rapid spending cuts could send shockwaves through the housing market. How? Well, think about regions heavily dependent on government jobs and contracts. You see, when federal spending gets slashed, it doesn't just affect government workers. It ripples through entire communities. But that's just force one. Wait until you see what happens when it collides with this, the second force, housing's unseen pressure points. I mean, we keep hearing the market

is nothing like 2008. No subprime mortgages, no giant glut of empty homes. And that's true. This time, housing supply is tight. We're not drowning. and surplus properties like back then. So the average home price has held steady or even gone up in some areas, but there's a flip side to that coin. Inventory is scarce, and mortgage rates hover right around 7%. So guess who's feeling squeezed? First-time homebuyers. They're at their lowest level in 43 years. That's four decades of people trying to climb onto a housing ladder that seems roped off. So why do we care about first-time homebuyers? Well, they fuel the entry-level market, which in turn affects people who want to sell their starter homes and move.

up. If first-time buyers can't buy, that creates a traffic jam up the line. We're already seeing the crash in sales volume. Prices may not be crashing, but sales sure are hitting multi-decade lows. This isn't normal. It's like a heart that's barely pumping blood. You might still be alive, but your oxygen levels are dropping. Combine that with an uptick in inflation, and we're staring at a very weird paradox. High home prices, even higher mortgage rates, and fewer buyers pulling the trigger. That's why many homebuyers simply aren't listing their properties. They're locked into lower rates from years ago and don't want to give them up. This keeps supply low, which keeps prices high.

Meanwhile, affordability is shot. So if you're a renter trying to break into the market, good luck. So what's the hidden pressure point? Consumer debt. People are putting more on credit cards. Their balances are ballooning, and the rate hikes mean that debt costs a lot more to carry. Eventually, those bills come due. In 2008, it was subprime mortgages that sparked the crash.

This time, it could be the overall consumer debt spiral that breaks the system. Now, watch what happens when we add the Fed's impossible choice to this equation. And that's the third force, the Fed's crosshairs. You see, in previous cycles, like the 2001.com bust, or even 2008, the Fed had room to drop interest rates to nearly zero. They essentially printed money. They bailed out banks and kept the economy afloat, though many would argue it created a bubble. Today, the situation is flipped.

We're starting from a high rate environment. If the economy shows signs of faltering, can they really slash rates down to zero again, especially while inflation is still above target? That's the trillion dollar question. Now, here's another angle, the yield curve, which is the difference between short-term and long-term interest rates. That was inverted for months, usually a strong signal that a recession is just around the corner. But so far, no major recession has arrived.

The economy kept humming along. job numbers were robust, and many experts began calling it the most predicted recession that never happened. Then, just when people start to relax, inflation ticks back up. The curve starts to uninvert, and we face the possibility that maybe the real downturn is just late to the party. If that downturn does hit, while rates are still high, the Fed might have to choose between fighting inflation or fighting recession. Historically, they've chosen to fight inflation if they have to pick. higher unemployment and a housing slowdown could be the result. That's not doomsday talk. It's just the cold math of monetary policy. Now, why this trifecta could go nuclear. I mean, let me show you

why this perfect storm is different from anything that we've seen before. Inflation refuses to stay down, hitting its fastest pace in 18 months. The housing market is frozen, high prices, tight supply, record low transactions, and the Fed is trapped with no easy way out. Here's what makes this truly dangerous. In 2008, once things went south, the Fed had a very clear playbook, slash rates to zero, print money, bailout banks, but today, they're boxed in. They can't cut rates without risking runaway inflation. They can't keep rates high without crushing the housing market further, and they can't print money like before without undoing two years of inflation fighting. But wait, you might be thinking, if housing supply is so low, how can there be a crash?

Great question. This isn't about a traditional crash where inventory floods the market. We're watching something potentially more dangerous, a silent collapse. And here's how it unfolds. First, sales freeze up completely. Then consumer debt issues spread. Remember, credit card rates are at record highs. Then next, confidence tanks dragging down other sectors. Then finally, if unemployment ticks up, foreclosures start rising. It's not the sudden crash of 2008. It's more like watching a slow motion train wreck. And the Fed can't hit the brakes without derailing something else. The scariest part, we're already seeing early signs. Home sales have hit multi-decade lows. Consumer debt is at record highs, and inflation just proved

it's not done with us yet. These numbers tell a story so clearly, it's almost scary. Mortgage payment to income ratio. In many markets, this ratio is hitting near record highs, similar to or higher than the peak of the 2006 bubble. Back then, the solution was easy money and zero down loans. Now, lending standards are tighter, so people who bought homes are qualified, but new buyers can't afford to enter. That's a choke point. Then, rate of change in Fed funds rate. The speed at which rates jumped from near 0% to over 5% is the fastest in modern history. Whenever the Fed moves this quickly, something usually breaks. So it could be banks, like we saw in 2003 when a handful of mid-sized banks failed. The commercial real estate market could be that, which is under strain, or households drowning in credit card debt.

