Epic Real Estate Investing - When Your Income is Not Enough (problem + solution) | 1239

Episode Date: September 29, 2022

In a financial system driven by debt, inflation, and taxes, how are you supposed to get ahead when every aspect of the system is designed to take your money? And now we're dealing with a recession, too! It’s gonna take some different thinking and positioning, but there IS something you can do to turn the tables in your favor like no other time in our lives. Stay tuned and hear how to position yourself so that this rigged financial system actually helps you get wealthy! BUT BEFORE THAT, Matt lists the top 10 cities where housing markets are crashing the fastest. Are you ready? Let’s go! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Hey, Rockstar, I've been saying for years up until just a couple months ago that the real estate market will not crash unless one particular thing happens. And that's the thing that you needed to watch. And that thing is happening in 10 cities specifically. So let's go through those 10 cities. I'll run through them 1 through 10 so you can see if your market, if your city is in that list, and if your market could potentially be next. Strap in. 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, it was this report here today on CNBC, said these are the 10 U.S. cities where housing markets are cooling the fastest, and only one is in Florida. Let's take a look. So the housing market is in flux right now, which we all are pretty much aware of, thanks to high mortgage rates, inflation, and economic uncertainty. So let's take a look at the mortgage rates really quickly. and the most recent historical high water mark for mortgage rates was 14 years. It was broken so many times in September that we officially declared it to be boring last Tuesday. Now, less than a week later, 14-year highs would be more exciting than boring. As of midday today, we're officially at 20-year highs.

What's more important is that less than a year, the payment on a new $400,000 mortgage is up at least $1,000 a month. And many lenders are now quoting top-tier 30-year fixed rates over 7.000. Here's another interesting thing because we're hearing about prices dropping. Well, if we look at the median sales price of houses sold for the United States, right over here at the end of Q2 for 2022, we hit an all-time high of $440,300. Where we're seeing the massive price corrections are of listing prices, of properties that have not sold. The emotional equity has left the market and sellers are just having to get a little bit more

realistic. And you have to be really careful with the information that you consume because right over here at U.S. news. This is just today. New home sales post sharp increase in August, defying expectations. New home sales rose a surprising 28.8% in August from a month earlier. A contrast to the broader narrative of a housing market slow down. Let's go back to our original article. So high mortgage rates, obvious, then persistent inflation at sites, which they'll probably get very little pushback because we all interpret inflation as being a bad thing, and it is for most people. But if you're positioned to,

correctly, if you're owning real estate, the worse inflation gets, the more valuable your real estate becomes. The worse inflation gets, the more income it produces. Also due to economic uncertainty. So between mortgage rates and inflation and the economic uncertainty, those are things we all need to keep our eye on. And I've identified a few others. I just completed a new report on that. And if you like a copy, you can go grab that at Epic Freedombook.com. I made it really easy. I uploaded it there for you. But let's continue with our list. So the technology power Real Estate Brokridge, Redfin, ranked 100 of the most populous metropolitan areas in the United States using the following metrics. Prices, price drops, supply, pending sales, sale to list ratio,

speed of home sales. So the study found that the markets cooling off the fastest from February 2022 to August 2022, a six-month time span were almost all on the West Coast. And topping the chart was Seattle, Washington. About 34% fewer homes sold within two weeks in August than a year. earlier. That's significant, 34% in just two weeks. Home prices are also falling with the typical property selling for 2% less in August than a month earlier. Two percent in one month, that's pretty significant. And that is distinct. That is not nationally. The real estate market is returning to its roots. It's all about location, location, location. Not every market is going to be impacted this way. A lot of sellers aren't able to get the price they want because buyers don't want

to compete with other offers when mortgage rates are double what they were a year ago. That means there are fewer sellers, homes, and fewer buyers making offers on the ones that do hit the market. So the top 10 cities where housing markets are cooling the fastest, number one was Seattle, Washington. Number two, Las Vegas, Nevada, my new hometown, where home prices in the city were down 3% in August from the month before and about 26% fewer homes sold within two weeks than a year earlier. Coming in third, San Jose, California. Where, according to Redfinns report, the housing market has likely cooled off because the feds,

rate hikes and rising mortgage rates have made it more difficult to afford a home there. And then number four, San Diego, California. Number five, Sacramento, California tied with Denver. Number seven was Phoenix, Arizona. Number eight, Oakland, California. Number nine, North Port, Florida, and number 10, Tacoma, Washington. The good news is to slowdown, it's dampening competition. And giving those who can still afford to buy more, it's giving them negotiating power. So as I've been saying, the mortgage rates, that's the one factor. that could bring the whole thing crashing down. Is it going to bring it crashing down?

