this is weird | housing market disarray / crash

hey everyone me Kevin here coming to you

with another full self driving video on

something weird going on in the

marketplace now this is going to be

mostly anecdotal though I'm going to tie

some of this in with the data uh as you

know I've been traveling the entire

country studying the real estate market

I am not just sitting looking at charts

I am looking at charts and out on the

ground in person talking to Realtors to

buyers I mean course members and other

buyers out on the street who are like oh

I'm buying here's my situation what do

you think of this house it's kind of

crazy every time I go travel somewhere

so I was like it's me Kevin and then we

talk about their situation I love seeing

you all out there but what's weird is

there is a big disparity in who's buying

today and and how they are buying so let

me clarify this first of all when I see

how they are buying I am regularly and

this is insane to me I am regularly

coming across other buyers who are all

cash buyers but they're not the listing

agents are telling me when we're writing

offers as house hack because we are when

we're writing offers they're like oh my

God thank you for actually having cash

in the bank and not being another BS and

they'll actually say it like they're

pissed another BS cash offer because

what's happening is people are coming in

they're writing offers on fixer-uppers

and I've always had there's always

competition I want to be very clear

about that okay we we've gotten in like

the three weeks we've been trying we've

gotten three smoking hot deals already

and we're like half trying okay like

we're we're not even like all in on

trying yet and it's going very well

already uh the three Deals we've already

got are probably each over 120 000

wedges so they're going really good

the problem that we face well it's not

really a problem

how economy face

the people who are going out of the way

their way to do hard money financing and

they're saying they're cash offers but

they're still contingent upon a hard

money Finance deal and these people are

speculating now fortunately we're still

getting deals because a lot of the

agents are like I don't trust this crap

but some of the deals that we've lost

we're losing to hard money deals and we

see them fall out again and they come

back to us for example the last one we

got I helped firm up my numbers I'm like

watch guys they'll end up coming back

that other deal is going to follow

through and they'll come to us that's

exactly what they did

but there are many more that are closing

to people who are purely lip speculating

and let me give you some of the terms

you ready for this

three points so you spend six hundred

thousand dollars with Renovations at

three points you're paying almost twenty

thousand dollars in loan fees just to

get a hard money loan and now you're

paying 14 interest uh that's what some

of the terms are that I'm seeing and now

and they'll Finance everything for you

but at 14 you're paying eighty four

thousand dollars a year interest only

just to hold that property works out to

about thirty six hundred dollars a month

once you add in property taxes and

insurance you're probably about forty

five hundred dollars a month add to that

you know Renovations and all this stuff

you've got you've got a big leak and if

you can't profitably sell that property

especially going into now the winter

months where I think prices will

probably be slightly up to flat and this

is really the opportunity to buy you're

betting at the spring Market will be

hotter now I don't care because we're

buying long-term buy and holds but some

of the people speculating right now I'm

like this is crazy I think some people

out there are thinking it's going to be

2021 all over again when rates come down

and I don't think so I think we're much

more likely to be back to a 2012 uh or

even a 2011 where in 2011 we're kind of

like okay prices bottomed the year

before in 2010 and now they're kind of

up and now they're letting them down

you're pretty volatile in 2011. as

inventory was up but more buyers were

coming out right and that's something

that could happen here is you can see

rates fall which leave more buyers

coming out but also more inventory

coming out so you get almost this this

vacillation this volatility

but it's not just that speculation that

I see which almost in some cases reeks

of desperation it's almost like some of

these flippers are like I made so much

money in 2020 2021 2022 now I just need

to get any deal just give me any deal

and even if I make 20 grand please it'll

let me survive a few months longer

that's what it feels like

so again it's great for house hack

because we're only going to do deals

where the numbers make sense and then

otherwise I'm just not going to buy

properties when they don't make sense we

buy within our wedge and we have no

problem getting deals but this is an

example of what I'm seeing in certain

areas and what's interesting is the

speculators are not everywhere for

example they are not in Oregon in Oregon

I don't know what it is with that market

and if you look at the actual data

you'll see more price drops weaker price

growth and more Supply

compare Oregon to San Diego okay that's

where apparently all the speculators are

or even like Fremont California which I

don't really want to buy in there anyway

but uh the rents are just too low but

you have people who are even home buyers

doing this kind of speculating on these

hard money loans and it's just insane so

I'm worried that this is a little bit of

a sign that people are kind of on their

last legs as competing buyers that's an

opportunity for people with capital

deploy obviously like house hack but it

is a risk that uh I highly recommend

people do not engage in I highly

recommend do not speculate with hard

money loans to where you're overpaying

for deals trying to make 20k that's

stupid you honestly should not be

touching a deal unless you're making a

hundred grand per 500k invested that's

my POV what up uh so so anyway and

that's how you know obviously I hope to

IPO house hack at one at some point in

the future is by taking properties

people can't live in and turn those into

functional on the market supplied

properties but anyway that's something

I'm noticing throughout the country is

this the speculation has sort of ramped

up but the speculation is only in the

roughly under certainly under the 1.2

million dollar Mark but only 1.2 million

once you start getting into NorCal most

Market it seems to most markets that

