Epic Real Estate Investing - Housing Market Warning for Real Estate Investors (time to get out?) | 1197

Episode Date: April 26, 2022

Is the housing market going to crash? Many real estate investors, experts, and economists think we're headed in that direction, yet many think we're a long way off... if it does. Are we in a bubble, or will the boom continue? In the interest of your financial future, Matt suggests that it doesn't matter! Take a listen to this episode and you'll have been warned! BUT BEFORE THAT, as a BONUS, Matt will show you 5 different ways on how you can generate real estate leads for FREE. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. How to generate real estate leads for free. This is a common question, and it's a realistic one too, because real estate leads are everywhere, and it costs nothing to find them. You just have to know where to look, and I'm about to show you five different places. 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-E-I.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. Every real estate investor has gone through it at some point in their career. Learning how to get real estate leads when one's entrepreneurial ambition is larger than their marketing budget. In fact, one of the biggest mistakes investors make in their real estate lead generation efforts is to get discouraged from taking action because they believe solid real estate lead generation methods require massive capital to get off the ground. And this is a shame because learning how to get real estate leads doesn't require a massive thing. budget. Lack of access to capital can actually make you a more creative and prudent marketer and find better deals even, because most investors ain't looking in the free places. So if you're long on motivation but light on discretionary funds, I'll give you five real estate lead generation

ideas that require little or no financial investment at all. Oh, and by the way, if you're still looking to get that first deal under your belt, I put together a free training just for you to help you get that first deal done, and then how to earn $5,000 a month flipping content. track some properties working as little as one hour a day. And you can access it at matsfreetraining.com. All right. The first way for free leads, work with a real estate agent. You know, before you begin searching for property leads, you should consider joining forces with the real estate agent. A good agent can help you find investment properties in a number of ways. Overall, working with the real estate agent can save you a lot of time since they can do a bunch of the late work for you.

Now, finding a good, open-minded, you know, scratch my back and I'll scratch yours agent can be an invaluable team ever. So keep your eyes and ears open for one. And the basic exchange and value is you feed the agent, your lost leads, and list with them your retail properties. And the agent in return helps find deals for you on the multiple listing service and then gives you first crack up properties before they hit the multiple listing service. Now, most agents will be reluctant to participate until you prove yourself first. Doesn't seem fair, but that's the way it usually is. Additionally, most agents will be resistant to or are completely unaware of anything even remotely creative.

Many will actually think any creative offer that you propose is some sort of scam or flat out illegal. You can choose to try and educate them or just move on until you find someone that, you know, gets it. Finding an open-minded cooperative agent that's willing to reciprocate. fairly can be extremely frustrating. So for best results, you'll have to be the giver first and frequently give more than once before getting anything in return. So focus on what the agent cares about most.

Commission, fast commission, easy commission, consistent commission, now and future commission. And a lot of time can be saved by working with a few realtors in the beginning to find that one golden relationship because that relationship can be as good as gold. The work in establishing an equitable relationship with the realtor is very much worth. it. So be patient. Number two, networking. Another method for sourcing leads for real estate investors is by networking. As you have probably heard before, real estate, it's a people business. This means that the relationships that you develop over the course of your real estate career will have a huge impact on your success. And this begins with your friends, family, and colleagues. You'll never know

if there's someone in your network that can be a potential lead if you don't make it known what it is that you do and what you're looking for. Even if they aren't selling themselves, they might know someone who is looking to sell. Nevertheless, you should not just rely on your inner circle. Try to expand your real estate network as much as possible. Establish relationships with lenders and real estate attorneys and wholesalers and bankers and landlords and property managers and so on.

I mean, anyone that is directly or indirectly related to potentially distressed sellers. Attend real estate meetings and seminars. You could also hold some meetings yourself. And that happens to be one of my favorite ways. You see, when Mercedes and I first started working together, we would promote events on meetup.com around how to navigate the foreclosure process while preserving your credit score.

