The Science of Flipping - BIGGEST Housing Market Recession 2022 | How To Survive Economic Recession

Starting point is 00:00:00 So this isn't a time to be fearful. It's a time to pay attention. It's a time to be dynamic. It's a time not to be stuck in your old ways and maybe create new opportunities for yourself. This is your time to learn how to the Science of Living podcast. I am Justin Colby. Now I'm going to get very real with you guys about the state of the economy and what that means to us real estate investors now there's a couple criteria that i've been watching and in fact i'm going to quote right here from some articles that i've recently been reading now if you're not watching this on youtube you need to be go to youtube.com forward slash justin colby but also if we are all recognizing that there is a true shift in the economy, that the economy is very dynamic right now, but you know and believe the same way I do that real estate is the play, then you need to get your tickets to the REI Masterclass coming up June 24th, 25th in Scottsdale arizona we all know that real estate is the greatest way to build wealth

Starting point is 00:01:25 and whether you are someone that is building a seven or eight figure business and doing this full time or maybe even sitting on the sidelines kind of buying your time to jump into the game or maybe it's just a side hustle i encourage you to get to this live event in scottsdale june 24th 25th because myself and some of the top experts are going to be showing you their strategies, our strategies, as well as showing you how we are pivoting, why we are pivoting in the way we are, and how that means or what that means to you. So make sure to go to thereimasterclass.com. Get your in-person tickets. There's literally only two VIP seats left, period, that you can spend three days with me and my team. So go to thereimasterclass.com,

Starting point is 00:02:13 get your tickets as this is a very dynamic time in the economy. Now, with that all being said, let's talk about a couple points that have been brought to attention. All of you guys are feeling the gas prices right now. I know that to be true. Even myself feel the gas prices increasing greatly. We have the interest rates going close to 6%. We have the yield curve, which is the short term and long term bonds that is going negative, which means it is more profitable for the short-term bonds versus the long-term bonds. We have consumer buying coming to a screeching halt. In fact, some of the lowest consumer buying in about 20 years. We have inflation almost at 10%. One of the articles that I read from CNBC actually is talking about how the Fed is more focused on stopping inflation, which likely means

Starting point is 00:03:06 they're willing to risk the recession. Well, no one really wants either, quite frankly, but you do have to do something. So they're actually looking to point their eyes and focus on making sure inflation halts, which likely is going to stem the recession. And the recession is going to be based heavily around the interest rates. Interestingly enough, interest rates obviously are going to affect many people when they're looking to buy a home at two, three, four, $500,000. Because really, most people are buying those homes because they can afford the mortgage payment. I have been the opinion that the luxury home market would likely not cool off as fast as the lower price point however there are articles that actually say that the luxury market is cooling off in a very similar fashion not quite

Starting point is 00:03:55 as rapidly but in a very similar fashion and it is stating again because of these interest rates so if the Fed is pointing their focus on stopping inflation, it does likely mean that the interest rates are gonna continue to increase and the recession is inevitable. Realtor.com is actually saying that there is the lowest mortgage applications in the last 22 years.

Starting point is 00:04:20 Now, this is a direct reflection of interest rates. In fact, one of my close friends who really studies the Phoenix market very heavily actually was bringing up a very good point in our discussion when I was asking what he's seeing specific to Phoenix is I believe Phoenix is that market that is really on the pulse of what is happening to the real estate economy. And what he mentioned was over the last 30 to 45 days, there has been no more increase in volume of homes that have been listed on the market. It is actually a massive decrease in the buyers. Now, Phoenix has been like at an all-time low for the

Starting point is 00:05:00 last give or take a year where they've roughly had anywhere from two to three thousand listings at any given point that is an all-time low it is a not not a healthy market at all very much a seller's market and so things would just not stay on the market because there was just a supply and demand issue well all of the sudden in the last 30 to 45 days we've broken the 10,000 listing mark. Now, that is getting closer to making it a healthy market where it's a buyer's and seller's market. That number hits around 30,000 active listings. But what he saw by looking at the data is the number of new listings hitting the market didn't increase as much as the lack of buyers

Starting point is 00:05:42 being able to make offers. Now, as we sit here, some things that you and I are feeling real time, obviously, is the pricing of consumer goods, as well as, let's just say, gas. In fact, an article actually just came out that June of this year, 2022, actually has the lowest consumer purchases since the 1980s. Since the 80s. Now, that is a direct reflection of the cost of goods, which again goes right back to all of what we are talking about, which is interest rates and the cost of goods and commodities, such as gas. We're at $6 a gallon for gas. For the first

