*MASSIVE* Housing Liquidations JUST Started.

entire housing communities are being

liquidated by the nation's second

largest homebuilder we're going to talk

about just that in this video with my

commentary note today is December 9th

which means the coupon code PP linked

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before pricing changes all right folks

take a look at this this in my opinion

is pretty dang intense look at what we

have here Lennar the nation's second

largest homebuilder offers 5

000 homes to investors with buyer demand

sliding okay now we're going to explain

this a little bit but what I first want

you to think about is why would a home

builder decide to bulk sell inventory

usually when you bulk sell inventory

like this first of all stuff like this

sounds really enticing to house hack but

we're not buying yet it's too early to

buy I'll talk about when when the time

devise but usually when discounts like

this are offered they're in the

neighborhood of 20 to 25 percent in

exchange for the seller getting a a

quick sale and number two not having to

process individual deals home builder

cancellation rates are at two to three

times the level they were last year so

every deal every individual deal they

sell is a lot harder to sell now the

problem with this for the home builders

is for them to sell 5 000 homes on the

open market they're basically

introducing more inventory to a

declining market and they push prices

down as they compete with each other and

introduce more inventory put more

inventory on the market quickly let's

say you're a home builder you've just

completed a Housing Development and you

think oh my gosh I've got to somehow get

100 of these 50 homes sold but then I've

got five other communities have all 150

homes and then there are 10 other home

builders in this neighborhood with 150

homes each all of a sudden if we all put

our homes on the market we'd have five

to ten thousand homes on the market in

in just a concentrated region it could

be a state or the southeast or Southwest

or whatever what happens all of those

home values then start sliding even more

one of the reasons we actually haven't

seen as much of a slide yet as interest

rates are so un Inc or actually I should

say incredibly unaffordable one of the

reasons we haven't actually seen the

real slide yet is because people aren't

wanting to sell so think about that

homeowners don't want to sell because 95

percent of them have a lower interest

rate than what Market rates are today so

the people who are selling are either

investors who are dumping now

unprofitable airbnbs as the Airbnb

bubble is popping you've got home

builders who are selling because they

have to sell they're not landlords they

don't rent out properties they have to

sell them that's just the way it works

or you've got people who have to sell

for other reasons divorce death

inheritance uh people will downsize

whatever you have the removal of housing

stock or I should say households from

the market leading to fewer demand for

rentals and homes to live in as people

consolidate into households Millennials

and Millennials stay at home longer

whatever right so on one hand you have

fewer people wanting to buy rates are

high fewer household form be wanting to

be formed fewer households being formed

then on the other hand with the housing

market on the seller side the only

people who really have to sell right now

are again the ones that we've mentioned

home builders being one of the biggest

cohorts of that

the problem though is if those home

builders put their properties on the

market and then you accelerate a slide

of home prices which are down already

say eight percent you get into uncertain

escrows that might take you another 60

to 90 days and then let's say somebody

walks away in January or February after

potentially the Federal Reserve has

hiked another 100 basis points right two

more times two more rounds of 50 basis

points we're up another 100 basis points

inflation doesn't come down these all

just become really toxic assets for the

home builders and they're going to take

a big L on them anyway potentially 20

percent not just because home prices

might be down 20 but because convincing

skittish home buyers in a potentially

saturated new development or new region

with so much home building with homes

creates more fear and that fear itself

can lead home prices to go down even

more rapidly so again Nationwide we've

seen home prices decline somewhere

between 8 to 12 percent in some areas

you've seen home prices decline a little

less and some a little bit more but in

home builder markets you've got to be

very very careful as a buyer right now

because the builders realize if we put

this stuff on the market we will crash

these local housing markets so what are

they trying to do they're trying to

offload thousands of homes as package

deals to institutional landlords let's

go through the article Lennar

Corporation one of the biggest it's the

second U.S home builder by the way is

offering to sell thousands of homes to

rental landlords at a time when sales to

Everyday buyers have slumped now again I

don't think it's time to buy it I think

you start opening the Valley of the time

to buy potentially Q3 Q4 of 2023

although the housing market might not

end up bottoming until 2024 or 2025.

