Epic Real Estate Investing - Housing Market Rent Squeeze! (Most will lose, some will win!) | 1230

Episode Date: August 25, 2022

People who play by the rules are the ones who lose. Are you going to be an owner or a rentee? Listen to Matt in this episode and hear some of the rules that are actually going to be useful for your real estate investing business growth! BUT BEFORE THAT, Matt shows you how to invest in metaverse real estate. Are you ready? Let’s go! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. How to invest in Metaverse real estate. And if you're a real estate investor or an aspiring one and you love making money doing what you do, you're going to want to know how to do this. I'm diving deep and I'm figuring it out and I'm going to let you in on what I have already learned. You ready? Let's go. Welcome to the all-new, epic real estate investing show.

The longest running real estate investing podcast on the interwebs, your source for housing. market updates, creative investing strategies, and everything else you need to retire early. Some audio may be pulled from our weekly videos and may require visual support. To get the full premium experience, check out Epic Real Estate's YouTube channel, EpicR-EI.TV. If you want to make money in real estate, sit tight and stay tuned. If you want to go far, share this with a friend. If you want to go fast, go to rei-Aase.com.

Here's Matt. All right, so by the time we're done here, you'll know how to invest in Metaverse real estate and the important pros and cons to know before you make your first investment. Oh, and by the way, if you'd like to dive in and take some real action right away in the real world of real estate and flip a house, say, in just one day using my funds to do it, I'll show you how you can pull this off in your market right now at Matt's freetraining.com. You know, it's bizarre. Strange. Downright freakish, isn't it?

I mean, I never in my wildest dreams thought, I'd be recording on purchasing real estate in the Metaverse. But here we are. People are actually scrambling to buy virtual land. Yes, virtual, meaning it lacks tangibility and doesn't exist in the physical world. I mean, you technically can't touch it. But people are paying millions of dollars to buy it. You know, an associate of mine here in Las Vegas recently purchased a virtual gas station

inside a plate-to-earned game called Poka City. And you may scoff at the absurdity of that, but that online gas station, pays out a weekly passive income yielding $16,000 a month. I mean, who's laughing now? I mean, the Pococity gas stations are currently sold out, but don't worry, there are other digital real estate options up for grabs inside metaverses such as the sandbox and DeCentral Land and more. So let's dive in first on how to purchase plots,

and you may even end up being virtual neighbors with Snoop Dog or Steve Aoki. You know, a plot of land situated between these two celebrities is currently on sale for a cool $2.5 million. That's pretty steep. And you won't even get to spy on Snoop as he grabs his mail nor watch your mansion shake violently as Aoki practices a DJ set. Fortunately, there are cheaper plots of land. Sure, they may be located in the grittiest parts of the sandbox where you won't find a whole foods for miles. But chances are, if the evolution of the Metaverse maintains its trajectory and momentum, their value will increase over time. As of this recording, the lowest-priced virtual territory is just under $10,000. Now, investing in virtual real estate follows almost the

same procedure as buying cryptocurrency. So get your investment portfolio ready. Get yourself ready to invest in Metaverse real estate. And then I'll show you what there is to consider when it's time to actually pull the trigger on your first virtual investment. So the first thing, you got to set up a digital wallet. You know, every Metaverse platform operates on its own unique currency. Decentraland, for example, makes use of mana. while Sandbox uses sand. And you will need to set up a digital wallet to invest in the Metaverse, and this is how you do it.

The second thing is decide which Metaverse platform you want to become a part of. The popular choices are Decentral Land and the Sandbox, and given their popularity among Metaverse enthusiasts, virtual lands are quickly getting snatched up here. So if you wait to get into this game, you might be left with scrap deals, away from where most users gather. There are more Metaverses out there on the Internet,

other than these two, though. So do your research before taking the plunge. Third thing, access the NFT marketplace. You know, every property in the Metaverse is a non-fundable token or an NFT. And to purchase virtual land, head on to the platform's marketplace. Compare and contrast prices and the desirability of the location. Also, consider your plans in managing the land. Will you be selling it after it reaches a certain value?

Or will you rent it out? Yes, people will pay you rent to use your Metaverse real estate. Or do you plan to hold on to it for your children to inherit? Now, the fourth thing, link your wallet to the platform's marketplace. You know, whether you want to purchase virtual land and decentralized land sandbox or any other Metaverse platform market, you must link your wallet to make your purchase. Then once connected, you will receive your purchase as an NFT.