I don't know. I still don't think there's going to be a crash, but it's certainly causing the slowdown, and it's impacting those markets in that list more than the rest of the country, but could the rest of the country be following? I still think, though, for over the next 10 years, real estate is the greatest investment opportunity that you have it, just based on the concept of supply and demand.

We've got more people than we've got houses, and we're not building the houses fast enough. And the people, they're starting to age and do home buying age. We're going to see over the next five, six years, more demand for housing than we've ever seen before, and that right there and not be manipulated unless people start living outside, unless families start moving in together, which could potentially be an option.

But based on our culture, I don't really see it moving that way. We need more houses. We need more housing solutions. And they will likely come what they're going to be. I'm not sure yet. But whatever they are, people are going to pay for it. Whether they buy those dwellings or they rent those dwellings. People will pay for shelter.

They will pay for security. And when you can align your investments with human beings essential needs like shelter, like security, that's a recipe for getting wealthy, particularly when we're going to see more demand for that than this country has ever seen before. Now, sure, it might be bumpy along the way. We might have another year, maybe another two years of this being a little bit uncomfortable, but this is your opportunity to position yourself correctly because all of those people that have purchased a house in the last few years, they're not selling.

And then all of those people that got their refies done, and they are sitting on these nice cushy 2.5%, 3%, 4% loans, they're not selling. We're not going to see a big influx of inventory hitting the market, not nearly enough to satisfy the amount of people that are going to need shelter. And they are not going to raise these mortgage rates indefinitely. They will have to level off. And when the job is done that they're trying to accomplish by cooling off the economy,

they're going to have to start lowering them to spark up the economy again. And when that happens, this pent up demand is going to snap back like a rubber band. and those that are positioned correctly, controlling real estate are going to benefit. We'll be back with more right after this. Boarding for flight 246 to Toronto is delayed 50 minutes. What? Sounds like Ojo time. Play Ojo? Great idea.

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Please play responsibly. Concerned by your gambling or that if someone close, you call 18665331-260 or visit Comexonterio.ca. Hope is not a financial strategy. Let's get back to work. In a financial system driven by debt, inflation, and taxes, how are you supposed to get ahead when every aspect of the system is designed to take your money? It's getting a little weird out there.

And doing normal is riskier than it's ever been. It's going to take some different thinking and some different positioning. But there is something that you can do to turn the tables in your favor like no other time in our lives. You know, when most will freeze and fail, you can fly and flourish. Now, before I dive in here, I just gave a talk to a real estate mastermind group where I gave away a new report that every worried American investor should read before doing their next deal. And I didn't realize chapter one would get the standing ovation or any ovation whatsoever. It's pretty humbling. If you'd like a copy, though, I made it easy for you and uploaded it at epic freedombook.com.

Okay, there's this guy, Tom Corley. You know him? He wrote a book, Rich Habits. Good stuff in there. And one of the habits jumped out at me as a more practical and tangible path to becoming rich than the others. But as this twisted economy continues to do what it's doing, this particular habit is looking more and more like it'll be a required one to just survive. And most people aren't thinking about it,

or even aware, it's a serious threat to the American dream. So in the book, Corley, he shared the results of a five-year study comparing 233 wealthy individuals, mostly self-made millionaires, to 128 lower-earning individuals, earning $35,000 annually or less. So the results were telling, to say the least, life-changing even. But this one specific portion of the study revealed that those earning $35,000 or less were dependent on a single source of income. And if you're thinking because, you know, you earn much more than that, like six figures even, that this doesn't apply already, hold that thought for a minute. You may find that this hits closer to home than you think. From what the United States school system teaches, the conventional career ends up looking something

like this for most people. Get a job, work hard in advance, get your annual review and raise, and then eventually you get to retire, preferably with a fat 401k or a pay. pension plan. Millions of Americans are faithfully following this path today, relying on a single salary just hoping for the best. And this could have them on a collision course with poverty. Because a recent Nielsen study found that 25% of Americans making $150,000 or more are living paycheck to paycheck. Shocking, right? Yeah, 100,000, what it used to be. And you know that's true. I mean, there's a doctor that lives on my block. And he shared with me that his $300,000, a year's salary is barely enough to cover the house payment, the two cars, the student loans,

and his latest expense, college tuition for his twin daughters. A six-figure income used to mean something. I mean, most of us grew up thinking that money like that would eventually lead to financial freedom and a retirement of happily ever after. So the median home price in the U.S., it's up 182% in the last 20 years, and today, the average person has been unable to keep up. People can always rent until they're ready, right? Hold on, sweet tooth. Despite the average appreciation of rent being 3 and a 3rd percent per year. Due to the magic of compounding from 1985 to 2020, the national median rent price rose 149% while overall income grew just 35%.

