Epic Real Estate Investing - How Low are Housing Prices Going to Fall in Your Market? | 1222

Episode Date: July 28, 2022

Everybody is talking about the crashing market. Are the rumors true and what is happening right now? Matt will walk you through the data and show you individual markets that are predicted to crash. Stay tuned and hear much more about this topic! BUT BEFORE THAT, Matt shows you how to owner-finance real estate and teaches you how to turn an unmotivated seller into a motivated one. Are you ready? Let’s go! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. How to owner finance real estate is a strategy that lives next to that unicorn in the woods for many investors. But what I continue to find is that they're not that hard to find as people simply just don't know how to put deals like this together when they do find them. They don't recognize them. And after more than 100 owner finance deals under my belt, I'm going to show you how to do it. 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 reiase.com.

Here's Matt. All right, so by the time we're done, you'll know everything that you need to know about buying real estate using owner financing, and at the end, I'm going to give you my own owner finance contract that I and my students use to put these types of deals together. All right, so let's get started. If you're up for your first or next investment property,

at some point, you'll have to get your funds together to complete the purchase, and most people will go to the bank. and their approval will be dependent on their credit worthiness, their financial stability, and sometimes even their experience investing in real estate. And if you get approved, you then have to deal with the underwriting process, the appraisal, inspections, application fees, admin fees, document fees. If you've dealt with a bank lately, you know that they kill you with the fees. And they're going to want a 20 to 25% down payment.

And you never know what other hoops that you're going to have to jump through. But there's another way to buy investment property almost without having to deal with any of this. and that's through owner financing. You see, this is a transaction in which a property seller finances the purchase directly with the person or entity buying it, either in whole or in part. And this type of arrangement can be advantageous for both buyers and sellers because it eliminates the time, guidelines, and costs associated with banks most of the time. Most people understand what owner financing is, but many just don't understand how to do it.

So I'm going to walk you through a recent deal of mine because there's a secret to pulling this off and I'm going to let you end on it. But the first thing you're going to need is a motivated seller that owns their property free and clear. And that right there oftentimes stops people from even trying because they don't realize that more than one third of all homes in the United States are owned free and clear. And stick with me until the end and I'll show you how to get a free list of motivated sellers of free and clear properties right there in your market.

I mean, there are more of them than people even realize. And it's a really easy list to get. You'll be totally surprised. So the secret to getting a seller to agree to owner financing, It's all in the presentation because most investors will make three big mistakes in their presentation that prevents them from getting these types of deals done. The first one is they just don't ask for it. Either they're afraid to or they don't know how to put the deal together or they don't know how they're going to profit from it if the seller should say yes. Now, the second mistake is that they ask for it way too soon because most sellers don't even know what owner financing is.

And if they do, they're mostly still very focused on getting their price and they want the cash or they think they do. and more on that in just a second. Now, the third mistake, the buyer confuses the seller because the buyer doesn't explain it well. Typically, it's because the buyer will use too much jargon, or they'll lose focus on the benefits to the seller, and the seller just kind of zones out. So if you can avoid those three mistakes, you're way ahead of the game. And so I'll now share with you my secret of how to pull this all together so you can get more sellers to agree to owner financing with you.

So, last week, I visited a lady who inherited a free and clear property. And one of my VAs found her cold calling this list and I'll show you how to get for your market in just a minute. The property, it belonged to her mom and she wants to sell it. And one of the questions I always ask is, if I were to buy it, would I have to pay off any mortgages, liens, or judgments for you? I asked that way because I've learned I get better answers from sellers if I offer to pay off their mortgage rather than asking, do you have a mortgage or how much do you owe on your house? It's subtle, but it's been a difference maker. Anyway, she inherited the property free and clear. So I did some quick and dirty math and had the after repair value right around $325,000.