this is why with my housing startup

househack we are not buying it we are on

standby and we're going to wait for

various specific indicators to help us

indicate when we might be at a bottom

one of the biggest inventory or one of

the biggest indicators is inventory

declining but you have to be careful

because you can't just look at inventory

declining alone because guess what's

happening right now inventory is

partially declining right now because

home sellers are taking properties off

the market home builders are taking

properties off the market trying to sell

them through basically like the dark

pools of real estate directly to

institutional uh landlords it's really

really incredible so what you have is

the people with cash have major

purchasing power right now major major

purchasing power they've got a lot of pp

massive PP so huge never seen it PP that

huge uh it's it's really really

incredible so if you have cash you're

you're winning right now and you're in

no rush to wait but again indicators

over bottom would be not only inventory

declining but also fear has to decline

so you need inventory declining fear

declining the way you measure fear

declining is by pending home sales

indicating more multiple offers at

competing prices again if you combine

multiple offers competing prices the

speed of sale is starting to go up and

those in escrow prices are starting to

Trend up at the same time as inventory

is going down you will notice where the

bottom of the market is

3 6 9 months before the National

Association of Realtors realizes that in

their official data okay these are very

very simple things these are things I

teach in my real estate investing course

look real estate is is bread and butter

for me it's it's a cakewalk it's easy I

really really enjoy it anyway Lennar is

circulating lists of properties to

potential acquirers according to people

familiar with the matter who've asked

not to be named because the process is

private many of the properties are

located in the southwest and Southeast

this is probably like North Carolina

Phoenix Vegas you know these are some of

the areas that have really blown up

Austin Cedar Park right outside of

Austin and Texas with the builder giving

landlords the chance to acquire our

entire subdivisions in some cases so in

other words you just have a hundred

percent renters in an area which that

could actually create issues uh when you

have let's say a community that is owned

by one large entity uh and oftentimes

that entity owns more than 10 percent of

the homes obviously in this case they

probably would you could actually run

into financing issues with conventional

financing so you have to be careful

generally conventional financing

requires diversity of home ownership and

not like institutional control in one

neighborhood that's deemed too risky

they want to see very they want to see

high home owner occupancy ratios usually

over 50 especially for condos and even

in housing neighborhoods generally they

want to see especially in homeowners

associations less than 10 ownership by

one entity so these these these

subdivisions could really run into some

financing issues in the future unless of

course they just stayed rentals forever

but that could also then lower their

value because generally you want to be

renting property in an area that's a

really heavily owner-centric because

owners invest in their properties they

over improve their properties much more

so than tenants do I mean tenants might

change like doorknobs and wallpaper or

whatever and then we're converted back

after they leave or leave it if the

landlord's okay with it but you're not

talking about like tens of thousand

dollars tens of thousands of dollars

going into new driveways roofs facades

uh hardscaping you name it all right

let's continue on with the the piece

here a representative for Lennar said

the company offers single-family

landlords a chance to buy unsold

completed homes as well as homes that

are nearing completion yeah this is

really just the Builder saying look

we're going to take a massive write down

on our inventory which is known as the

Builder backlog in this world we're

going to take big write down so why

don't we just sell them at a discount

now then we'll have cash so when when

the dip dips we're armed and ready to go

buy more lots and develop again and do a

better job in a better time this is just

all about deploying Capital some of the

home builders have actually fallen so

inexpensively on the stock exchanges

that they've actually considered just

buying back their own stock they're like

let's just dump the real estate we have

and we'll just buy back our own stock uh

because we we value the assets we have

under management basically higher than

what we value our pipeline which is

quite crazy but anyway a representative

for Lennar said the company offers

single family landlords the chance to

buy unsold completed homes as well as

homes that are nearing the completion

okay perfect the most recent inventory

list had about 5 000 homes the

representative said though the number

changes monthly the average price of a

home Lennar sold in the third quarter

was 491 000 that gives the properties

currently on offer to landlords a

potential value of roughly two and a

half billion dollars

man this like that is a huge amount of

properties oh my gosh like I dream in my

lifetime we'll be able to have billions

of dollars under management at house

hack but we're you know we're we're

starting with maybe a hundred million

dollars of purchasing power right gotta

get that PP up though buyers generally

demand significant discounts from retail

prices yeah again usually you see 20 to

25 although if if you know I had