And guess who came to our meetings? People in or about to be in foreclosure, and they wanted to preserve their credit score. So we purchased a bunch of discounted real estate this way. Now, there would be nice where only one or two people showed up, but that's all we needed. One or two deals per meeting wasn't too, with a solid real estate network, you have the potential of generating countless real estate leads

and ultimately deals. So to motivate people to bring you leads, consider offering a bonus to anyone that does. However you decide to network, it's vitally important you spread your message to as many people as you can that you are a real estate investor. And I don't know what type of property, what type of deals you're actually looking for. And if they ever think about selling their home or if they come across such a deal and they don't want to go through the extended home selling process or that owner doesn't, you might be able to help them out by buying theirs. You want to get in the habit of letting as many people you can know, without badgering them, of course,

that you're the right person to contact if somebody needs to sell a property quickly. Now, this strategy has two benefits. You'll get your name and business card out there to a bunch of potential real estate leads, the original social media, if there ever was on, and you'll also gain valuable experience in learning the subtle art of self-promotion, and you'll build confidence in your abilities as an investor. Now, the third way is driving for dollars. This real estate investing lead generation technique involves driving through neighborhoods looking

for distressed properties. It's an excellent way to find motivated seller leads in your local market. And driving for dollars, this is a real estate phrase that refers to the practice of driving select neighborhoods to find vacant or distressed homes that you can purchase. Not only can it be an effective method for finding real estate leads, but it can also give you a hands-on education about a particular local market. There's simply no substitute for having boots on the ground in a given. neighborhood and understanding that neighborhood. That said, driving for dollars is not by any

means easy. It requires a significant amount of time and energy, not to mention wear and tear on your automobile. But no one said you could walk your neighborhood or ride your bike or skateboard even. Either way, if you have a business structure set up, such as an LLC, you can write these expenses off. And to set up an LLC the easy way, go to free entity.com. Now, while driving for dollars, keep an eye on the physical state of properties. Generally, you should look for properties that are in a state of disrepair. This shows that the property has been neglected by the owner, and there's a good chance the property owner is unable or unwilling to maintain it and may be motivated to sell it. Some signs of a distressed property to look for include vacancies, peeling paint, an overgrown

yard, drooping gutters, broken windows, broken fences, boarded windows, and piles of newspapers on the porch. And when you see something that fits that description, write down the addresses of the distressed properties that you find and check public records for information about the owners so you can contact them. And there's a fantastic app that you can use that really streamlines this process by looking up the owners and information for you right then and there when you're seeing the property. You can try it for free for seven days at epic deal machine.com. All right, number four, use social media. Social media is a great tool for real estate investor marketing. With platforms like Facebook and Twitter and Instagram, TikTok, and LinkedIn, you can reach a huge

number of people. By consistently posting informative posts on real estate, you can generate many followers, and it's these followers that can be a good source of leads for your real estate. Moreover, you could pay for social media ads to reach a more targeted audience and more of them. The last marketing method is one of my favorites. It's where I found my first several deals. And just recently, a private RIA's client of mine, Ivy Morales, found three deals in her first two months after leaving our investor summit. All right. The fifth way of generating free real estate leads is Craigslist. Even if you're new to real estate investing, you'll no doubt have heard about using Craigslist

as a method for acquiring real estate leads. Part classified ad, part local message board, Craigslist can represent a huge marketing asset to an investor just starting out. The trick is to make sure you don't spin your wheels with real estate lead generation efforts on Craigslist and that your time spent posting ads brings a positive return on investment, a return on your time. It's really easy to waste. time there. So here are a couple of quick tips when it comes to learning how to get real estate

leads on Craigslist. First is variety, volume, and consistency. Those are key. Always be mixing up your headlines. You have the body text and images to avoid Craigslist spam algorithm the best you can. It's not a perfect system. It's just a game to play. And then you'll have to post a lot as well. It's a volume game. Think like you're creating a brand on Craigslist. It's time consuming at first, but becomes almost effortless after your first 20 or 30 posts. Now, like any lead generation strategy or tactic, consistency is vital for your initial and long-term results. This one can be slow going in the beginning,

but it will snowball to create a consistent flow of leads. With that said, if you can't commit to consistent postings for 90 days, don't even begin. So the section is to post your ads. You can post your ads on real estate services, real estate for sale, real estate wanted, wants it by owner and general community. Thanks for sitting tight while we pay our light bill.

We'll be back right after this. Hit pause on whatever you're listening to and hit play on your next adventure. This fall get double points on every qualified stay. Life's the trip. Make the most of it at Best Western. Visit bestwestern.com for complete terms and conditions. Ever hear someone say, I have too much money?