And after subtracting the repairs that she shared with me and then carving out a small little profit for myself, I figured that I needed to get the property in the ballpark of $225,000 to $250,000. Now, after viewing the property, it was pretty much as she explained it over the phone. And when I gave her my number of $225,000, she wasn't too excited about it. and she asked for $275,000. So my reply was this. I was like, hmm, you know, I'm not sure considering the repairs needed that the market will support that.

So let me think about it. But on a side note, you know, I've got a chunk of money sitting on the side and I've been wondering where to put it. May I ask, what do you plan on doing with your proceeds from the sale? And she said she was going to put it in a dividend stock to generate some monthly income from it. And she was a little excited about the idea of it, too. And so I asked her, how much of a month?

the dividend does an amount like that produce? And she said, conservatively, my financial advisor said I could expect about $800 a month. And I told her, the reason I'm asking is because I might be able to do better than that for you. Here's what I mean. You see, the price that you're asking for this house, it's a little bit above my risk tolerance right now due to supply costs and the labor shortage at the moment. But if the market allowed me to give you the $275,000, I could give you some money now and the rest later. I mean, so how much of that do you need right now? And so how much of that do you need right now. And she said, I could use $10,000 right now or so. And I asked, great. I mean, that would be more than what your dividend in stock is going to pay. So she thought about it for a

moment. And then she said, she would do it. Now, this was about a 45-minute conversation, lots of small talk and stuff in between. But that's the gist of how this meeting went. And then I was able to work out a six-month moratorium on the first monthly payment to allow me to get my rehab work done. But the point I want you to get here is, first, I went for the discounted price because that's what sellers understand. And most of the time, it's the most important thing to them, getting a good price. The second thing was, when we didn't agree on the price, I dug a little deeper into her motivation for selling. And this was really important because the deal isn't in the property. It's in the seller's motivation to sell the property. She had a need for monthly income, but didn't want to be

a landlord. The owner financing idea solved her need, and I made sure it was a little bit better than what she was going to do with it. Third, I asked in plain and simple English. and never use the words owner financing or any other jargon. I didn't do any of that, not even once. By no means is saying owner financing or seller financing a deal breaker, but it's typically easier to understand and less intimidating for sellers by offering to give them some money now and the rest later. I mean, a fifth grader would understand that, and that's kind of what you want.

So the plan for this property is to fix it up to rent-ready condition, as opposed to the retail-ready condition I originally budgeted for, and then I'm just going to place a tenant in it. and the market rent for that property is $2,500. Then after making those $900 payments to the seller, principal-only payments, if you didn't catch that, my net cash flow should be right around $600 per month. Now, I am coming in with the $10,000 plus the closing cost to close,

and I've budgeted $20,000 for the rehab, and that's going to put this deal right around a 22% cash-on-cash return. Now, there's not a ton of equity in it, and that's okay, but my $900-dollar principal-only payment will create that for me and relatively quickly, and so I'll likely refinance all of that cash out in two to three years. Now, from here, you could hire an attorney to put the finance contract together for you, but it's not necessary. I just give my title officer my note with some instructions, and then she just does it for me. If you like a copy of the financing contract that I used for this deal,

you can grab it for free at epic promissory note.com. And what you'll need to pull off these types of owner finance deals for yourself is a list of motivated sellers who own their properties free and clear. And you can get a free one for your market by going to Epic PropStream.com. Except their free seven-day access, and then just download your list. It's that easy. If you like the service, after seven days, you can pay their very reasonable subscription fee. Or if you want to cancel, just cancel. Either way, you've got your free list of free and clear properties.

We'll be back with more right after this. Boarding from flight 246 to Toronto is delayed 50 minutes. Oh, 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! Sporting 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 186653310 or visitcomnetonterio.ca. Hope is not a financial strategy. Let's get back to work. Hey, Rockstar, I got another live call that I want to share with you today. It was a seller finance deal that I put together, I don't know, four or five days ago.

