Epic Real Estate Investing - How to Invest in Real Estate During a Recession w/ Jerry Norton | 1225

Episode Date: August 9, 2022

Investing during the recession period can be a little bit tricky decision to make. What are the dos and don’ts we should know about? In today’s episode, Matt and his special guest, Jerry Norton of Flipping Mastery, will give you answers to this. Stay tuned and learn more about marketing, conversations, and exit strategies! BUT BEFORE THAT, Matt talks about how you can still buy property in a sellers’ market. Are you ready? Let’s go! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. How you can still buy property in a seller's market because, face it, it's a jungle out there. If you don't know, you'll find out. It might have cooled a little bit, but there's still a lot of competition. But it's not such a scary place that you can't overcome. I'm going to show you how to turn this seller's market into your own private buyer's market. 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-Rei.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 here,

you'll know everything that you need to know to turn an aggressive seller's market into your own little private buyer's market. You know, as my cousin shopped for homes during the pandemic, he realized he had stepped into a frenzy of bidding wars and soaring property prices. So before he landed his home in Florida,

he made generous offers on several properties only to lose out to more aggressive bidders multiple times. He persevered, though, eventually locking in a deal by offering $22,000 over the sellers asking price. Now, this experience was very common during the pandemic, and it's only decelerating just a little bit post-pandemic. You know, too many buyers are chasing too little inventory. For would-be buyers, scoring a home in this market isn't just a matter of paying a bit more. The shortage of supply has added a new degree of difficulty and drama. I mean, I got to experience this particular drama firsthand when I purchased my very first home a few months ago.

And I'll tell you in a minute how I found my home in less than a week so you can do what I did in your market. But for the most part, to navigate a market this tricky, expert guidance from someone who's willing to put in a little bit of work is more important than ever. You want to partner with someone who has seen it all before, who knows how to handle challenging circumstances, can think a bit outside of the box and who will fight for your interests. So hiring an experienced buyer's agent, one who can be nimble and quick on their feet, that can be a huge asset. You know, I remember when I first sat down with my agent, and she gave me this giant list of to-does to prepare for this real estate jungle. And I'll run down that list for you right now,

but before I do, it's important first to determine that you are indeed in a seller's market. So although this frenzied atmosphere is national, real estate, it's still local, and buying a home in your area may not require such drastic measures. So, Ask your agent to help you calculate the absorption rate, which tells you how many months it would take to sell all the listed homes for sale in a given area if no new homes came onto the market. If that number is less than six months or even less than four, really, you're in a seller's market. And the lower the number, the more power that lies with the seller.

The national absorption rate of inventory is 2.2 months. That's a super strong seller's market. But again, real estate is local, so take a moment to do the math with your agent to know what you are dealing with. All right, the six steps of preparation my agent shared with me. First one was, move fast. Inventory shortages mean homes are selling quickly. So be ready to jump at any moment to tour properties the moment that they hit the market

and prepare to sign an offer on the spot. You know, I was an agent for four years before I was a real estate investor, and I would tell my clients the same thing. Speed is essential in an ultra-competitive market. Two, go through full mortgage underwriting, before you start shopping. And this contributes to your ability to move fast. In more sedate times,

a pre-qualification letter from a lender would satisfy most sellers. These days, however, you need at least a pre-approval letter. And even then, it's not a guarantee of getting your offer accepted. Sellers reviewing multiple offers typically will look for the highest price,

but what I have found more times than not, the sure thing frequently trumps the highest price. So it's a good idea to go well beyond a pre-approval letter and go through full underwriting so that all that's left is a satisfactory appraisal. Doing this up front will put you in a much better position to compete with the all-cash buyers. Third thing, look for homes under your budget so you can bid up. The fact is, you're likely going to have to pay more than the asking. And depending on the competition from other buyers, it could be a significant amount more. And this can be tough. I understand. You know, few people are