So set aside some extra coins in your wallet for transaction fees to ensure a smooth and hassle-free transaction. And keep in mind that location is just as important in the Metaverse as it is in real life. land holdings next to plazas, green areas, and districts, which you'll see as blue areas, have more value than plots on the outskirts of Decentral Land. The downside is that they're the most expensive on the map, but there's a possibility that they can appreciate the fastest and make greater profits for their owners.

Although Metaverse properties are all the rage, they're highly speculative assets at the moment. The Metaverse market could plummet at any time, leaving you with worthless virtual real estate. So, invest responsibly. I mean, I'm looking at it very much in the same way that I would a weekend in Vegas. I'm not going to bet more than I'd be willing to lose. However, the odds here are much better than you'll find at the roulette or crap table. Now, if you're having a tough time taking this seriously, but you still got into real estate for the money, stay with me. You're going to want to hear about what's possible and what's happening right now.

All right, so despite the obvious absurdity of buying digital real estate, investors are taking it very seriously. So here's the deal. The internet, it's evolving and moving toward its next phase, Web 3.0, of which is simulating the real world into a cyberspace of digitally owned property, also known as the Metaverse. And investors are taking the plunge, grabbing digital real estate quickly. Firms are investing millions of dollars into virtual real estate with the optimism of doubling or tripling their investments in the very near future. On October 28, 2021, Facebook announced its rebranding to meta. ushering in the future of the internet with the Metaverse.

And Metaverse platforms at the time were only small communities of investors and players. However, people's curiosity about it grew since Facebook's rebrand. For example, Digital Real Estate Investment firm Republic Realm released a comprehensive report on the Metaverse land sales activity in 2021. And the report shows that by November of 2021, real estate sales across the biggest metaverse platforms totaled $187 million, more than twice the total sales in November the year earlier. So it was just in January of 2021, a plot of land sold at an average of $100. By December of 2021, individual plots were selling for an average of $15,000.

The Metaverse real estate sales in 2021, it exceeded $500 million. And in January of 2022 alone, Metaverse real estate sales reached $85 million in a single month. So current trends, they indicate that sales should double by the end of 2022. too. So the Metaverse is highly attractive to investors because it operates in an economy independent of external authorities like governments and banks. And I'm recognizing right now that the race to virtual real estate investments, it's strikingly similar to the domain name frenzy of the World Wide Web. But virtual real estate comes with more promising features than a simple domain name. The first thing is, you can earn impressive revenue by leasing out your virtual

property to brands or firms that need a working space within the Metaverse. I mean, the possibilities here are seemingly endless. The second thing, like a domain name. You can flip your land for a price higher than what you paid. I mean, millions are being made in these two ways right now. But will it last? You know, as exciting as it is to bring reality into a digital world and simulate real world experiences through pixels, virtual real estate, or the metaverse in general, it is a risky investment. Needless to say, it's all speculation at the moment. I mean, in prices, they can move quickly in either direction, up or down. So no one really knows exactly what the years ahead

hold or even the next few months for that matter. The harsh fluctuations of the market are not for the week of heart. I admittedly have a fairly high risk tolerance when it comes to investing, but I'm still very cautious when it comes to investing in digital land. The profits and potential do have my attention, however, and I think I'm getting very close, and I'll let you know when I make my first investment. So if you'd like to explore the possibility of working together one-on-one in the real world of real estate investing, go to R-EI-Ase.com.

Answer a few questions, and then just pick it to the time for us to hop on the phone and we'll start brainstorming some ideas about what it's going to take to get you to the next level of your real estate investing. We'll be back with more right after this. Boarding for flight 246 to Toronto is delayed 50 minutes. Ugh, what? Sounds like Ojo time. Play Ojo? Great idea. Feel the fun with all the latest slots in live casino games and with no wagering requirements.

What you win is yours to keep groovy. Hey, I won! Boarding will begin when passenger Fisher is done celebrating. 19 plus Ontario only. Please play responsibly. Concerned by your gambling or that if someone close, you call 1-8665331-2-6000 or visit Comex Ontario.ca. Hope is not a financial strategy. Let's get back to work. Today I want to talk about the big rent squeeze that's going off.