Rent price increases have exceeded income increases by 325% since 1985. Further, for as far as I could tell, year-over-year rent increases have officially surpassed the year-over-year home appreciation for the first time ever. Typically, rents lag about three years behind home values. Not the case right now. So when you buy or rent where you live, America's most important expense each month, shelter, it's running away from them,

not to mention every other important expense in life from insurance to energy to gasoline to food. For those who are currently earning six figures, they are waking up to disappointment or disgust, really, as expenses rise and inflation kicks our ass. They're realizing the six-figure income is the new five-figure. figure. I mean, if you're living on a single source of income, you're not going to make it. That's what I'm getting at. The 233 wealthy individuals studied in Crowley's book, they understood this,

as 65% of self-made millionaires had three streams of income, 45% had four streams of income, and 29% had five or more streams of income. Clearly, the multiple streams of income strategy can lead to wealth, but as each day passes, it appears it will inevitably be a strategy to just survive. And it goes much deeper than this. It's the reason I put together that new report, and I uploaded the whole thing for you at Epic Freedombook.com. Rising costs aside, though, one income stream represents a single point of failure. When we live in a world now where viruses shut down economies and recessions occur cyclically and companies cut costs by laying off employees and technology, more and more is replacing the employee altogether. Relying on a single

source of income is a dangerous game to play in today's bizarre world. Regardless of how you feel about what's going on, it's what so. I mean, complaining is nothing. Inflation doesn't care about your feelings, doesn't care about who you voted for, or who you think deserves the blame. The reality is, it's almost impossible for most people to achieve financial freedom in a reasonable amount of time because their one source of income is increasingly falling short, even for those that earn six figures plus. So let me ask you this. If you had to start over knowing what you know right now, would you strive for a better job or better investments? And hold your decision to yourself for a second. Now let me ask you this. Where do you think you'll be in 20 years with that decision?

How about 10 years with that decision? Or five years even. Whatever your decision, it comes down to positioning and understanding how money really works and how it works specifically in the system that we live in. And this financial system of debt, inflation, and taxes that's designed to take your money with some different positioning, could you actually use the system to get wealthy? The economy has a lot of people seriously worried right now. But if you know how to do stuff, you're not worried. Once you're positioned right, the doing falls a line pretty easily. And there's really only one surefire way, the average person that pulls through this insanity.

Because this way, you have access to other people's money, the worse inflation gets, the more it appreciates, the worse inflation gets, the more income it produces, and it's the most tax-favored asset class. Income producing real estate, it checks all the boxes. As the masses are cooling off when it comes to real estate, it's the very time for you to heat up. Real estate, it's created more wealth for more people than anything else, and it will create even more wealth for more people in a down market.

And most people know that intellectually, yet they're still paralyzed with inaction. You know getting involved right now is the right thing to do, but the fear of doing it wrong is too much for most. So they fiddle and wait. And best case scenario, the best case, they will come out on the other end of this mess in the same situation they're in right now. Hopefully.

What's for certain, though, in hindsight, they'll recognize the opportunity that they missed today. So get positioned on the right side of this right now, and you won't have to live with that regret. If you need some direction, there are three ways I can offer some. Whenever you're ready, you can, one, if you're a busy professional and, you know, you feel fighting the time to get started is going to be your biggest challenge,

pick a time to hop on the phone to see if us doing all of the heavy lifting works for you. You can do that at cashflow savvy.com. Or two, if you want to be more hands-on and, you know, work together one-on-one maybe and get serious about this, let's jump on the phone and discuss that. And you can do that at r-e-i-a-a-a-com. Or three, if you're not sure, sure yet? I understand. There may be a lot here to unpack it. And you need some more information? Well, I took care of that for you also. A quick free training that should give you more insight.

It's free and short, go to matsclass.com. It's getting funky out there. And you know that. And doing normal, it's a risky proposition. We don't do risky here. We take leaps of certainty. 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 world. We got the cash flow.

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