satisfied buying a house that they can afford. I mean, we're dreamers. We want something nicer than what we can afford. And that's going to be really tough to pull off in a seller's market. Number four, make your best offer first. You know, in normal markets, a home's asking price acts as a ceiling. It's a number that reflects sellers' aspirations, but not necessarily the reality of the market. In a strong seller's market, like the one that we're in, however, the asking price is often the floor, meaning that's where the bidding begins. You've got to put your best foot forward immediately, especially if you really like the house. You got to go in at or above market. If you have the ability to offer cash, do it. And it

might not feel right, but other buyers are doing it. And if you want to compete, you've got to play the game. Further, each time a house is sold, a new comparable sale is set. So it's likely you'll have to offer even more for the next house should you lose this one. Now, number five, Little sound might sound a little bit contradictory, but don't overpay. And this is a fine line to walk. It's easy to get caught up in the competition of trying to win a home, especially if you've lost a few already. Thus my previous suggestion, put your best offer up front.

Understand that paying more than what the seller is asking is not necessarily overpaying. A house is worth what the market is willing to pay for it. And if others are willing to pay more, then that's what the house is worth. But if you overdo it, you run the risk of the house not a pay. For buyers who need financing, the home appraisal can act as a guardrail against paying too much. If the appraisal comes up short and you still want the home, you'll have to add more cash to the deal to make up that difference. If the seller asks you to remove your appraisal contingency, that's a sign that even the seller knows you're probably overpay. Now, number six, make an emotional connection with the seller.

Now, this isn't always possible, but it's worth a shot. I understand the psychology of this, and I would suggest the same thing to buyers when I was an agent. But when competing with 10, 20, 30 or more of their offers, I don't see this cutting through the dollar signs of those other offers. The strategy here, though, is by establishing a connection with the seller, your offer might stand out from other similar offers. Traditionally, buyers' agents have tried to make their clients stand out with love letters, we called them, family photos or even videos, various personal appeals from, the buyer to the seller. Now, most agents, they've stopped playing this game due to potential fair housing implications if a buyer reveals personal information in the letter that influences the seller to accept or reject the offer. But those were all of my agent's suggestions. And although

I did have my own ideas, I decided to follow her lead. So Mercedes, my wife and I did everything that the agent advised us to do before we started looking at properties. We started viewing homes on a Saturday. And sure enough, we submitted an offer on our first home that night. And we were moving fast like we were told to. We put our best offer forward right up front, just like she advised. And before the sun could come up Sunday, we got word that the seller accepted another offer. So we got back into the agent's car on Sunday, found another home, and submitted another offer before noon. And once again, by nightfall, the seller had accepted another offer.

And Mercedes, she was pretty disappointed. She really liked those two houses, especially the second one. After I thought about it, though, although I buy houses all the time, I do indeed lose all the time. I just don't feel it because I write a bunch of offers daily and I'm emotionally unattached. And I brought that up to Mercedes and suggested that we start tomorrow shopping for our home

in the same way that we buy investment properties. Let's just write a bunch of offers in one day. So that Sunday night, we sat in front of the computer, we pulled up Zillow and we started looking at what was available. We marked each house that we found acceptable until we had a list of 10. Then Monday morning, we gave that list to our agent and told her to offer full asking price to all 10 of those properties, sight unseen, and within 24 hours, we received four counter offers. Mercedes and I, we counted back, and two of those counters that we sent over to the seller, two of those were accepted, and it was then when we went to view those two properties.