It's about to cause some hand to call many. But some are going to win. That's probably been never a more important time. and history to really increase your financial education. Because things are, that gap between the rich and the poor getting wider and wider. You got to be really savvy when it comes to the economy, where it comes to inflation, what comes to this monetary policy. Your future really depends on it.

You know, even if you don't want to be a full-time real estate investor, and that's very much what we talk about mostly here, you've got to incorporate real estate somewhere into your financial plan, but you're just not going to have a chance So let me kind of tell you how you go in and who's going to lose. But let's take a look here at recent headlines. Inflation hits the rental market as higher mortgage rates. Linden supply pushes up prices, right? So that's the rental market is really being pushed up.

And that's really hurting a lot, a lot of people, right? But this one just came out today. Same story. Surgeon rents squeezing middle class America is the harder. The middle class is really going to get hurt. they don't do something about this. So the median rent payments for Bank of America customers surged 7.4% in July from the previous year, up from 7.2% in June. All the skyrocketing rents are squeezing Americans across the income spectrum, middle income, and younger workers are feeling the biggest pitch.

And so this significant increase in rent prices can have a meaningful impact on a household financial situation, particularly for middle and lower income households. So the rising rents are a. concerning developed because higher housing costs most directly and acutely effective, they affect the household budgets. So roughly 34% of households are renters, according to the Census Bureau data, but that figure is even larger for lower and middle income families, more than half, roughly 52.6%. And those are the people that are going to get hurt.

And why are rents rising? Why is this happening now? Well, first of all, probably inflation, right? Inflation is causing everything to increase. and your landlords, I mean, their gas is more expensive to, their food is more expensive to, and they've got people lined up because they need shelter. And so why is this happening? Well, it's right here.

This just came out a few hours ago. U.S. new home sales plunge for six straight month to lowest level since 2016. Economists have respected purchases of new single-factory homes to fall 2.5%. So why are sales plunging? And when they say plunge, they're talking about the number of houses. is being sold to sales activity. Why is that happening? Sales of new U.S. homes plunged more than expected in July, the lowest level at six years

of rising mortgage rates and relentless increase at home values slowed activity by edging prospective homebuyers out of the market. So the increasing mortgage rates are creating habit on the affordability for our new home buyers or lower income buyers and even are much of the middle class. New single family home purchases tumbled 12.6. percent to a seasonally adjusted annual rate of 511,000 units, the Commerce Department reported on Tuesday. It marked the sixth consecutive month of declines. Now check this out, though. Despite the slowdown and purchases, the cost of a new home continued to march higher in July,

with median prices jumping nearly 9% in July from the previous month to $439,000. So yes, new home sales are down 29.6%, but the price just went up 9%. So what does that mean for real estate investment? Well, first thing it means if you're the fix and flip business, the grade A properties, your grade A flips, those are selling. I would say you're not at least a minus in your fix and flip work, then you're going to be suffering a little bit. You're going to be sitting a little bit longer.

You're going to have longer hard money costs. You're going to have longer market time on the market. And if you're capital tied up, you're going to have an opportunity. cost because your capital is being tied up. So you've got to be careful if you've got to be fixing and flipping. But we're really talking about the rents. And this is why if people can't afford the buy, then they're going to have to rent. And that's why the competition and the activity from the sales market is moving towards

the rental market. And this is why it's not going. It's just going to go back and forth. It's got to be one or the other. And this is why. This is Maslov's hierarchy of needs. for a human being and over here on the far right, right at the bottom,

this biggest portion of the foundation of this pyramid is the physiological needs. That's air, water, food, shelter, sleep, clothing, and reproduction. So shelter is right in there. That's one of our biggest needs. That means that's where our attention and our energy and our money is going to go first. And then the next one up is safety needs.

So you've got personal security, employment, resources, health, and property. So your personal security and your health, And your property all falls into shelter. So the biggest portion of this pyramid is your housing, is your shelter. And right now, we are five million houses short to satisfy the population that needs shelter. That's why we're having this giant rent squeeze. And a lot of people are going to really get hurt. But there's a lot of people that are going to win as well if you know how to play this game.

