Epic Real Estate Investing - 5 Questions Every Real Estate Investor Should Be Asking Right Now | 1117

Episode Date: January 21, 2021

In today’s episode, Matt shares 5 questions every real estate investor should be asking, right now, about the housing market and its possible crash! Tune in and find out more! Learn more about your ad choices. Visit megaphone.fm/adchoices

Housing market crash predictions are a dime a dozen these days. You've got doom and bloom on one side and super optimistic on the other, with both camps citing data and statistics formulating their bold statements. The answers may not lie in their statements, however, but rather in the questions they're not asking. As my good friend, Tony Robbins, says, if you want better answers, ask better questions. So I've got five key questions that every real estate investor

should be asking about the housing market and a possible housing market crash. Let's go. This is Terrio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for.

more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit r-e-i-a-a-a-a-se.com. Here's Matt. Hi, my name is Matt Terrio, CEO of Epic Real Estate, where we show people how to invest in real estate so they can escape the daily grind and retire early. Real estate economist, Polina Rishikov, with more than 15 years of valuation experience across both residential and commercial real estate, posed five big questions for real estate in 2021. Now the answers to her questions will provide critical insights as to whether or not the housing market's upward trend of 2020 is going to hold or not in 2021 or if it will shift in the other direction and potentially crash. Further, the answers to these

five questions will expose useful information in getting ahead of real estate opportunities for buyers, sellers, and investors who have their eyes and ears open to the housing market. Polina's question number one, what will happen to non-forbearance mortgage delinquencies? If you're a real estate investor, whether you're in the game to flip or hold, you should pay attention to this. With all the talk around property owners protected by the mortgage forbearance, it's important to note that almost 4 million delinquent mortgages, about 24% of the delinquencies, have not entered forbearance programs. As the economy is not out of the woods yet and continues to struggle, financial and personal

distress of property owners is very likely to creep into the housing market despite the strength it showed in 2020. One reason for this is that certain types of mortgages, such as jumbo mortgages, non-qualifying mortgages, and portfolio loans, they don't qualify for CARES Act forbearance programs. And you can see here, the blue portion of the bar chart represents those delinquent mortgages that are in forbearance programs, and the red are those delinquencies that are not. It'll be important to keep your eyes on mortgages delinquent more than 90 days, as it's likely to reflect permanent job loss for the owner, and they'll likely be turning to their equity for fast financial relief. Operative words here are fast relief, as that typically equates

to discount. Question number two, will rents for single family residences continue to increase? If you're a buy-and-hold cash flow type real estate investor, the best kind to be, in my opinion, this could spell big opportunity for you. You know that single-family rentals provide great investment returns in multiple ways through appreciation, depreciation, amortization, and cash flow. Nothing provides the average person, the realistic ability to build significant wealth better and faster than this type of real estate investing. Now, it's become common knowledge that housing markets have been appreciating

at unexpectedly rapid rates during the pandemic. due to both low inventory and historically low interest rates. Most experts expect this trend to continue well into and likely throughout 2021. Now, the new administration's plans to extend a $15,000 tax credit to first-time homebuyers will certainly drive housing demand even more and subsequently drive appreciation. Consequently, this almost assuredly will continue to drive rents upward, ensuring single-family rentals to be lucrative investments. Cash flow investors will find this year-over-year chart,

comparing rent growth of apartments to single families very compelling. While apartment rents are on a significant decline, single family rents are moving sharply upward. Polina's third question, are condos a viable option for buyers making the homeownership leap? Primarily young homebuyers should care about this. But if buyer demand moves to and grows for condominiums, this can spell great fix and flip opportunities for investors too. Supply of condominiums relative to single family homes was noticeably bigger, year due to the desire of privacy during the pandemic.

As a result, 2020 ended with condos selling at a record 17% discount compared to single family homes. Expecting improvements with the COVID situation due to growing vaccine distribution, the condo market represents opportunity for both new homebuyers and investors alike. After all, the investor's mantra is to buy low and sell high, and right now, condo prices are comparatively Question number four, when is it safe to move back to the city? And this is a really good question as younger millennials have been moving back home in droves according to the United States Postal Office Mail forwarding numbers. The migration isn't necessarily to escape urban centers forever, but they may stay home

for a while for health and safety reasons. Investors of and those investors eyeballing urban properties should watch moving patterns closely. Dr. Fauci, who needs no introduction, in a September interview told Business Insider that even with the vaccine rollout, he doesn't see a return to a pre-pandemic sense of normal until late 2021, maybe even into 2022. God, I hope he's wrong, but it is what it is. Urban rents versus suburban rents will be the big indicator to watch to determine good timing for investing in the city. And additional opportunities may become available as it becomes more clear how,

eviction moratoriums and reduced unemployment benefits affected landlords during the economy shutdowns not to mention how taxes utilities and their own mortgage payments may have pushed them into distress question number five how much quicker do standard three-bed two-bath property sell versus everything else again another good question for your first-time homebuyers and your fix and flippers to ask as well as monitor those numbers because with the forementioned $15,000 tax credit for first-time homebuyers and FHs loan limits increasing in 2021 from 765,000 to 822,000, we could witness an increase in home purchases

by first-time homebuyers next year, most likely. A gauge to watch for this is the sales volume of your updated three-bed, two-bath homes, as they're the most popular among your first-time homebuyers, and the effect is increased activity of your fix-and-flip investors. And if the sales of these properties continue at their current pace, even as prices are right, you'll know it's a land grab, excuse the pun, for first-time home buyers that's causing it. Fix and flippers that want to ride this wave and provide the supply for this growing demographic, be sure to address millennial buyer's current preferences for updated homes with moderate amenities to get maximum profit. However, be prepared for a slightly longer days on market,

especially in your appreciating markets where appraisals are lagging behind the appreciation trend. Yeah, yeah, we got the cash flow You didn't know home boy, we got the cash flow This podcast is a part of the C-suite Radio Network For more top business podcasts, visit c-sweetradio.com