So by Thursday, we made our decision. Per our inspection contingency, we canceled the contract on the property we didn't want, and we proceeded to close. close on the one that we did one. So the agents recommended suggestions up front to compete in a seller's market. They were fine, but the seller still had all the power. You know, even taking all of those precautions, as a buyer, you're still at a pretty large disadvantage. They might help, but it's not a guaranteed win, that's for sure. So the market favors sellers at the moment, but it doesn't mean you have to play by the seller's rules. You can make up your own rules and play your own game. We might not have landed our dream home, but we found a very nice one quickly,

and we didn't overpay for it either. If you're in the market for a home, take from here what works for you and apply it in your process. If you'd like to learn how we buy 10 to 15 properties per month using very little of our own money, head over to R-EI-A's.com. Answer a few questions,

and then just pick a time to hop on the phone to brainstorm some ideas on what that might look like working together toward your financial goals. R-E-I-A's dot com. Please stand by. We've got overhead to pay. We'll be right back.

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Today we're going to talk about how to invest during a recession, specifically the do's and don'ts. And I've got a great guest for you today. I'm very excited about this guest and getting to know him a little bit more and tapping into his expertise and letting you guys tap into it as well. The big man himself, Jerry Norton. Can you hear me? Okay. I can hear you. So where are you right now?

Looks gorgeous. I'm at my lake house in Montana. Nice. Everyone needs one of those, I think. Right? Yeah. How long are you staying there? We've been here all summer.

We're getting ready to leave in a couple weeks. Very good. And I heard the home is Puerto Rico for you. Yeah. Yeah, we're out of the year in Puerto Rico. That's right. Sweet. Well, cool. Well, it's nice to meet you. We got like 50 million mutual friends, but we never got to meet before. So I was looking forward to this. And, you know, I've been here rambling a little bit, so we should probably jump right into talking real estate.

Okay. Because my rambled skills on what they used to be. Anyway, Jerry, so I guess talking to we're moving into a new market, I'm noticing it. I mean, maybe I'm just making an assumption. Are you noticing it? Yeah, definitely. I mean, everyone who's been in real estate the past couple years, we've gotten really spoiled. So, so often everybody starts freaking out, right? Right. But, you know, I'll have, and so, I mean, the market ebbs and flows, we've been on a really great couple years. And yeah, I think we're seeing a little bit of a slowdown. I can feel in some of the deals I'm doing. to talk. Properties that sit in a little longer. Yeah. Yep.

Yep. That's exactly what I'm seeing. I noticed it right away. It was almost on an overnight shift where the, my seller conversations were much more pleasant. There are much more giving of information. I'm looking at my inbox through my CRM and, you know, usually I just see a bunch of numbers and no messages.

But now I'm seeing half of them are coming in with actual voicemails and asking to be called back in. And so I started noticing that right away. I've seen a big upswing on my wholesaler email, a lot of list, you know. And so I know that they're getting more inventory as well. Active wholesalers that I network with that bring leads in the market where I like to fix and flip, a lot more leads. So it there as well. Got it.

Got it. So let's kind of talk about the three different elements. Like we've got our marketing. We've got those conversations. Then we've got our exit strategies. So let's kind of, I guess, address each one of those as are we making any modifications or any adjustments? So as far as your marketing goes and how you're generating deals. Well, let me ask you this first. But just before we asked that, have you, how long have you been in real estate? Were you still investing in 2005, six, seven? Did you make it all the way through that whole thing like I did? Yeah, I got in in 2004, you know, took me about a year to go full time, full time, mostly wholesaling at that point. And so I rode through that own wave through the 08 crash. I continued flipping, actively flipping at all during 2008 through 2009, all the way 2012, when the market started to read things much differently then than we do now. but, you know, that's the, I think, Matt, that's the free buddy watching. I'm getting a lot of questions.

I'm sure you are too, which is now a good time to invest in real estate. Should I wait? My answer is always, I believe, as long as people live in houses, we have a business model. The way we do it might change, but in houses, which means we always have a business. It just, we may change the way we do that. actually very excited about a slowdown because I think if we do things, probably a lot more opportunity. I mean, I don't know about you, but it's been a lot of work to get good deals for,

I'm excited for a time when we can get deals without as much work. Now, it's only changed, but the idea of getting into deals that are, that we've been doing it the past couple years, that part I'm really excited about. Me too. When you're talking about getting better deals, like it's better deals, but I also've got more options. You know, I'm calling more people back. You know, I allocate a certain amount of money each week to how I'm going to

distribute it through the deals. And instead of like trying to pick the best three out of four, you know, now I've got the best three out of ten, you know. And so that I'm seeing a lot. So that has a big adjustment on your actual just, your negotiating disposition. Like you're not trying so hard to get every single one.

