Epic Real Estate Investing - Single Family Rentals - Is THIS A Good Time to Buy? | 1016

Episode Date: May 12, 2020

In the midst of the crisis, Mercedes, the Turnkey Girl reveals whether you should buy single-family rentals or not. Mercedes shares current statistics and her life experience with a market crash back in 2007/2008 to give you the precise answer to this question. Tune in and find out! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. So you want to be a real estate investor, but you don't want to do the work. If there were only a way where someone else could do it for you, now there is. Tune in here each and every Tuesday on the Epic Real Estate Investing show for Turnkey Tuesdays with your host, Mercedes-Torris. Hello and welcome. Welcome to Turnkey Tuesdays brought to you by Epic Real Estate Investing. My name is Mercedes-Torres, the Turnkey Group. and I am lucky enough to be partners in crime with Mr. Matt Terrio, the gentleman who created

the epic real estate empire. Matt is just blowing it up this week with the creative acquisitions series that he is promoting not only on our podcast but on YouTube, so I'm lucky enough to take the ride with him right alongside him. Now, I generally help busy professionals create passive income through real estate investing so they can retire even sooner. And when I mean retire, I don't mean retire to quit your job and do nothing. I mean retire so that you can do whatever it is that you want with your life.

And that's what this podcast is all about. It's about creating passive income through real estate investing so you can do whatever you want with your time. So if this is your first time here, glad you made it. If this is not your first time here, welcome back. All right. So it is no secret that COVID-19 has hit the U.S. economy in full force. So last night, I was watching the news and I seldom watch the news, but I tried to keep up with the sign of the times. And I just heard a daunting statistic that 30 million people are unemployed as of right now in America. Now, we are in May 2020 and 30 million people are out of a job.

Millions of more are seeing reductions in hours and naturally households are struggling just to make ends meet. I mean, that is 10% of our country. Insanity, right? It is undoubtedly the highest, figure that our nation has ever experienced with regards to unemployment. I mean, the media has spent so much time focusing on the negative of what's transpiring in the world. But they're not letting you know that 90% of the people still have their jobs. Of course, I'm not accounting for children and the elderly. But the point is that although, unemployment is at its all-time high, there are still people that are employed. I mean, think about the people that are on the front lines. Think about the people that work for restaurants and grocery

stores and the post office and UPS and Federal Express. That's 90% of the people that still have their jobs. In fact, considering the sign of the times, the sales of properties, they're not going down. And surprisingly, the real estate market has not taken a total dive, as you would suspect. I mean, leasing and investment brokers are still reporting a high demand of single-family residents and rentals. Shandon Economics estimates that occupancy rates on transacted single-family residents increase to 98.5 this first quarter of, quarter of 2020. Across all single-family residents as measured by the U.S. Census, occupancy rates are up an average of 94.8%. The single-family rental investment community has long insisted that this sector is one of the most immune to recessionary pressures, and one of the reasons is because many people, many people

potential homebuyers will have difficulties qualifying for financing during these times. As a niche sector, single-family residents benefit from particularly strong tenant retent retent because of situations like COVID-19. Now, during difficult economic times, single-family residents are likely to attract people who can't otherwise choose to purchase a home, especially during economic unstable market conditions. They also appeal to tenants waiting for that flexibility in renting simply because people are too afraid to dive into the commitment of owning their own primary residence, hence they rent. In fact, according to CBS News article dated May 5, 2020, foreign investors, specifically investors from Asia, Germany, and Australia are looking for the calm and the coronavirus storm, and they're looking at U.S. residential real estate.