I mean, people are going to win, people are going to lose. you'd have to choose which side you want to be out of which actions you're going to take. And a big portion of that, well, first of all, the foundation is housing is something everybody needs. So if you can control the supply of that, then you're on the right side of that equation. If you're on the demand side when everybody needs a house and you're fighting and competing for the shelter for that supply, then you're going to be competing and you're going to be getting, then you have to fight for that and overpay and it's just like they're paying for the rest, just like they have been for the house prices for so long. But if you get on the other side and you start controlling the supply, learn how to be a real estate investor, whether that's part time or full, and learn how to find deals and get control of them, if you're in control of the supply, you're on the right side of that equation.

That's one way, one way to win. The second way to win is when you look at the consumer price index, went to increase to a point up 8.5%. So it's your investments. Whether you're in the stock market, whether you're in gold, whether you're in cryptocurrency, whether you're in real estate or whether you even run up business, wherever you have your money, it's stored under your mattress and the money market account. If that's not generating at least 8%, you are losing. You're losing money each and every day.

So you have to learn how to invest and generate a positive 8%. And over the last year, even though we're hearing that the market is slowing down and the prices are being reduced, we just hit a new all-time high in our median price point first. Second of all, it's slowing down, but it's still growing. So year over year, we're at 10.5% in the housing. So that right there gives us, we're at least outpacing inflation. And that's exactly what real estate debt. The stock market hasn't done it. The cryptocurrency market certainly hasn't done it.

Your precious metal, like gold hasn't done it, and your silver has been completely obliterated. So everything that we've traditionally looked at for a hedge against inflation, none of it is working except real estate. So if you don't own some real estate, you are losing because you can't work enough to make enough to keep up. You don't have that many hours in the day. The wage increase, I believe, was 5.3% year over year. That's still under 8%. So that's losing. Got to figure out how to get some real estate into your financial plan.

Again, don't have to be a full-time real estate investor to really grasp this. The next part, so that's the other side of the equation you got to be on. So we control the supply of real estate. You need to invest in real hedge against inflation. And then controlling the supply, the demand is much bigger than the supply. So now you get to control your prices there and control the outcome of your investments there. And here's the third component of it, is the 30-year mortgage. So we just went at 40 basis points over the last seven days.

It was down a little bit, but now we're at 5.87%. So this is the other side of the equation of how you can win. Because a lot of people think that's high, and it's impacting the affordability of which it is. But when you understand how the economics work, there's very few times in history where your CPI index of 8.5% is higher than your mortgage rate of 5.8% of 0.87%. So the economy right now, despite the prices or the mortgage rates going up, the economy is paying you to borrow money. It's paying you.

That's a positive arbitrage because inflation destroys debt as well. It's an equal opportunity destroyer of money. So whether it's your money that you have in your bank account or it's the money that you borrowed from the bank, it's destroying the purchasing power of both of those. So if you're borrowing money at 5.8%, 0.87% to purchase an inflation hedged asset like real estate. And then you have that inflation, they're creating a negative interest rate for you. That's how you went. If you ignore this information and decide just to stay the course with your job and keep your money in your money, or 401K, keep your money in the stock market, you've got to lose.

And you get the choose. And whether it's right or wrong, you know, that's not up for debate and that's not even the point. It doesn't matter who's right or who's wrong. It's what we've got. And there's an expression, don't bite the Fed. You might have heard that before. And what that typically means, it's most of you don't realize it's a two-way street, that when the economy or the government is printing money and they are pumping that money

end of the economy, they're lowering, lowering interest rates, making it easy for us to spend money and invest in things. What that does is it causes assets, the appreciation or the price of assets to rise. And so that's putting yourself on the right side of the economy. You're going with, you're going along with the Fed and you're doing what the Fed is empowering you to do. Now, when the Fed stops, slows down or tightens the printing of money and starts raising the mortgage rates, Typically, that is a signal to be more conservative than your investments. But conservative based on the idea that you are investing for appreciation. But as real estate investors, we have appreciation.

It's really just the icing on the cake because we've got the cash flow, we've got the amortization, and we got the depreciation. So those are three other profits and the side of real estate that don't get considered when you're having that conversation about the printing money prices go up. You tighten the money, print the money and the prices come down. So when you are, you might lose out on the appreciation when the tightening of money comes. But as we can see, because of inflation, it's driving them interest up. And it's making it cheaper for you to borrow money to buy that inflation hedge asset.