You know, and you don't have to work his heart. So I'm noticing that right away for sure. Yeah, definitely. And, you know, I like to be an acquisition engineer. You know, mostly I work with wholesalers and flippers. And a lot of people tend to offer as your only option. So I've got to get this really low cap after price. I like to implement creative.

We've even been doing where we'll list property sale. Then we'll go ahead and utilize our price. real estate license. It's a little listed for them. I'm always looking for every maximum. How do I maximize every single lead that we get? Yeah, because it's energy, it's work, it's cost to get in front of a seller. And if I'm having a conversation with it to win-win this.

And so everyone's got to be thinking a little more creatively multiple ways that you can take down deals other than just that low-cash offer. Yep, for sure. And that's always been kind of my game anyway. I always start with price just because that's what sellers understand them also. It takes less education on your part, you know. But once you reach that impasse, then you can not come in seeing eye to eye on the price, then I've always gone towards the creative side of things.

So what's nice about it is they're more receptive now than they have been in the last few years. So this is good. I think right now if we continue to see interest rates go up, that we're a creative financing opportunities. Because I think sellers are going to realize the ideal because I've got this 4% loan. So this buyer that's looking at this deal, they'll pay a whole lot more to get into that 4% loan than if they have to percent or whatever. And so we're going to see a lot more opportunity for creative and seller financing for sure. Yep, yep.

I just had a call last week with the guy that had a 2.75% loan. And I was like, dude, like your loan is as much of an asset as your house is right now. And we were talking about that. And so I tried to put all the numbers. I was very excited, but he had a 2.75 and a 15-year loan. So the payment was like double. And I was like, dude, you just killed my cash flow there, you know. But yes, those opportunities are coming.

So what do you think about this? About a year ago, maybe a year and a half ago, I released, I did an interview with Jason Hartman. And we were talking about the rising interest rates. And I can make that connection that, you know, this could really put a damper on subject to because banks haven't been real aggressive on pursuing that acceleration clause because the rates just got lower and lower and lower and they wouldn't really, they had no incentive to do that. I did this video last year and I was

just like, I think subject two is going to be dead once it, once it moved, the interest rate starts moving up because that's why it was put in place in the first place back in the late 80s, I guess. But do you have you, I haven't done a subject two in about a year. So have you done one and have you noticed any sort of different reaction or exchanges with the banks? Yeah, great question. I mean, So we do quite a bit of subject to and seller finance. And we have involved with the way structured the deal. So like a do on sale clause or any of those. But you might be right.

That may be something that comes up here in the future with our rates. I don't know. That's a great question. But the way I look at it is buy here and I want to buy. subject to, I'm actually using that seller's engine that's an asset to help the seller see how much of an asset, kind of coach that seller on why they should actually sell subject to to me and how or because of his great interest rate. So I'll run the numbers and I'll say, look, but it's this number. If I've got to bring new debt, you know, like if I got to buy it,

finance it, old it, or whatever, your deal is worth this much more to me because it's all about that cash flow. So 7% is a huge swing in monthly payment, which means more for same property at a 4% rate. So I think it's how we position this, how we talk to sellers. I don't know that sellers really understand. By the way, Matt, I've got a handful of those of that exact loan it's a 15 year I am at a interest rate and he did a deal where they had uh they let you do up to 10 of them for investment to that and uh refinance a bunch of rental using that same rate and like that I mean like it's like free money practically you know it's amazing that there's even on five interest rate on a loan but pretty I mean, if you look at the inflation rate, even that rates at 6%, we're still being paid to borrow money by the economy, right? We're still at a negative 2% on the interest rate. So, I mean, cash, borrow as much as you can possibly get right now, in my opinion.