Starting point is 00:06:21 time, I'm breaking well into the triple digits, well over $100 to fill up my Range Rover. Everyone is feeling the pains, not just the housing market, but quite literally consumers across the nation are feeling this pain. Now, one of my favorite articles that I actually read was a Bloomberg article. They were actually talking about how landlord buyers, landlord investors, people just like you and me have been biding their time. They've been waiting for moments like this so that they can come in and buy more rentals. American Homes for Rent actually is fielding calls daily from new home builders looking to sell off their inventory. Now, this is a great sign for us real estate investors and why I say it's so important for you to be at the Real Estate REI Masterclass, which is the two-day event, June 24th, 25th,

Starting point is 00:07:13 in Scottsdale, Arizona. This is not all doom and gloom. In fact, if you are positioned right, this could be a huge advantage for you in real estate. Again, regardless of you building out a business like mine, making seven figures a year, and it's a full-blown business, maybe it's a side hustle, or maybe you're just looking to make money on your money, meaning ROI, right? Put your money to something that can give you an ROI. Any of those reasons will tell you you need to be at the REIMasterclass.com event in Scottsdale, June 24th, 25th, because there is some silver lining. There are going to be some really great opportunities for me, you, and some of the bigger companies to really jump into the real estate space. You see, we all know this. We all need a place to live so if interest rates are at a price that is

Starting point is 00:08:06 unaffordable for most to buy a home well then they're going to be forced to rent and even rental rates are increasing during this entire thing which is another point i didn't even make yet in this episode but we all need a house we all need somewhere to lay our head. So for those that are fortunate enough to understand how to take advantage of the opportunity that the market is getting more difficult in the real estate space, then we need to know when the right time is to strike. Now, here's what I would tell you. Many, many people try to time the top and time the bottom. I don't believe that's the right piece of advice. I do believe you're going to find great buys. I mean great buys as the market might be shifting

Starting point is 00:08:52 downwards. Do you need to wait until the all-time bottom? I would argue no because a great buy is a great buy. There is going to be a lot of value to add to the real estate space if you are positioned right to buy these as long-term rentals. Now, a lot of questions get posed about this. Is the financing going to be there to be able to buy these at a good number so that the mortgage payment and the rental payment can make sense? I understand some of that. I would argue there's opportunity to raise private funds. There's opportunity to partner with people on these where there's no interest rate and it's actually a partnership deal. There's going to be a lot of these opportunities that are going to

Starting point is 00:09:34 spawn up and it's very real time right now. The bigger businesses like American Home for Rent, Blackstone, and so on and so forth, they are not slowing down at all. If anything, they are raising more and more money so that when the time is right, they can jump in and take advantage of everything that is happening right now. I don't want you to be so fearful because what is out in the news. I don't want all this news, which I just literally quoted like six or seven different articles right now, because that is all we see in the news. And I'm not a big believer in news, meaning I don't watch it.

Starting point is 00:10:11 I'm not saying it's drastically incorrect in terms of the interest rates rising, gas prices rising, yield curve going down, and all this other data I'm telling you. They're reporting the data, but they're creating a spin that can be very fear--mongering I'm not trying to do that for you guys I'm trying to let you know there's a lot of opportunity it is a reality but it does give a lot of opportunity for the right person my hope is you are that person as I mentioned we all know where the mass volume of the millionaires are made, in what industry, it's real estate. So this isn't a time to be fearful. It's a time to pay attention.

Starting point is 00:10:51 It's a time to be dynamic. It's a time not to be stuck in your old ways and maybe create new opportunities for yourself. This is your time to learn how to pivot, what to do. Again, even if maybe you want to go buy a couple rentals in the next year, this is how you want to do it is being at that event so you are up to date with what the experts know. Hopefully, this episode was not too fear-mongering. I'm just reporting some of the news that is out there that is very fear-mongering,

Starting point is 00:11:20 but it is enlightening to know that there is a silver lining, that the buyers are actually there they're just not in the form of owner-occupied they're the landlord buyers make that a focus especially if you're a wholesaler again guys my name is Justin Colby I'll see you guys at the rei masterclass comm get your tickets now there's only two seats available and I'm sure after this episode, they will be gone. TheREIMasterclass.com. Two full days with me. If you're a VIP, that's three.

Starting point is 00:11:49 I look forward to seeing you guys there. Peace.

The Science of Flipping - BIGGEST Housing Market Recession 2022 | How To Survive Economic Recession

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