hundreds of millions of dollars and I

was in the buying mood I'd probably be

more aggressive with those negotiations

in fact I'm really good at negotiating

with real estate uh so I I'm confident I

get a pretty good deal for uh for

investors

uh but again we're not in the face of

buying just yet it has been a turbulent

year for home builders who saw frenzy

demand for suburban homes slow sharply

when mortgage rates soared High

borrowing costs pushed home buyers to

cancel contracts leading Builders to

abandon deals to acquire land Lennar

isn't alone in recent months Builders

have sought bids from rental operators

on at least 40 000 homes wow wow

Builders collectively forty thousand

homes my goodness I mean on an average

year the the number of homes that sell

is somewhere probably will be somewhere

around four and a half million uh homes

over the next year because home sales

have plummeted but to think you know 40

000 is a lot because it's a Delta

difference right it's it's just under

one percent

uh but the point is that's another one

percent across the United States however

these 40 000 homes are probably almost

all concentrated in Texas Arizona Nevada

and probably like North Carolina I don't

even know if Florida is part of that

which is which when you put it that way

you know those markets probably only

represent uh you know what three out of

50 and then even potentially less

because you have States like California

they probably really only represent uh

somewhere around four percent of Total

Home Sales in which case if those States

represented let's just even for simple

math call it five percent of Total Home

Sales right just those States uh that

would be let's see four and a half

million times five percent that would

work out to 225 000 homes now all of a

sudden now you go 40 000 homes as a

ratio of 225 000 homes now it's a 17

change in potential inventory that's

what I'm saying it's because these homes

are all concentrated in specific areas

that's why you're having the Panic many

of those properties had been under

contract with individual buyers who

walked away from purchase agreements

yeah I mean it's just it's buyers buyers

suck right now because they're all

fearful like you you can't trust them as

far as you can throw them which honestly

is not bad like if you're a buyer who

canceled the deal you should feel proud

of me saying that because you're making

the smart decision in my opinion not to

be buying right now I want to be clear

look I am a licensed financial advisor

but this is not personal financial

advice for you okay if you need personal

help you should consult a professional

directly about your specific situation

although if you want to learn a lot zero

to millionaire real estate investing I

expect would help you tremendously use

that coupon code expiring tonight link

down below many of those properties have

been under contract single family

landlords have been eyeing Builder

inventories for months with some like

industry giant Invitation Homes seeking

to raise new funds to pounce on Opera

opportunities that's true those darn

suckers are gonna just keep growing that

Goliath I mean you gotta admire it they

they were funded by so much Wall Street

money I just I gotta hand it to them

they're killing it uh transactions have

been muted as investors wait for greater

Clarity on interest rates and for prices

to come down Lennar has raised a money

to acquire rental houses tapping

Alliance real estate and Center Bridge

partners for 1.25 billion in equity

commitments oh my gosh so this is really

interesting Lennar has raised money to

acquire rental homes

uh okay yeah this is for their other

subsidiary okay so Lennar has a rental

division but then they have the Home

Building Division so my expectation is

the single family rental division is

going to be a separate entity they want

to raise money for that but why wouldn't

maybe Lennar the builders just sell to

Lennar the renters uh division

because they're bad deals probably he's

like come on like that should be the

biggest red flag right there like the

rental division doesn't even want the

Lennar properties and they're part of

the same company right now

uh has been a cautious buyer yeah

exactly see they're they're uh their

rental division has been a cautious fire

the company sold about a thousand rental

homes in its Fiscal Court or third

quarter with most of those properties

going to outside investors wow they've

actually been offloading their rental

properties too uh that is uh unless they

mean they sold a thousand rental homes

for two like thousand completed homes to

uh uh to to other land boards that might

be because they say here rather than to

Lennar single family rental operation

but again it just shows you those are

hot potatoes you don't want them right

now anyway our program has taken a very

disciplined approach to stepping back

and waiting for the market to reconcile

itself yeah yeah contrary to what you

might have thought we're probably

selling less to our own program and more

to other sfr programs I know that's like

so weird it's because y'all are

basically saying hey you should buy this

but we wouldn't touch it with a 10-foot

pole man I I don't know about that I

mean like I guess on one hand I get it

but it's just that should be such a big

red flag the other company should be

demanding such massive discounts anyway

my thoughts check out the coupon code

link down below thank you so very much

for watching this video New York Stock

Exchange was such an honor today thank

you to all those of you who came out it

was a blast Jack do you have anything to

say

bye Jack says buy don't point that in

your eyes son all right thanks everyone

have a good night bye