Yeah, and on the bones, I know you're right. Your payment goes way up because they're amorting over 15 versus 30. You know, I looked at it like, and I'm in a different situation than, some people, but I'm more concerned about the other benefits. And as long as that loan was positive 100 bucks or 150 bucks, I was all in doing the 15 versus the 30. I'm getting that really low rate. I'm paying down that loan, you know, way back.

And I'm capitalizing on the depreciation right off. So it kind of hit the other things that were, for me anyway, on those longings. Now I'm wishing I did more of those. Oh, totally, yeah. I mean, hindsight. It's a killer, isn't it? So, all right, so as far as your exit strategies are going right now, what are the stuff you're doing more of and you're being cautious of others?

Is it changing anything about that? Or is just business as usual for you? Well, business as usual in the sense that I'm still, I think right now everybody should be doubling down because I think great deals are coming. So really just this is really should be making even more offers. You know, we get deeper discounts. I want a bigger, I want a bigger deal now because I think there you can get them.

But I mean fixed and flip, which I like to do a lot of fix and flip. There are some very significant changes because like wholesaling, you know, oh, you're in the deal a little bit longer. Maybe you're in it for four or five, six months. Right. And market.

I'm looking at active more than I ever did before because I want to set her sitting. So now the sold comps are a little less relevant because acting meaning a lot to me. I just looked at a deal that I was comping. 75 was my sold comps for flips, like renovated homes at 250. and they were sitting for, you know, 45, 60 days telling me 275 is not the ARV anymore. Right, right. And so they got ARB's down, being a little more conservative on ARP, and I've been getting a lot of meaning very minimal work on houses because they just want a house.

and so we've been really getting away with not much in the way and now we're reevaluating that now I'm going back to regular fix and flip where it's we're going to replace that 10 year old roof you know now I got to stand out now I got to be the best house whereas before you didn't you have anything for sale and someone would buy it and pay over and make some of those adjustments but really that this is just uh I mean if you've been in real estate real estate since COVID really, then you haven't followed fundamentals. I'm just going, the fundamentals are you better really understand your numbers. You better really understand.

You can't just ride appreciation and think that it's going to be worth 30 as soon as you listed in three months. Like you've got to be following against sound business practices. People are going to be hurt that think they can get away with what they've been getting. You know, I had to follow normal business practices. So I'm just going back to some of that. I mean, we just buy it at discount and relist and make a ton of money without doing anything. Right. We are adjusting some of the ways that we're doing things back to the old way of doing things.

Right. Yeah, one of the things that we're still having a little bit of issue with your audio, so I'm going to kind of recap some of your stuff a little bit so people can hear because I really get what you're, I'm picking up what you're putting down. As far as you're running your cops and haven't known your numbers, you'd set something really key,

and that's what I'm teaching everything, all of my coaching students here, is that, you know, we really haven't had to look at the for sales, the actives for a really long time because that would give you a skewed number of you're paying too much because everyone keeps going higher and higher and higher.

But now if you're got to, if your intent is to go ahead and flip that property, whether you fix it or not, you really want to, look at what your competition is going to be once you actually do own it. What is that are the active is going to be? I think, you know, but I have a sole cop here for this 275 or whatever it is.

But like, you have to understand that. That 275, it closed on that day, but it entered contract at least 30, maybe 45, 60 days before that. So that's really a snapshot of what the value was a month or two ago. And so you got to be really careful on that. The other part is when we're talking about that you hear it on the news all the time right now, how the market is cooling, the market is slowing. There's two things. The appreciation is cooling, but it's still appreciating.