And I was actually in the car when it happened. And so when we reached an agreement with the seller, and so I didn't have the ability to record at the time. But I do want to share with you the initial call because this seller was relatively, oh, he's very unmotivated initially. And so I just exercised and deployed a few of the normal sales techniques that I always do. and so I wanted to share that with you. All right.

So enjoy it, and I'll see you at the end. Oh. Yes, be it. It's math. And I think you talked to my assistant Jen earlier about possibly selling your house on. Yeah. Okay. Cool.

She had to run out. She just left me some notes here. And I can barely read her writing here. And I just wanted to run through some things real quickly to see if this would be a good fit for us. Do you have a few nights? okay cool one thing I wasn't able to discern was is this as a house or is this a duplex

she never asked oh okay I was just looking up the address online and it was hard for me to tell because it came up as a unit number and then it had a but it also came up about this because I got to call two calls from you guys before how about you guys if you guys did come on me can make an appointment for you guys come out of we can walk through

it from there. God, I got it, I got it. I'm in Las Vegas, actually, and I have a partner on the ground there. That's one to, like, see if this was something, you know, I don't want to waste your time and come out and not be a good fit for us. Well, you're, you know, either your partner or whoever you have

that can come out. Mm-hmm. Because we spoke three times. You guys could just come out. Just give me a call ahead of time. And we can just walk through everything and... Okay. Maybe I've got a...

All right. Maybe you're confusing us. someone else. I mean, we just called you for the first time a few hours ago. No, because the same people call and they said it's like basically like the same as that question. Well, if someone else might be looking at it too, and it's probably because the records that are shared publicly are a little confusing. So that's why I just confirm me. That's all. Um, so yeah, I mean, I want to come out and look at it and I certainly will, but I don't want to waste your time. Are you living in the property right now or is it vacant?

It's vacant. It's vacant. Okay. And then the general condition of the house, she said it was pretty good from one to ten. Okay, perfect. And then you just recently started thinking about selling it so this hasn't been something that's on your mind, right? Right.

Okay. Perfect. And what's the reason that you actually are thinking about selling it? I mean, there's no particular reason if the price is. if the price is right. I'm willing to come off of it. If it's not then, I'm cool with how it is now. Okay, cool.

Do you have an idea of, I'll check with the current market conditions, but do you have an idea what properties like yours are selling for? Yes, it's selling between the 75 and going that area, plus the area, probably like around the 75, 90, right? Okay. very good and then what's the lowest price that you might consider the lowest price I'm from 180 okay and that's under the right conditions that wouldn't be

negotiable at all no I think I I thought I'm thinking about putting the patio on the back so if I get some more stuff done so within before you guys decide to you want to purchase it if anything I want a little bit more Okay. I understand this will be, like, you know, coming out of my pockets, like, more additions to the problem. Got it. All right. So this is something you'd actually consider fixing it and selling for a higher price.

Yeah. Okay, cool. Because that's probably, I mean, that's what we're going to do as well. So, I mean, if that's what you have in the plans, then that would probably be probably your best option. Have you considered calling a realtor? Not yet because, you know, it's a family, a family house. Got it. If anything, you know, one of us will move in it.

So, I mean, there's no big one's selling it. Like I said, I'll keep it with, you know, with me. But if the number's right, and why not? Okay, perfect. I mean, I could probably, based on what I'm seeing right now, I could probably get pretty close. Maybe, I mean, I could hit your number exactly if you would be willing to take some money now and the rest later.

Would that be something to be willing to do? If you made payments over time and gave you a down payment? Uh, yeah, that sounds good. It depends on, you know, without paying and how much we'll through a month later, no, within the group, I was through there, throughout a year, so. Okay, super. So if we did something like that, how much would you need right now, right away?

Uh, 30. Okay. Okay. We get a 30 down. All right. Okay. The lowest I'll do, 20 down. But I really want.