These are all the math-based signs that say we're in brand new territory. I mean, sure, maybe the Fed engineers a miracle. But the data doesn't lie. We've never landed softly after inflation soared above 5%. So if you're banking on a rosy outcome, realize you're betting on something that's never been done. Now, here's where politics could tip the scale. A piece of the puzzle that no one's really talking about enough. Major government spending cuts are coming.

Donald Trump and Elon Musk, they're on the rampage for the next. two years to do this. While reducing the federal deficit might help curb inflation in theory, rapid spending cuts could send shockwaves through the housing market. I mean, think about regions heavily dependent on government jobs and contracts. When federal spending gets slashed, it doesn't just affect government workers. It ripples through entire communities. Private sector contractors lose business. Local businesses see less traffic. And suddenly, you've got homeowners in these areas struggling to make mortgage payments. This isn't just theory. Government spending directly impacts local housing markets. When federal budgets tighten, regions with high concentrations

of government jobs and contractors feel it first. We've seen this play out in past budget cuts. Property values wobble in areas around military bases during defense cuts. Housing markets around NASA centers shift during space program changes, and federal contractor-heavy regions see immediate effects when budgets shrink. Now imagine those typical effects amplified across today's already stressed housing market. And then there's the banking factor. Are we sure it's stable? In 2008, banks were the villains. Risky lending, zero oversight, boom, collapse. Today, banks are suddenly more stable with stricter lending standards. Yet we've already seen a few regional bank failures in 2003 because rising rates crushed the value of their older bonds and loan.

Many survived only through emergency measures. Is that problem truly fixed, or did we just patch it up with duct tape. If a slowdown hits and more borrowers start defaulting, a few more banks might wobble. That kind of scenario brings back memories of 2008. Panic sets in and credit dries up. So what's the Fed's next move? Could it be the final straw? Well, if inflation stays hot, they might lift rates again, or at least keep them high, that pressures housing, businesses, and eventually might push the economy into recession. If they pivot too soon and cut rates, inflation could come roaring back, which forces an even harder clamp down later. It's like a game of chicken, and so far, history shows the Fed doesn't have a winning record with

these odds. So how could this be the final straw for housing? Well, picture this. Inflation stays above target. The Fed holds rates high. Mortgage rates hover around or above 7%. A stagnant housing market with near record high prices meets a wary public who's watching their credit card bills pile up.

And homeowners with shaky finances, they start missing payments, especially if job markets soften from government spending cuts or other economic shocks. And over time, you get a rise in foreclosures, not a tsunami, but enough to rock local markets. If banks start to bleed again, credit tightens further, causing an even steeper drop in sales and eventually bending prices downward. That feedback loop can tip us into a more serious downturn. So now that you see what's really happening, how can you protect yourself? Great question. Here's what you need to do. And I mean, look, in a few minutes, I'm going to share something pretty exciting that I'm doing in Vegas

that could dramatically put you on the winning side of this market. But whether we end up working together or not, I want you to have these five critical strategies, and the fifth one is by far the most important one. Because here's the truth, in uncertain times, a feud defensive and offensive moves can keep you ahead of the curve. I mean, most people freeze when the economy gets shaky. Smart investors, they lean in,

because when the masses panic, opportunities multiply. So here's how to stay on the offensive without compromising your defense and come out ahead. First, invest in your education because ignorance is expensive. Economic uncertainty, it's not the time to play blind. Don't bury your head in the sand. The more you know, the more you control. Study creative financing and problem solving so you can recognize and capitalize on opportunities when others hesitate.

Number two, build income generating skills so you can make money in any market. Because in times of uncertainty, one thing separates those who thrive from those who struggle. Skills that print money. So instead of relying on a job market that you can't. control, develop high value skills that let you create your own income. Skills like sales and negotiation, marketing and lead generation, creative financing mastery. You know, with interest rates high, you can unlock opportunities others can't touch. Investing in these skills now means you won't just survive this market. You'll own it. Number three, position your credit and leverage. Get it before

you need it because in uncertain markets, capital access, that's everything. And here's a fact most people learn the hard way. Credit is easiest to get when you don't need it. And right now, banks are tightening their lending standards. The same lenders handing out loans left and right a year ago are now scrutinizing every application. But those with strong credit and pre-approved lines of capital will have a massive advantage when opportunities arise. So considering these following moves, increase your credit limits. This boosts your available credit and proves your utilization ratio and gives you more flexibility. Then open new credit lines strategically.

So if you qualify for new business lines of credit or HELOCs, a home equity line of credit, Consider securing them now, not necessarily to use them now, but as a tool in your toolbox and a potential deal funding source. Then strengthen your relationships with private lenders. Banks aren't the only game in town. Build relationships with hard money lenders and private investors, so you can take down deals while everyone else is stuck waiting for bank approvals. The fourth thing is solve real problems and get paid for it, because the big secret to making big moves in any economy is that money follows solutions. And right now, plenty of people, and soon many more will need. help. I'm talking about distressed homeowners, divorce, job loss, and relocation cases, and landlords

with bad tenants. Many would love a simple exit, especially one that lets them avoid capital gains tax, and that's where your creative financing comes in. By focusing on people over properties, you'll structure better deals. You'll build long-term wealth and help others in the process. And what I consider the most important action that you can take. Number five, be intentional about your environment. Your success in real estate isn't just about what you know. It's about who you surround yourself with. The right environment will fast track your growth, while the wrong one can keep you stuck. So build your community.