So there's one aspect of it. The second thing is the sales activity may be slowing, but the median price point continues to rise. So one thing that you had said is if you're going to be a fixing plipper now, you kind of have to be the best one on the market now. You have to put some money into it. You've got to be the prettiest house because that's still, at least here in Vegas with the agents that I know, there's still.

still the auction type environment, the multiple bids on the nicest houses. Like if you're a B plus or a B, you are sitting. If you're an A minus A plus, you're still selling really fast. Do you see the same thing? Yeah, yeah, that's a great point. So like, you know, I used to have some wooden touch, like, you know, a two-bedroom or a smaller square foot is a market where it didn't even matter. There's a buyer for it.

Just do it. And now I'm going back to, if I got really closely at, am I in a quiet street? Do I have the right square footage? When there's a buyer in the marketplace and he's got options, I got to be the best option. Right. Looking at how you're doing that rehab, you've got to create an A minus A, A, A, P you want to move it and your number. So it's back to the fundamentals, right? The fundamentals create a product that a buyer is going to want that's going to hit an ideal buyer in your market.

So I definitely agree with that. And I've listened to some of your stuff, Matt, and I tend to agree with you. I see a lot of like the market's going to crash and all the sensationalization. And that gets a lot of good. The thing is there's still the fundamentals of supply and demand. And I saw one of your videos recently and you talked about, you know, months of inventory versus and so guys uh we're still in a negative there's still not enough homes to meet the demand and that's a real issue anytime soon that we cannot solve that problem

overnight and so as long as buyers can place and there's not enough homes to meet that demand and we will not see a crash we so anything else is doing it's the fundamentals of supply and demand. Yeah. 100%. I mean, to take that even further, when you say it's not going to end anytime soon, I mean, there's a lot of calculations, a lot of various smart people out there that've done these predictions, you know, since we had our peak building in 2006-ish.

And then, you know, 2007 hit and everyone just stopped building and it went on a deep, deep dive. And that removed a lot of people from the industry that never came back. And the people that stayed were still, you know, they're kind of licking their wounds for a while and didn't jump back into it too aggressively for a really long time. And that time was about 10 years of a deficit of building. And that's what we're experiencing right now. And what is compounded and made it even worse is not only do we have a, not only do we have a deficit of building, we had a surge in population that was approaching home buying age. Yeah. So you've got.

So this is how I see with the supply and demand part is that you've got the average, the peak age for the millennial right now is 32 years old. The average age of the first time home buyer is 34. So you could look at this and put those two together and really logically come to the conclusion that, wow, within the next 24 to 48 months, you will see more demand for housing than this country has ever seen in the history of existence. And we have a 10-year deficit of building. So it's like, yeah, I see.

Go ahead. To that as well. I read an article about this, but we've also seen a in regulation and zoning requirements and difficulty and even, I've seen this personally because I do some new construction. And I would say in the past five years,

to get an approved building permit to just spec a house. Like I'm not talking to spec a house. Has it easily doubled. So we've made it more difficult to and now there's even less ability to supply that right now. And so that adds to what you're saying here, which is it's nice to meet this demand problem we have. unless they, even if they drastically loosen create a whole bunch of investment comes on and they start building again, it's going to take time to catch up with that. Yep.

I see really only like three options. And I've been thinking about this a lot. Either one, the government has to start building houses. Or two, they got to start subsidizing and making it easier for builders to build houses. Or three, they do nothing. And we're just going to have chaos. And we're going to have multiple families. is living under single roofs.

Well, I don't know if you've seen it, but I've been reading allotics and rental demand has skyrocketed. And it's going to continue because rates go up, less people can buy in now, right? So they're going to continue rent. So there's there's about 10 markets in the U.S. that have 20 to 30% rental increase. And across board, I think nationally it's that like, 15% and you can see it. I mean, like, it's insane to look at a one-bedroom apart. B is like 1900 box or something like that.

It's insane. And there's a waiting list, find rentals. It's really difficult to find rentals. There's two things that are happening right now that very rarely happen. And one we already touched on where the CPI index, the inflation, is higher than the mortgage rates. So that's a rare occurrence. And we have that right now. The second thing that's very rare is where rents are outpacing appreciation of the sales prices now.