Okay, perfect. And then the question I had here, I don't know if she got this one. Do you have an idea if we were to use it as a rental, what it would rent for? No, I'm not sure. Like I said, I haven't put too much bought into the whole, you know, selling all this, you know.

All right, got it, right. So, all right. So let me, because kind of what I would make, payments on to you would be kind of determined by what we could actually rent it for. So I don't think the down payment is out of the question and that doesn't sound too extraordinary. That's something I could probably make happen for you. But it would be the payment part.

So let me do a little bit of research with regard to the market. Around the area, people are paying for those, they're paying like around a thousand. Okay. So, you know, and that's just all for this, just the conversations like this. Sure. don't have just around the, you know, from the one board. Okay. That, that's actually sounds probably like it's accurate.

So it is a household. It's not a duplex, right? It's up and down. It's an up and down. So there are two units? Yep. Got it. And so when you say 1,000, would that be like 500 above,

500 below, or 1,000 for each? The down. Mm-hmm. So I'll say probably the diet, probably you probably can get like around like 8. Yeah. But how the rate is. Okay. Perfect.

But everything's, everything is no. But like I said, the cabbage is not really, it's nothing big bad. Spend those things put in. It's like stainless. If you want no cabbage, that's okay. All right, super. Let me just do a little bit more research and confirm some of this stuff so I can give you a real offer that I'd be able to back up.

Okay. And then we can go from there. If we came in on, you know, we have the down payment right, the payments felt right to you. Would this be a later or sooner thing you'd be ready to make happen? Like I said, if somebody's writing everything, you get in line, shit, you can come down here tomorrow. Okay.

So, I mean, no, there's no, you know, if later, then that's fine to have it sooner. I'm cool with that too. All right, cool. Yeah, so let me go in it and just, I'll give my partner there in the area of a call, and then I'll look at the market a little bit more. when's it a good time for me to call you back when you could be in front of your computer? You could just be called any time during the week. Okay, perfect.

And then Monday through Friday. It was a pleasure. I'm glad we got that straightened out, and I'll be in touch soon. All right. Thanks, buddy. Bye. Thanks for sitting tight while we pay our light bill. We'll be back right after this.

Caddo Cephora of FACC that I've been to deniches that I'm energize over? Mm, it's the ensemble. The format standard and mini regrouped, what's all right? And the embellage, too beau,

who is practically pre to donate? And I know that I'd but I'll have these Summer Fridays and Rare Beauty by Selena Gomez. I'm, I'm just the most ensemble, the Cado of the Feds CIFRA, the Fourses, Rare Beauty, Way, Cifora Collection

and other part of Vite. Procurre you, Seferra and Mini, regrouped for a major quality of price, on link on Cepora. Or magazine. I have too much money. Me neither.

Let's get you some more. Back to the show. Today we're going to talk about the crashing market that everyone is talking about. Headlines keep coming up and the YouTube notifications come up and the podcast notifications and new releases coming up. Everyone's talking about the crashing market and this is the absolute ed. So that's what we're going to talk about. And we're going to look at the data and you get to so that you can see it in a way where

you can make up your own mind. We're going to go over the individual markets that are predicted to crash, everyone's predicting that the price is going to fall. But first, I want to go through just kind of what Joe's number is going to get a little snapshot nationally. That will go regionally, okay, see if your market's on there. But when you're looking at the market or anything, really, in our economy, you're always looking to see at supply and demand.

We've talked about that a lot here, right? The supply is really, really low. We all know that. And the demand is way, way up, meaning that there's more people than we got houses. Now, the interest rates are kind of crushing the demand, but that doesn't crush the need for people that want to have a roof over their head. So always keep that in mind. So if we see some sort of correction, we see some sort of crash based on the actual demographics, it can't last. People are going to have to put a roof over it.