speculation stops about 800k and there's

plenty of speculation in the 400 to 600

000 range because the monthly payments

just aren't that bad

even with a hard money loan in those

price ranges so for example I just went

through a multi-family building that was

actually Four single families and it's

2.8 million dollars and it's just

sitting and I'm like well it's kind of

no surprise it's just sitting because

the type of buyer who would buy this

isn't here so that makes me much

certainly like I'm like it's not gonna

work for me either you know I'm not

gonna overpay for this but I find it

very interesting because even though

we're we're getting plenty of deals

there is this weird stretch going on and

to some extent you see that happen in

every Market certainly in 2021 people

were doing this as well where they're

speculating oh prices are going to

Skyrocket and that worked out well

but if you combine that with the

speculation you've seen in Airbnb I

think some Real Estate Investors are

probably going to be hit in the face

with the reality over the next year and

I don't think that's because prices are

going to plummet you know there are

plenty of home buyers who are going to

absorb this remodeled Supply but

remodeled Supply that has to sell you

want to know a market where that's

exactly happening in my opinion

look at Palm Desert it's a super high

Airbnb Market you got to be really

careful about these markets this is all

the kind you know look in like 10

minutes here I'm trying to give you a

synthesis of what I'm seeing on the

ground and with the data with a real

experience as an actual investor not as

a chartist who's only telling you oh

homeowner affordability is really bad no

duh have you looked at interest rates no

doubt on a homeowner affordability is

really bad yes rents have gone up but

not as much to make make buying make

sense at these rates but before

speculating rates are going to come down

if they do they'll be right and those

charts won't matter but what is a real

problem is the potential Airbnb bust you

look at Palm Desert remodeled home after

remodel home on the market in fact

there is one home on the market for

every about

150 people who live in the Palm Desert

compare that to San Diego or like Chula

Vista where there is one home on the

market for every 3

000 people

that means you have roughly 30 times as

many homes per capita in Palm Desert on

the market as you do in Chula Vista gee

why is that well Palm Desert is a

vacation destination for Indian Wells

the tennis competition uh Coachella it's

an Airbnb Market that shit's

danger stay away okay like I would not

touch that with a 10 foot pole right now

and that's why they say all real estate

is local you can't just you know draw

like take a big fat paintbrush and go

everything sucks or everything's great

you gotta be really careful

uh then you look at like an organ where

it's just like okay well why is that so

weak it's not an Airbnb Market it's like

people aren't speculating there or or

people aren't even wanting to invest

there because maybe the long-term

rentals and vacancy rates are worse

that's another thing you have to

consider when you buy real estate would

you rather buy real estate in an area

where the vacancy rate is two percent or

where the vacancy rate is 10 percent

Colorado has a vastly different vacancy

rate than South Florida

okay or or San Diego for example you

look at uh look at uh like a mid Market

you've got somewhere around 500 to a

thousand homes on the market that's like

your your Utah's other parts of Cali

whatever you've got about

um sorry one home on the market per 500

people that's like more normal maybe one

home per thousand people uh more normal

Chula is one extreme and then on the

Other Extreme you got Palm Desert

so the point of this is to say

I don't think that we are set up for

this

broad-based massive disastrous crash in

the real estate market

but I do think certain areas are going

to have a lot harder of a recovery and

if you are investing you want to make

sure you're investing and getting good

deals not in markets that are tanking

right because then you're not really

getting a good deal so you want to be

getting good deals in hot markets

ideally well certainly there's this

balance of like what was it a bubbly

Market but fundamentals will tell you

that fundamentals will tell you do

people want to live here what are the

jobs why are people moving here what are

the median incomes what are the poverty

rates remember people always say like oh

but this area is up and coming does a

person with a 700 Plus credit score want

to rent in an up-and-coming area

no they want to rent in a nice area and

then you have a tenant that pays the

bills and takes care of the property

right you buy properties in up and

coming areas or dying towns because the

cash flow is slightly better you're just

signing up for a higher vacancy factor a

higher eviction factor a higher repair

and damages factor and you're just

making your life more miserable

point is you've gotta I mean maybe just

watch this video back or you know sign

up for the courses on building your

wealth link down below we got an

expiring coupon later today you already

know the drill email us at Staffing me

kevin.com if you want to bundle up so

you're at a millionaire real estate

socks psychology money everything I want

to give you the straight scoop look what

gets the most views on YouTube right now

is everything is going to hell it's the

the worst real estate recession is

coming and you're finally gonna have the

great reset opportunity to buy a cheap

home

I'm gonna give you the reality some of

these markets are legitimately and

fundamentally doing substantially better

than others

that's just the way it is that's the

reality and other markets are going to

suffer

so it is not one size fits all anyway

thanks so much for watching I'll keep

you updated appreciate you and we'll see

you soon thanks so much check out the

courses below thanks so much and uh we

might do on a house hack update supposed

to be the fundraise is this September

2023 September and uh we are probably

going to offer the shares to course

members only since it's going to be at

that one-to-one valuation so you're

better off using the expiring coupon

code uh to get in so you make sure you

have access because once we're out of

shares that we have allocated with what

the SEC allows you to sell in this right

hey there's a limit that's it and it's

gonna be course Members First so anyway

thanks so much we'll see you soon bye