That it's usually like three-year lag that the rents have to catch up. And this is all just reflective of the demand. Like people need housing. So if they if they're getting pushed out because of the mortgage rates and they can't afford to buy, well, then they got to go rent. But they still need a house. So either they're going to buy it or they're going to rent it. And so the idea of a really sharp.

up on your creative financing skills and being able to start taking some of these properties over subject to and with seller financing is really not a position yourself for a long term. I mean, you do just 10 of those. You're probably set for life. It might not be an immediate impact, but you are good. You're in a real stable position. Yeah. I'm really thinking, Matt, that in the next 12 months, some loosening up.

I think we're going to see, it's going to take a minute for sellers. I think it's happening, but I really see the effect. But I think sellers are going to really start to loosen up. They're going to get off of that. It's going to stop drinking their own Kool-Aid as far as like, oh, my house is just going to be worth more and more and more. And you're going to see a whole other level of motivation that we haven't seen in a while. The people that are at, I like to call them acquisition engineers, but the people that be in front of those sellers, meaning you're doing that lead and you're getting on the phones,

you're getting, you're putting offers up there. You're going to get some amazing deals, but you've got people who are on the sidelines right now. And my advice is like, get in the game, man. If you're concerned about deeper, but don't sit the sidelines right now. Get in the game because some amazing deals.

And they're there for the team, I think. For sure. And because of the supply and demand dynamic, I think this little slowdown we're experiencing right now could be the last little slowdown for a long time. I mean, if it lasts six months, maybe it lasts a year or two. But because of the amount of people in comparison to the amount of houses, it's going to continue to go up and up and up. So I don't think it's going to get any easier after this little, you know, break that we're having right now. If you think about it, you know, like we look at line straight for example. And it's so funny to me the reaction to that where people are like, man, in a couple months, it went up so high.

But yet, if you, but can you look historically, a 6% rate is actually not even that bad. It's not even not normal. And in a minute when everyone kind of reset that, you know, when rates go to eight, we're going to think six. is amazing. You know? I think it's going to be hilarious when when that is that 6% is an amazing deal, right? Whereas right now it's like, oh, my, leaves 6%, you know, because it's not historically, speaking.

Right, right. Well, it shouldn't be in 2004 or 5 when it was a massive appreciation, we were at 5% and 6%. That's what the rate were. Yeah, exactly. Cool. Well, let's kind of, let's conclude this to make, like, say three action points. How to, and let's answer the question, how to invest in real estate during a recession. So what do you think is the first thing for everyone to keep in mind at all times? Well, you have to turn on your or I like to call it. I like to refer to lead gen as a faucet that you turn on and you never turn off the fundamentals of wholesale flipping, any type of real estate investing. is in front of enough leads because if you don't have

enough leads in front of you, then you're simply not going to have enough opportunity for sellers that say yes to your office. It always starts with that. Everybody's got to understand how do I get leads every single day. But I think big picture, if you're not getting those leads in front of them

every single day to be making five offers a day, if you make five offers a day where you're putting a number in front of the seller, if you do that on a consistent basis, you will be getting deals on a monthly basis, the scientific data of the numbers. If you're going to get in front of enough opportunity, I think that's first and foremost, I feel like that's kind of a given about that.

Number one, yeah, leads. First and foremost, I also feel how to be looking at your eggs a little bit differently than you've been looking at them. If you've been planning on eggs or you just have a mindset

that it's just going to get more just because time goes by to adjust that and go back to really looking at data that's going to support an eggs you feel and if you can feel good about that exit number by looking at relevant

data and relevant actives now. So this goes against everything I've been teaching, you know, looking at things, which is put a lot more weight on on actives and days I'm looking at days on market. We touched on this a little bit before. Definitely be looking at properties, be like an A

like Matt said, I love your analogy. A minus A plus, meaning is going to have high demand. You know, assuming I do think to it, maybe like fix it up or whatever. I'm not talking about location. Does it have the features that a buyer is going to want? If anybody is on basements and this one doesn't have a basement,

you've got to be through those things now. Because of market, whatever your exits are, then you've got to be thinking, how do I attract the bias? I don't want to be sitting because I'm not the ideal property that. But that's too, look for properties that ideal buyers are going to want. Adjust your extra strategy. So be looking at ARVs, not just ARVs, but also repair.