Something will have to change. Right. So, you know, back from 2007, 2008, that crash was very much based on speculation. People were buying houses, anticipating them to go up and rise and everyone just bought too many. And then it crashed because we didn't have enough people to live in the houses. That's completely reversed this time around. So these houses that are being consumed are not necessarily being consumed on speculation. They're being consumed because people need them to live in whether they're buying them or if they're buying them and renting them out,

they still got plenty of renters to live in them. So that's a big difference between now and two. 2000 crash. But if we look at the active listening account, because this is the big story, right, the inventory. So listings that are on the market, they kind of go through a seasonal pattern, a seasonal trend. You can see these top three lines. This kind of represents a normal market. So this was 2017, 2018, 2019. You kind of see there's a nice little flow and basically all three of those years were essentially the same. Then this line right here in the middle that's on this decline. this is the decline of 2020, our year of the pandemic, right?

So inventory dropped considerably. And a lot of people think it was a pandemic induced drop. But I don't think it was. I think it was something very different at work. But here we are. This was 2021, this green line. And here we are in 2022 is this bottom yellow line. So you can see we hit the really bottom of inventory, right off February, maybe March.

Some people are saying March. But based on this graph right here, we're about February. But now we're rising up. And everyone's talking about this huge surge in inventory, right? Inventory is just houses are coming on the market. And there's all this inventory. And now that's going to cause the housing pop. Well, really, right now, all we see is it's just resuming the trend.

But still, we're historically level. We're significantly lower than our normal markets in 2017, than 19. We could essentially come up quite a bit and not really cause any sort of alarm based on a normal housing market. So it's kind of keep that in mind. And then July, I don't have that graph with me, but July, it has gone up again. So this yellow line is continuing to rise, but at a slower rate. So we're seeing already this curve right here is happening for July. So then the pending listing count.

So pending means properties that are under contract. contract where people have made their offer, they got their offer accepted and they're waiting to close. So we can see quite the reversal here. We can see 2017, 18, 19 are these numbers down here at the bottom. So of all these properties here that were for sale, it was a smaller number that were actually under contract. And so as we see here, we're seeing that the housing contracts are being canceled. We're entering that a lot. And that's kind of where this decline right here is for 2022.

But we've got more housing contracts. is under contract that we did here, but we got it with much less inventory. So the demand is still really strong according to these charts here. Newly listed homes. So newly listed homes are on the rise. So you can see this is up here and we're approaching kind of a normal level based on the monthly newly listings, but we're already starting to see it edge over. And I think there's one more here.

This was interesting. So we're thinking that the market is slowing down and it's, you know, it's about to pop. But here's our average days on market, how long it takes for a house to actually sell from the time they put it on the market to the time that it goes into contract. It's going to contract or does it go in when it actually closes? Let's see. I think it's what it closes. It doesn't matter whether it's 30 days longer, 30 days short, it's not going to matter as far as the point I'm making here. But we can see houses are still on the market for only 30 days.

days and they're gone. Although the sales activity may be slowing still historically low days on market. So the market is really still robust. So I wanted to show you that to kind of give you a glimpse of what's actually happening. Then the median list price. This isn't kind of normal because it's going to get higher each year as appreciation happens. So this is the listing price. And so let's talk about that. So if we go over here to home prices, where are they actually going to particular to fall? We've seen what they've been doing. That's not really news. We see that. rising. But it's good to look this, to get this like a big picture view because if we hear like, hey, the inventory serves 18% but that sounds crazy, but it's 18% of what? It's 18% of a really low number. So we want to keep all of this stuff into perspective. So whole prices have begun falling. Here are the cities that they're down the most. And one thing that this article points out, this is from our realtor.com. This is not a repeat of the great recession when a housing bubble popped and prices. plummet across the country. These are mostly smaller decreases that don't pretend another crash. So if you restart reading these articles and you get into the nitty gritty, you start saying that,

oh, the data is not that bad. I try to lure you in with the headlines, and then you start reading a little bit deeper and it tells a little bit of a different story. But here are the 10 markets where they say work home prices are falling the most. Now, it's key to have the distinction of work home prices are falling the most. Which price? It's not the sales price that's fallen. It's the listing price that's fall. So what that means is, you know, a seller thinks, oh, that guy next to me, his house sold for $500,000, then I'm going to put mine on the market for $550. And then nobody comes to look at his house now, like in the current market. So we have to lower it to $5.40, $5.30, $5.20. And then he sells it for $5.10. So he might have had a significant.