Me neither. Let's get you some more. Back to the show. Get out of real estate now? Is that what they're telling you? I mean, I see the videos here. I see them everywhere. Bubble this, crash that, collapse here.

It's the end over there. You know, given what we're all witnessing with the economy, the politics, the foreign conflicts, you know, getting out of real estate doesn't seem like unreasonable misguided advice. I mean, I don't even have to mention that the market has. has been on a steady incline for a really long time. Even excluding the last couple of years of ripping growth, the market has experienced. I mean, we're well overdue for a series correction.

I mean, the whole housing market is coming down any second. Get out while you can. You know, if that's what you believe, fine. But then what? Hold on to the cash in a safe somewhere, tucking under the mattress, put it in your savings account, you know, with 8.5% inflation, those are guaranteed. losing strategies. And unless you're pulling 10% in the stock market, that's not a much better option, especially if we're going to be heading into a recession. So maybe you shouldn't get out

out of your real estate. Maybe you should buy more. You know, there actually might not be a better time in history to do so. Crazy talk, right? I mean, I can only imagine what you might be thinking, but stay with me. I'll show you what I mean. And then you can make up your own mind on how you want to proceed forward. Despite all of the economic boom and gloom, this just might be the best time in history to buy real estate. Why? Well, because it's literally the only shot the average person has got in creating any sort of wealth. It's an appreciating income producing asset that fulfills a basic human need. And the emphasis being on the word need, you know, real estate, it's produced more wealth for more people than anything else on the planet. And most,

are starting to come around to that realization. And this is hardly uncommon knowledge anymore. But why not at least wait for a better deal, right? I mean, one of real estate's basic tenets is to buy low and sell high. It's going to be on sale soon when the market crashes. This is a common sentiment. Well, I'm going to suggest right now that it's as good as it's going to get. And it's here where many people will disagree with.

And for all of those that do, rarely do I find that they have a solid reason to support their feelings as to why they think the market will crash. I mean, they point to things like, hey, it happened before, it's going to happen again. The housing market, there always moves in cycles. We're overdue for a crash. Or prices are too high. They can't go up forever.

And then more recently, there's inflation. You know, this thing is going to kill the economy, and everyone's going to be hurting. Interest rates, they're rising. And then where are people going to get the money to keep on supporting these rising prices? You know, what goes up must come down. Or you're an overreact.

really optimistic idiot, Matt. That one's my favorite. But those are the types of things I hear from my deniers all the time. And it's not that what they say isn't true, it's that they are incomplete truths. The naysayers, they reference only one side of the story. You've got to look at the complete picture, not just the parts that confirm your feelings. You know, the truth is, we've got more people than houses. Households are flush with cash, and more and more people are becoming credit worthy. And there's a ton of pent-up demand waiting on the sidelines. Not to mention that there are more than enough investors ready to buy that can support prices for a very long time to come.

Further, the wealthy, not investors, are buying second and third homes. They're buying a vacation home. I mean, even the non-real estate investors are buying up property for short-term rental purposes. And they're all probably going to survive and thrive because we've got more people than houses. You see, whether those people buy houses or they rent them, they need a place to live. There is no housing bubble right now. We need more houses than people for that to be true. But we have the opposite.

People they hate me for saying it and think I'm some sort of overly optimistic coop for saying that we're not going to crash. They think I have some hidden agenda to push prices up. I'm not a realtor. I don't care if you buy houses. I actually prefer that you sell them. That's when my personal gains would come from. by buying what you sell. But I'm telling you to do the opposite. Just because the housing market has crashed before doesn't mean it has to crashing yet. I mean, what goes up must come down

is what people say. I constantly hear and see it in the comments. And it sounds good. I mean, it might even be true more times than not. But it's not an immutable truth. Simply put, we've got more people walking this earth right now than we've got houses to shelter them. that's what's up. Unlike market cycles before when demand was artificial, say due to booming economic times or low interest rates or lack of days ago lending practices, this time around the demand is real. The people are real. They aren't artificial. And on the other side of that is that the supply is low, really low. And it's not being replenished fast enough. And what is being replenished are not your average buyer type homes. Because you see, with the rising costs of lumber, copper, cement,

and really all building materials to varying degrees, and don't forget about wage inflation, in order for builders to make a profit, they have to build bigger, nicer homes. Materials and labor are just too expensive for it to be any other way. So I'm talking about upper middle class homes and luxury homes, homes that are out of the price range of your first time and most second time homebuyers, the balance of supply and demand is so lopside that it's impossible for the cost of a house to fall in a free market. Now, with all of that said, we do have inflation and interest rates to consider, something I've always mentioned being the big variables to housing prices. Now, these two things could impact the actual prices of real estate and substantially.