So what do I do to this property so that if a buyer's got 10 houses to pick from, how do I make my house attractive price accordingly so that a button one's on the market? And if you're making those small adjustments, I think those are small adjustments, Matt. You're going to win right now as the market correct. And if we continue to decline, you know, keep in mind like we talked about, I don't think we're going to see this mass prices plummet

and we get flooded with foreclosures. I just don't see that happening. And all mine is, everything we're talking about here is very market-specific. I think some markets are going to weather this. I think the Phoenix is in a lot of Florida markets and the Las Vegas markets, the sands market where the demand is just so ridiculously high that, you know, appreciation, maybe we see 15 or, you know what I mean?

Like we're still going to see and for housing in a lot of markets. So if you're not in one of those more, looking at, the trends, days on market. There's a lot of data that can help support what you do as far as how much it's going to drop. There's some good predictors out there that can help you. But I think if you're really paying closely attention to some of these indicators, you can make a very edge analysis.

You can buy it from steep discount phenomenal deals right now. Totally agreed. Totally agreed. Yeah, the sound didn't improve. that much. So again, a lot of comments over here. So I'm going to try and recap for you a little bit. Okay, so everyone can get it. So the first thing was steady leads. You need steady lead flow. Right. So you got to, whether you're going to work for them or you're going to pay for them, they got to be steady. Second thing is you got to make offers. You got to make offers every day.

You know, when it comes to the real estate's value, it's all about location, location, location. When it comes to the succeeding in real estate investing, it's offers, offers. You got to, You got to give the ability, the seller, the ability to accept something. And I really like, like, I push it even a little bit further. You've got to put it in writing. You have to put the pen in their hand and give them the ability to sign something. You got to do that. And if you don't do that, you can do everything else right.

And you're never going to make any money. Okay. So that was that. Third thing, which, and we talk about, like, if you're going to be fixing and flipping, and I would say to some degree, maybe even rentals, but mostly fixing and flipping, you've got to really pay attention to your customer net. What is your customer want? And right now we're looking at the grade A properties are still selling with multiple offers.

And the ones that are B pluses and B minuses, like the ones like the little, the whole tail stuff that we could put as a C plus and still get, sell it right away. That's all kind of slowing down a lot. So that was the other one. Pay attention to what your customer wants. You got to be a real service provider in that regard. you're going to get some foot for it. And I think the other big thing that you just said was, was key is not a national market anymore.

The locations are going to be very individualized. And, you know, for example, I've got a number of students in Florida. And I'm having very different conversations with them than I'm having with the people in, let's see, in St. Louis. Right? Or, you know,

very good conversation. Yeah. And, you know, I'll help one. And we're going, we're comping out of property. We got all kinds of cups and all this stuff. And then we go to Florida. Like, oh my gosh, everyone's held onto their property and nobody has sold anything and there are any cups. Like, you know, noticing this type of thing. And so yeah, the location is going to be important again. So I don't, does I miss anything? That was kind of it, right?

Yeah, I think so. Yeah. Well, Jerry, let's do this again when you get back to civilization and we can hear you better because people were trying to hear every word that you said. and they're hanging on every single word. If you want, we can do it again. Can make the audio wrong, but I apologize for it. Thank you very much. And thank you for giving to your people. And thank you for sharing this time with me.

Thank you. Appreciate you. Okay. Take care. I'll see you soon. Okay. Yep. 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. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.