That's putting on the right side of the economy. That is going with the Fed. That is how you put all of this, these dynamics in your favor. And if you ignore those, you've got to be hurting. People are already feeling it. The conversations that I'm having with sellers right now is pretty remarkable. The people who lose are the ones that play by the rules. If you're going to school to get that good job to work, work, and save, save,

the people that play by the rules, those are the ones that are going to lose. You've got to play the same game as the Fed. Because in every economy, there's always winners and there's always losers. And when we start going into recession and heaven forbid we went into, if we go into depression or we go into a stagnationary environment, even though that hurts most of the people, there are people that are winning. You just got to know how to play the game when the rules change. And it's buying inflation hedged, income producing assets, and using long-term fixed debt to purchase them. That puts you on the right side of everything. So this is really, really important.

It's probably a big shift, a big shift in my conversation here and my focus. And I've always talked about this for a very long time. But it's so much more than about just making money in real estate. It's about securing your financial future. And I tell this story all the time. A friend of mine, he went over to Russia right after the fall of the Soviet Union. And he actually went over to speak about real estate investing. And got to know a lot of the people there and he got to interact and mingle.

He came back with some of the most amazing stories. And one of the stories he brought back was when the fall of the Soviet Empire happened, it just destroyed the people. It destroyed the employees. It destroyed the people that played a safe that played by the rules. The people who won were the owners of essential businesses and the owners of real estate. Now, they didn't have it easy, but they came out okay on the other end. and am I suggesting that there's a parallel here that the United States is going to collapse?

Well, I guess it depends on what you talk to. I don't think so personally, not in our lifetime. But there's other people out there that certainly disagreed with me and say it's right around the corner. I don't know. And either way, we don't have control over it. We can only play the game and play by the rules that we're given. And if you want to win this game, you've got to walk what the Fed is doing and take the actions where their actions would benefit you.

And that's buying real estate. Right now we've got more people that we've got houses. We are not in a housing bubble. I don't care what anyone said. We are not a housing bubble. We might see that the prices pull back a little bit. But we are more in a people bubble than we are in a housing bubble. And I pointed out those Mazzlob's needs, right?

We need shelter. It's one of our most important things that we need. And if we cut our spending everywhere else, that's the one place we are not going to cut our spending. So as real estate investors, you got to own income property. People are going to need to live somewhere. And either they're going to buy the real estate or they're going to wreck the real estate. And if the market is going in a direction where it's unaffordable for them to buy,

then they are going to rent. You get to choose if you want to be the renter or the rentee. When they start tightening money and raising mortgage rates, Real estate kind of vision only play. A lot of people thought it was gold for a really long time. Gold is down, about 3.5% this year. Silver down 20%, like 19. something percent. It's our last and final hedge.

And then when they start throwing money around, then yeah, your assets are going to increase in the stock market to be a really good play. Not to mention real estate is the last real tax shelter that we all have is the average people. And you better get some because they are coming after us. They just hired 80,000 new IRS agents to come and collect their money and real estate being the last real tech shelter for the average person. You better get some of the big benefits, one of the big profit centers. A lot of people don't really pay much attention to it because it's not money coming into your pocket, but it's not money leading your pocket. And that can be just as valuable in that time right this.

Well, that's all I got for you there. I just want you guys to really pay attention. I want you to be smart about this. And even if you don't want to be a full-time real estate investor, you don't want to be a wholesale. You don't get a fix and flipper. Got to incorporate real estate somewhere into your financial plan. If you don't kind of a house, you need to get one. Go out and get an FHA loan, put 3% down.

You know, you can get up to 4 units. It didn't even cash flow that. If you're longing to live in one, do something, get planted somewhere. There's a new study came out just by the Federal Reserve actually saying that people that own a house are 40 times wealthier, that people that don't own one. One house, 40 times. Wealthier.

So what do you own two or three or four? I mean, most people can virtually eliminate their tax liability with just four or five houses. Most people can have themselves set for retirement with just 10 houses and just work those off and pay those off and you're done in 10, 20 years,

and that's the be a retirement plan there. Not to get rich quick, but it's get rich quicker. and in this time that we're looking at right now, it's get rich for certain with the greatest probability that we got out there. 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.

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