or a big number of price reductions, but he still sold it for more than his neighbor did. So keep that distinction. There's what the seller's expectations are. There's what the buyers are actually validating as far as price goes. So we've got Toledo, Rochester, New York, Detroit, Pittsburgh, Springfield, Tulsa, Los Angeles, Memphis, Chicago, and Richmond, Virginia. So are where sellers are becoming more realistic and dropping prices.

Okay, so Toledo. And you can see right here, median, listing price. The listing price, not a sales price. So in Toledo, they dropped at 18.7%. Rochester, New York, they dropped at 17. Detroit, 15. Pittsburgh, they dropped at 13%.

So these are very ambitious sellers in these markets. And now they're becoming to grips with reality. Springfield, Massachusetts, negative 5.8%. Tulsa, Oklahoma, negative 5. Los Angeles, down 5%. Memphis down 4.6, 3.7. in Richmond. And this is what I thought was interesting. Of these top 10 markets, once you get to the 10th one, it's only a 3% drop in the listing price. That's a little bit.

It's just 3%. Okay. So there's that, there's their version. We've got two other three other versions. None of us have a crystal ball. So we've got a little bit of a few different resources, right, a different source formation. So here, housing prices are expected to drop in these cities. We'll see if yours is that, right? If this is one of your markets. And they talk about overvalued markets and it's very, that could be a very broad definition. So the housing market is overvalued. That's what it means its home prices are higher than expected compared to average local

incomes. Okay. So it's based that it means the people that work there can't afford those houses, but people are still buying it. And we see that in a lot of our luxury areas. I went on a trip last summer to Jacksonville, Wyoming with my son. And half the restaurants were closed. and I had asked the guy at the hotel clerk,

you know, what, how about the restaurants were close? I was actually thinking it was the pandemic and people were still kind of reeling over COVID and everything. He says, no, the service people that work at the restaurants, they can't afford to live there. So you could look at Jackson, O Wyoming as an overvalued area, but are people really going to sell?

Do you think there's going to be a crash? All the people that are living there, they can afford it, and they bought it, and they don't plan on moving. That's their dream home they're staying. And you'll see some of that. in these other areas like Boise, Idaho. That was another big place. So 73% overpriced or overvalued.

Sherman did as in Texas, Muskegon, Michigan, Morrison, Tennessee. So you can see all of these areas are overvalued, but it just means the housing price compared to the local income. So let's look at this one here. This is from Fortune. This is a really a little bit better of a depiction of what's going on, a visual, so to speak. All right. So the headline here is housing markets labeled high risk of home price drop just spiked 73%. Find your local market using this interactive map. That sounds crazy.

The home price drop just spiked. The risk of a home price drop just spiked 73%. Oh my God, the sky is falling, right? All right. So if you dig deeper into it, here's what we see. So CoreLogic, they're a data resource center. They do a lot of research. They predicts U.S. home prices are poised to rise.

another 5.9%. So nationally, there's going to rise still, 5.9%. But not every housing market will be so lucky. Fortune reached out to a budget to see if it would provide us. It's a cement on the nation's largest regional housing markets. Among the 392 regional housing markets, it looked at CoreLogic. 35 markets had a greater than 50% chance of seeing local home prices decline over the next 12 months. Last month, only 26 markets.