And these sales for single family residents appear to be up and these people are buying properties online. And this is why sales are not dropping pertaining to single family residents. for rentals. Now, I've shared before, Matt and I just moved to Las Vegas, Nevada, several months ago, and for the first time in a very long time, I mean years, it's been almost 10 years, that Matt and I have been unable to invest in our own backyards. Well, it's logical. We lived in Los Angeles, California, where the price of a single-family residence, three-bedroom, two-bath, easily sells for $500,000, and that's a 1,000 square foot single family residence in a okay neighborhood. Like, not an ultra nice neighborhood, not bottom of the barrel, but you know,

right smack in the middle. And that particular single family residence that you were paying $500,000 for, it'll probably rent for about $2,200. So when we were in Los Angeles, we stopped investing in that market because it made no financial sense. Matt and I are real estate investors. We are buying and holding our properties or buy and holders, and it just made no sense to buy properties and hold them in the city of Los Angeles because we focus on cash flow. Here in Las Vegas, Nevada, however, that is a whole different ballgame. It's very easy for you to find a house that is about $230,000 that rents for about $2,200 a month. So we're just under the 1% rule, but nice enough to still be able to rank in a nice return. In fact, I just bought another single

family residence here in Las Vegas, Nevada. It's our third one in just six months. And in fact, just three days ago, I rented to a couple that needed a place to live. Now, I'd have to say, this couple is an average couple. They just got married. He works as a security guard at the MGM Grand. She works part-time also in security at MGM, but she's back in school, finishing her masters. So I'm not concerned about the rentals that I'm picking up.

up because of the statistics that I just shared. I mean, people need shelter. We need shelter to be healthy and safe specifically during these times. And people want to go back to work. Everyone is saying open America up. And it's not because people want to go out and buy a Lamborghini. It's because people want to put a roof over their heads and they want to feed their kids. They want to want to be safe and healthy and they want a, you know, warm place to sleep at night. So for those of you who are thinking that the real estate market is going to crash during this global pandemic, the reality is that's not what's happening. In fact, quite the opposite. The rental market is still strong and it's getting stronger because people have been placed. And,

placed on unemployment. Therefore, they're not going to be able to qualify for loans, but they are able to qualify for rents. And history repeats itself. It's been about 12 years since the last economic crash, the collapse of the mortgage industry. I'm sure you recall that in 2007, 2008. I've shared my story before that that was the time where our real estate career, just took off because I saw the opportunity. I saw that people were not able to make their mortgage payments. The value of homes just completely plummeted. Everyone was short selling. The bank was selling you homes for like 50 cents on the dollars and I was buying as much as I could and I was renting faster than I could buy. It was during that time that Matt and I built our portfolio when we originally started.

And when the market started to correct itself, we were holding on to assets that it then made sense for us to sell. But at that time, when it made sense for us to sell, the market was not so friendly with cash flow. Now, that period took a few years, but it's when I jumped in. I jumped in when everyone was jumping out of that market. Fear and the unknown was causing people to just give the homes back to the bank, and the bank was overloaded with inventory. And having said all of that, I picked up properties at a portion of the cost. And I have a very strong inclination that an opportunity, much like

the opportunity back in 2007, 2008 is going to transpire again. Perhaps not to that degree, or it won't be the same. It'll be a little bit different. However, it is still an opportunity. I see the writing on the wall. It is no secret what's happening. And I can absolutely see that shelter is absolutely necessary. Unfortunately, some people are going to lose their home, forcing them to rent, or people are not going to qualify for mortgages, again, forcing them to rent. Either way, single-family rentals are not going anywhere. So why not? Stock up. Seize the moment. See the opportunity. this is going to be a time where you are going to be able to stock up on rentals that you are going to easily be able to rent. That's it for today, my friends. As I say every week, I hope I got your

wheels to spin. And if you need help or you feel stuck, don't hesitate to reach out to us. feel free to go to cashflow savvy.com, have a full conversation with one of our cash flow savvy consultants, because that's all they do. They reach out to you to help you find the passive income in your world. Oh, and by the way, if you like what you hear, I would truly love if you would share this podcast or if you write a review. A review goes a long way, and it helps those individuals that are searching for the next thing during this pandemic. So if this podcast resonates with you, share it or leave us a review. I truly, truly appreciate it. Until next week, where cash flow is king, keep being epic.

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