You see, the prices may pull back a bit. They may even fall. They may even fall to a point that could be classified as a crash to a point where you could say, see, Matt, I told you so, you totally got wrong. The market crashed after all. There very well may be a scenario for that where you think I've got egg on my face. But consider it won't make a difference to your ability to afford real estate. Here's what I mean. Let's say you qualified for a $2,000 per month payment. As of the reporting of this, you qualify for approximately a $300,000 loan to where you could purchase a $400,000-ish house. A 2% increase in interest rates would raise your monthly payment to $2,400, to where you now don't qualify for that house. And the loan amount you do qualify for is pushed down to

$250,000, approximately a $325,000-ish house. A smaller house, same payment. Now, let's say, though, that The seller, they're going to work with you, and they reduce the price so you could buy it. So sure, you saved $75,000 on the purchase, but your payment didn't change. The affordability didn't change. Despite the $75,000 drop in price, it's not any easier for you to afford. The price of the house may be cheaper, but it's not cheaper for you to buy. And until inflation is under control, if it even can get there, you're stretched financially and other necessary expenses in your life.

So affording that house will not get any easier. And it's all of that combined that has me asking you just to consider that this may be the best time ever to buy real estate. It's as cheap from an affordability perspective. And that's all that really matters as it's going to get. Following into real estate is looking more and more like a winning strategy. I actually endorsed this approach more than seven months ago. And so far, I'm not wrong. I mean, don't you wish you bought a house seven months ago when I first said,

FOMO your way into real estate? Well, what are you going to say seven more months from now? Or much more importantly, seven years from now. It remains to be seen. And we'll be able to refer back to this when that time passes and we'll indeed take a look. But let's look at the bigger picture as to five reasons why you need to buy real estate and sooner rather than later. First, the average property order is 40 times wealthier, 40 times wealthier than the average

renter. Second, per the Department of Health and Union Services, 72% of the wealthy 1% created their wealth or preserve it in real estate. You know, a good friend of mine used to be a financial planner, and he shared with me once. Of all the families, he sat down at the kitchen table to plan their financial future. He said, the only people that ever stood a chance were those that own real estate. Needless to say, he's a full-time real estate investor now. Third, real estate, it's the fastest path to financial freedom for the average person. And it's like this. You see, most people spend a lifetime of sacrifice to save their money with the intent of creating a mountain of money so high that it eventually, via interest and dividends,

produces a monthly income stream to live on. Real estate investors, they reverse this equation and focus on the stream first. then they let the stream create the mountain. This is just a simple shift in priorities to attain the same outcome, yet it creates an entirely different timeline in its achievement. For most that take the traditional route and pursue the mountain first, it's a 40-year plan if they actually make it. You know, per the Department of Health and Human Services,

95% don't. 95% still need their church, family, or state to survive. The real estate investor focus can be a four-year plan for most people. It was just under four years for me. And for my private RIA's clients, Parker, Josh, Corey, McKinsey, they did it in half the time that I did. You see, real estate is not get rich quick. Just get rich a whole lot quicker. Fourth, it's a hedge against inflation, especially when you leverage debt to pay for.

You see, your tenants, they're going to be paying you more dollars in the future to pay back the dollars that you borrowed today. Oh, and then there's the appreciation. You know, housing and inflation, they've risen over the years and almost perfect synchronization, almost perfect, with real estate doing just a little bit better than inflation. Fifth, and this one's important, real estate, it's the best way for the average person to create wealth during good times. It's the only way to save yourself in the worst of times. You see, it'll never go to zero. So why don't more people invest in real estate debt? Well, they don't know how.

They don't have the support. They don't have the money. They don't have the time. All just different ways of saying that they're scared and they just don't know where to start. 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 for us, we got the cash flow. Okay, only 10 more presents to wrap.

You're almost at the finish line. But first? There, the last one. Enjoy a Coca-Cola for a pause that refreshes. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit C-desweet Radio. com.