July 30th Update; Important Real Estate and Housing Update – A background to the future

I have uploaded a new Real Estate and Housing update podcast for July 30, 2018. Click here to go to the show archives page to listen or you can listen on the link below.

-Do a Google news search of “housing market” and every story on the first page paints a picture of doom. MSM is pointing us in a certain direction. The market is turning now.
-Sales are dropping off as predicted and it is not because sellers are few. Supply will emerge as investors begin to unwind. The percentage of units owned by investors will always be greater than reported.
-Despite what many in the alt-financial media proclaim, money is hard to come by. Many of my properties can no longer be used as collateral. Hard-money lenders are becoming much more discerning. What was collateral 2-3 years ago can no longer be used.
-Higher interest rates do not necessarily mean lower prices. We must analyze why rates are rising in the first place. Rates rose profoundly in the late 70’s yet prices still rose.
-Tax policies profoundly impact real estate prices.
1986 Tax Reform Act
1997 Taxpayer Relief Act
Tax Cuts and Jobs Act of 2017
-The latest round of tax changes is beginning to put a dent in higher-priced, owner-occupied housing. This will trickle down to working class areas. It already has begun.
-The 1997 Taxpayer Relief Act created a huge economic sector (home improvement and residential RE speculation). Home Depot would only be a mid-sized retailer, not a Dow Blue-Chip, but the cap gain exclusions created a huge economic sector that did not exist prior. Homeowners have become home-flippers, because of the cap-gains exclusions.
-The Bush Sr. Cabal (e.g. Carlyle Group and Blackstone) made billions buying up real estate in the wake of the TRA of 1986 inspired bust. It almost brought down Prudential Securities.
-Next downturn could be more like the late 80’s-early 90s, than last decade. But, the opportunities will flesh out and will be many.
-Real Estate management takes a lot of knowledge and since time is our most precious commodity it is always a good time to begin investing in real estate. However, now is not the time to invest in a big way. Learn from hands-on experience and when the cycle turns we must be ready. Get your feet wet now.
-I have not bought a new property since Spring 2016. I was buying in 2011-2015. I had two fallouts in the past year as I decided the market dynamics were changing. Many new investors are currently bidding up investment properties. This was just like in 2005.