The Great Real Estate Crash Reset | DO THIS NOW

oh boy there are going to be some juicy

opportunities coming up in real estate

in this video as I head to the airport

to go check out more real estate we want

to break down where those opportunities

uh might be first and foremost a lot of

folks are looking at Price action and

are wondering hey if December was the

bottom where is there an opportunity

today especially when inventory is still

as low as it is in fact months Supply is

maybe at similar levels to the last two

years but actual standing inventory is

somewhere around 20 to 30 percent less

than where we were in the last two years

which the reason for that is less people

are buying how could there potentially

be an opportunity and there are a few

different opportunities there's the

commercial side where you've got

potentially opportunities in medical

building conversions that's a big deal

right now probably a much bigger

opportunity than you've got in just

getting into the good old usual pandemic

Airbnb play

the other opportunity in my opinion is

actually renaults your classic not fix

and flip style properties now the reason

they said not Fix and Flip is because in

a high interest rate environment you

take on a lot of risk flipping real

estate in fact I generally never

encourage flipping because you're too

subject to Market risk but there's

something very unique about the profile

of people who are actually buying homes

today most of the people were on

autopilot by the way full self-driving

here supposedly but we got a beautiful

iPhone mount as well so we can pay good

attention most of the people buying

today

seem to be folks who not only have the

ability to repay given that our non-qm

our non-qualified mortgage levels are

less than five percent which basically

means 95 of people have not only the

ability to repay which I guess to some

regard you need to have the ability to

repay for a non-2m loan as well but the

point is 95 plus percent of loans are

actually your conventional normal debt

to income ratios which means people

could actually afford the homes they're

buying right now which is mind-blowing

because homes seem very unaffordable

right

but because people are so stretched in

terms of okay we can afford it but now

that's it like we can't afford any more

in that regard we don't have a bunch of

extra cash to do Renovations what kind

of properties are creating the best

opportunities to buy

it's fixers The Wall Street Journal just

did a fantastic profile on home buyers

that were actually seeing buying homes

today and most of them are people who

are either Tech couples or in some sort

of software business uh they're

entrepreneurs or their employees

software companies they're making great

W-2 incomes and what they're doing is

they're betting they're making a bet

they're saying look we think rates are

going to go down let's buy the home we

want now and then we'll hoddle it that

limits a real price Discovery because

people are already betting that rates

are going to come down which obviously

the longer rates stay higher the worse

it is for Real Estate but not only are

people making that bet which minimizes

some of that potential pain that you

would otherwise experience in real

estate fewer people are selling but

here's what's happening the people who

are buying wanting to buy based on that

Wall Street Journal profile and what

we're seeing in the markets and what

we're talking to Realtors about so

getting anecdotal evidence on is people

are wanting to buy move in ready

properties that's because the type of

person who's buying these properties and

can qualify at these prices is not

interested in doing renovation work to

try to make an extra Buck they'd rather

work more at the job they're doing than

you know try to make a buck doing paint

carpet and electrical stuff and dealing

with contractors and all the headaches

that they don't want to deal with

so what this actually does is you're in

this weird real estate environment where

many markets had a big correction last

year somewhere up to 20 Boise Austin

Phoenix Florida not so much and you're

still seeing some residual of that some

of these markets still down 10 uh from

their Peak in May of 2022 that's already

giving them some credit for appreciation

this year anyway what you're finding is

that even in these markets you're

putting a floor under real estate prices

because of the lack of willingness to

sell homes

and on the flip side because of buyers

willingness to bet that the real estate

pain will be transitory

so this then sets us up for two

potential Avenues to take for actually

buying Real Estate Avenue number one is

you just sit around and wait forever the

risk of waiting forever is as rates

normalize and as even inventory

normalizes you end up with a balanced

Market that either stays flat or slowly

Trends up again that is a risk right

you're upside risk uh of course the hope

is that you're going to have some kind

of big 20 30 real estate correction and

while we already had that in certain

markets like Boise Austin and Phoenix

that's probably behind us

so the other potential Avenue is all

right well look if you're not going to

have a big crash again beyond the

pricing correction that you've already

had where is the leftover opportunity

well I mentioned one is medical

opportunity potentially converting

Office Space or commercial space to

Medical but the second opportunity is

buying fixer-uppers because you have

less people flipping homes right now you

have a lower appetite for people to

actually get into real estate why would

you have a lower appetite for people to

get into real estate well because

a people don't want to do Renovations B

rates are high and when you have a less

interest in doing renovations and rates

are high and affordability is really

really stretched the only people buying

are the people who are like I don't want

to do any work then what you do is you

kind of sliver out a section of the