Deals don't just appear on Zillow. They come from relationships. Surround yourself with action takers by joining real estate investor meetups, by joining mastermind groups, by joining mentorship programs. The right people will challenge you, share insights, and connect you to opportunities you wouldn't find on your own. Find support and guidance. Learning alone is slow.

A strong network of investors, mentors, and accounts. accountability partners will keep you on track and push you through obstacles. If you're serious about growing, invest in the relationships that will get you there faster and expand your ideas and resources. The best strategies aren't always obvious until you hear them from someone who's been there. So be in rooms where creative financing and market insights and funding sources are being discussed. The right connections can shortcut your path to success. Your environment, it shapes your results. So be intentional about the people, conversations, and influences that you allow in. Now, I know what you're thinking.

This all sounds great, but where do you start? How do you actually put these strategies into action? Listen, I've spent years perfecting these very strategies, and I've discovered something interesting. The people who succeed in times like these aren't necessarily the smartest or the richest. They're the ones who take action while everyone else is frozen in fear. That's why I'm doing something pretty unconventional. I mean, all the details are available at intensive 2025.com, but here's the gist. I might be able to save you a little time.

I'm hosting an exclusive two-day intensive in Las Vegas where I'm pulling back the curtain on everything. I mean everything. The exact systems that my students are using to pull $25,000 plus from their very first deals. The creative financing strategies that let you control properties without traditional bank loans. And the secret sauce that's helped normal people build seven-figure portfolios without dealing with tenants or toilets. But here's the thing. I need to be completely transparent here. This isn't for everyone.

I mean, just like I showed you how the feds never managed a soft, landing after 5% inflation. I've never seen someone succeed in real estate without being absolutely committed to taking action. That's why we're incredibly selective about who we accept. So we're looking for serious players who, one, have a credit score of 680 or higher because we're setting you up with access to up to $150,000 in zero interest funding. I'm looking for people that are ready to implement these strategies immediately. And I'm looking for people that want personal guidance through their first deals. If that's you, here's what we're offering. We're flying you out to Vegas, Yes, flight and hotel on me.

We're setting you up with your LLC. We're giving you access to funding, and I'm personally mentoring you for three months to ensure your success. But, and this is crucial, we only have 20 spots available. And given what I've shown you about where the market's headed, I expect these to fill up fast. So go to intensive 2025.com to apply. If you qualify, you can pick a time for us to hop on the phone

and confirm that this is going to be the right thing for both of us. This market will make or break investors. So people who play defense right now, they're going to be sitting on the sidelines waiting for better conditions that may never come. Meanwhile, those who sharpen their skills, stay flexible, and look for opportunities, will build the foundation for massive wealth over the next decade. At this point, many Americans feel like, hey, it's 2025, inflation's high, but I'm still employed, things aren't so bad.

Well, they may be right for now. But remember, the yield curve warning, the Fed's high rates, the new administration cuts, and stubborn inflation are all swirling around the same pot. It doesn't guarantee a catastrophic crash, but it does set the stage for a serious reckoning if any one of those elements break. This isn't just another housing crash story. No, it's a collision of politics, debt, and monetary policy that we haven't seen in modern history. I mean, if someone tells you, oh, it's just like 2008, they're missing the big picture. This time is different because the usual tools, massive rate cuts and open-ended bailouts, aren't easy options without risking more inflation. The Fed says it's got everything under control, but so far, that's never been proven with an

inflation above 5%. Whether this ends in a mild downturn or a full-blown crisis, a lot hangs on decisions made in the next few months. So the real question is, are you ready? If the Fed stays aggressive, housing could freeze even more. If the government cuts too deep, job losses could creep in. And if inflation refuses to cool, the game is up for a lot of overextended households. It's a massive chain reaction waiting for a spark. And in times of chaos, it often brings the greatest opportunities. If you know where to look, the actions to take, and how how to protect yourself. So if you like what you see at intensive 2225.com, join us.

If not, no worries. At the very least, make sure that you're subscribed because I'll be here every step of the way, breaking down the data and trends that matter. And until next time, stay sharp, stay prepared, and keep your eyes open for what's coming next. Take care. And that wraps up the epic show. If you found this episode valuable, who else do you know that might too?

There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them and ask them to click the subscribe button when they get here and I'll take great care of them. God loves you and so do I. Health, peace, blessings, and success to you. I'm Matt Terrio. Living the dream. Yeah, yeah, we got the cash flow. You didn't know home boy, we got to cash low. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.