As a real estate investor and licensed Realtor, I receive about a dozen inquiries a week asking me if they should wait for a drop in real estate prices. I have had people continually asking me this question since 2011, when I started buying and recommending real estate investments again.
Here is the bottom line: If investors or potential home owners wait until prices collapse (if they ever on the scale of 2008) They won’t be able to get houses anyway, unless they have cash. Lack of access to credit was why they collapsed in the first place. Lack of credit access will be the reason for the next bust.
Here is an example of one property I purchased last year in an all-cash deal. The numbers are explained in detail. I produce a 16% capitalization rate on a condo built in 1998. This is one example of a number I now own.
Identical properties in this development sold for almost 300k back in 2006-2007. The real estate collapse destroyed condo prices in Suburban MD, and many developments lost FHA certification, meaning that owner-occupied buyers could no longer get FHA and HUD mortgages. So, cash and conventional loans were the only ways to buy. Prices dropped from 250k to as low as 60k in 2012.
Yes, that is correct. It was a self-feeding loop, and the carnage was unprecedented. It still lasts today. Common charge delinquencies and large investor ownership were the primary causes of loss of FHA certification. But, before Obama left office he changed FHA condo development requirements from >50% owner occupied to >35% owner occupied. This means that buyers can qualify for FHA loans even if 65% of the condos in a project are identified as investor owned. Within a year, prices rose by as much 30-40%.
Rents were 1,100 in 2011, they are now hitting 1,600, and I get tons of responses from desperate people looking to pay it.
Remember, real estate is a bundle of rights, and if prices fall, the Feds will stand in to hand out more tax benefits.
So, I go across the twitter feeds like:
He has been pumping out tweets and blogs since at least January 2016, warning everyone to watch out below.
This scares the crap out of most people and keeps them on the sidelines waiting and waiting. The globalists like these people who dispense gloom. His confirmation bias is seductive to the patriots.
Remember, there is a lot of money to be made if you are not picky and can pick up on how to operate rentals for a business. Like the old saying goes, “there’s a lot of money to be made in s%*t.”
There are always boom-bust cycles. The next one will not take place the way the last one occurred. I think of all the lazy real estate “analysts” who just pick at stuff from the last cycles and throw it out for the reasons on the next cycle.