That's a 73% jump. So it's just a 73% jump in their prediction, right? All right. So if you look at these areas, very highest categorized is over a 70% chance of a price dip. So if you see the red here, that means very likely of a price dip. And if you look at the blue, very low chance. And then in the middle there, the pinks and the light blues. But you can see most of the country, most of the country is this very, very low or light blue.

as far as pricing, predicting the pricing, price dropping. And then if you go here, it's basically right here along the coast, is where you're actually going to see a very high chance. That just says it's a high chance of a price. It doesn't say it actually happened. Next, let's go over Bloomberg. US new home sales fall more than forecast a two-year low. So purchases dropped 8.1% in June to annualize 50,000 rate.

These are new homes. These are not people deciding to sell their home and putting their existing home on the market. So these are the sales of the new homes. So sales of new U.S. homes fell for the fifth time this year in June to a more than two-year low as a mix of high prices and rising mortgage rates for prospective buyers. So purchases, they decreased 8.1 percent. And they continued to slow. There was one piece of daddy here I wanted to get for you. So the new homes,

It was, there's nine months of inventory of homes that are built or are in the process of being built. But the new home builders have actually stopped building new homes. So there's not going to be this flood of new houses hitting the market. So we see the sales activity dropping, right? The number of sales are decreasing. We're hearing about in the headlines that prices are dropping. But those are the listing prices. If we look at the late report, so we can.

see right here so there's been $5.12 million or million homes sold so the month over month that's a decrease of 5.4 percent so the sales activity dropped 5.4 percent year over year that's a 14.2 2 percent drop that's a big deal but if you look here the median sales price is 416,000 dollars is actually up 13 percent so yeah the number of homes being sold is falling right it's decreasing but the actual value or the price of the house that are being sold is rising. So what does that mean to us as real estate investors? Well, first part, when we look at the inventory, this is how I'm determining it's my own. I look at the inventory and I'm like, okay, we're still really, really low. I can still buy rentals. As long as I can get them to cash flow, I'm still going to be fine because

the inventory is so low and we're not going to see any new homes hitting the market and we're already seeing a decline of the new livings, a decline in the rate of growth of new ups hitting the market. So the supply and demand is still very much in favor of an investor. It's still very much in favor long term for the home buyer, regardless of the interest rates, right? So you can see this the growth of the population divided up in, not the growth, but our whole population divided by age, the generation. So here's our millennials, this yellow number here in the middle. And right here at this peak, that's age 32 years old. If we come down two little bars down here,

this is about 34 years old. And the reason I point that out is the age of the average first-time homebuyer is 34 years old. So what that means is over the next 24 months, maybe even 30 months, the housing market is going to see more demand for housing than it's ever seen before in the history of the country. So that is a good condition to keep buying real estate. Because if the first time home buyers can afford it, they still need shelter. They're still going to have to live somewhere. So they're going to be renters.

And what we're seeing right now is rents are starting to catch up and overtake the growth rate of the actual housing prices. So the demand, we can't deny it. Right? The demand we can't deny it. And supply, the numbers are right there in black and white. So that's what it means for landlords and investors. What does it mean for fix and flippers? Well, the real estate agents are all reporting right now that they're not seeing the massive amounts of auctions for houses, the overbidding.

But they are seeing auctions still for the nicest house. And it's these nicest houses that are selling. And that's why we've got this price going up right here, up still 13%. So if you're going to be fixed and flipping, essentially what the out. would translate that to is you got to step up your game. You got to make sure that your house is really, really nice because now the buyers, they've got a little bit more choice. You have a little bit more selection in the market. And so they are choosing to allocate their money towards those nicer homes and ignoring the rest. So that's what we're seeing the slowing of the sales activity.

There's other in the houses that might not be in perfect condition. I mean, they might even be B pluses and A minuses, but that might not be good enough right now for this market as buyers are looking for the A's and the A pluses. So if you're fixed and flings, you got to bring it. No more cutting corners. Otherwise, you might be sitting on the market for a while. I think you'll still be fine long turn, but if you've got hard money, you've got those expenses, you might be on there for a second. 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.