market where people aren't playing ball

and I don't expect people to play a lot

of ball this winter and that's why I

think come this October probably all the

way out to about February we're going to

be in a unique buying window where we're

going to have a Confluence factors fancy

work we're going to have this collection

of factors that say okay this could be

really good now let me break down what

those are

inflation by I mean think about it by

November we should be pretty comfortable

that we're at Peak interest rates

inflation is over and we're trending

down we should be very comfortable with

that in fact we should also have some

gauge as to how bad is the unemployment

issue going to get the things we're

gonna get to four four and a half

percent does that mean we're going to

end up getting to five and a half

percent and they'll end up having

overcorrected we should have a lot of

that Intel by October November December

well in October November December the

people who generally sell are not

discretionary sellers they're people who

have to sell trust sales hoarder homes

uh you know basically properties that

need to sell fixer-uppers but you're

still going to have high rates which

means low investor low to no investor

competition investors already falling

off a cliff nobody wants to flip right

this this is a great opportunity

potentially uh and you should be on a

trajectory to rate declines which should

be supportive to not only you buying a

good deal this winter but then

potentially having Tailwinds after the

fact again predicated on unemployment

not going to the Moon so obviously if

unemployment skyrockets and we have a

really big recession well then we've got

bigger problems right and we have actual

problems that we really have to get to

the bottom of uh and that could take

years

personally I don't believe that a

recession is imminent I think that a

recession is likely but I think that the

inverted yield curve could be telling us

that a recession is still two years away

I know that's crazy to think about but

it could be two three four five years

away we don't know there's this massive

lag and unknown consistency of that

inverted yield curve and one of the

reasons why the inverted yield curve

always seems to be right is because

people stretch out how soon that

recession needs to happen sometimes you

get an inverted yield curve you get a

recession within 12 months sometimes you

get an inverted yield curve and you

don't get a recession for like 56 months

which if you think about it that's like

four point what seven years you know

that would be like a recession in 2027

right

that could happen

so when we put together the data not

necessarily that we have now we don't

want to play Crystal Ball

but when we get to October I think we're

going to be looking at a market where

we're like okay

the people who are buying who are

supporting home values don't want to do

Renovations that's an opportunity in a

single family and multi-family space

investors aren't flipping right now

because it's a risky time to flip you'll

still have high rates so a lot of people

are gonna be like oh brother we're off

with my treasury yields than buying real

estate which I think is a

probably not the best idea mostly

because with real estate you know the

benefits of uh depreciation for your tax

benefits look at the medical properties

trust I mean they they take like a 300

million dollar loss uh for well I think

this morning we analyzed it in the

course member livestream it's like a 340

million dollar loss for depreciation uh

depreciation when you add that back in

that's what they're basically paying out

in dividends I mean it's remarkable

anyway ignoring the medical properties

trust for moment I do think there's some

opportunities there ignoring that for a

moment uh look it's the the Tesla lot

this by the way right here is the law

there's nothing in front of me dude

everything's fine

uh this by the way here I don't know if

you can see it there's a lot right here

and they drop off the Teslas here and

sometimes this lot is full and they grab

them like two or three at a time drive

them across the street to the delivery

Center anyway I love seeing it because

it keeps like gets filled up and then

it's sold fills up sold it's kind of

cool but anyway uh you have this

potential joining factors here that says

man you know depreciation leveraged

appreciation uh uh you know probably

already experienced flattened rents so

then you'll get back to rental

appreciation when you add all of these

factors together real estate is

potentially setting up for glorious

opportunity I don't think it's going to

be a you know 2008 style opportunity at

all and that's okay because think about

it in 2008 you don't have liquidity so

in 2008 you might be like yeah I want to

buy homes in 2008 but look I became a

broker in 2008 uh well in in that 2008

recession arrows after 2008 I became an

agent broker but anyway what I realized

was people didn't have money so uh when

people didn't have money what do you

stuck with well you're looking going man

these real estate prices are so low but

you can't buy anyway you can't buy

because nobody's got the money to buy

now we're actually in this really neat

place where a there is money to buy and

B you potentially combine that also with

an opportunity to buy which I'm really

excited about so uh you know for me I'm

jumping up and down thinking this winter

season could be a big opportunity we'll

obviously see uh how things evolve here

but uh I gotta go catch a plane now

which is pretty exciting so let me know

what you think in the comments down

below see a lot of uh negativity out

there on the real estate market and I'm

personally not seeing it uh at least not

that bad I see it as an opportunity

rather than super bad so we'll see but

again I want to hear what your comments

are let me know what you think get my

little iPad Mini over here and go read

while I'm on the plane and study some

more see you soon bye