The Backstory to Now…. Clients who hire me to coach them before and during their first investment property transaction ask how and when and where all the money came from Wall Street to buy so many thousands of rental homes. Answering them takes patience and detailed explanations as this is the first time in history such a platform of investment has occurred on such a massive scale. This WSJ article does a solid job of discussing the backstory, the history, and leads with some hints about where the industry of property leasing is headed. After all, big investors have plopped $40,000,000,000 into buying 200,000 houses as rentals. Some questions for you to ponder as you read the article: As a small, private investor: How can you compete with these powerhouse-landlords on pricing, marketing, and profit margins? As a property manager: What lessons can you take away from the article on […]
Unemployment is down. The Stock Market is soaring. Everyone is happy. But should they be? It’s times like these when that trusty Spidey-sense starts to tingle…play the real estate investment game long enough, and you see the telltale signs of impending mayhem ahead: Everyone and their brother suddenly thinks real estate is easy money. (We can tell by the phone calls and referrals we get on this qualitative point. And the calls and referrals are coming hot and heavy right now….) Folks who shouldn’t be buying rental properties are buying them up faster than Fidget Spinners. (Always a dead give away when the question gets asked,”How many months of PITI do you have in reserve for when this property goes vacant?” and the buyer has that deer-in-the-headlights-look.) Banks easing their lending standards to allow for more marginal buyers. (No income, no doc loans are back. Yes, seriously, they are.) Yup….it’s […]
I was chatting with a lady at a local association meeting who was nervous about her retirement coming quickly in less than 10 years. She was, as many folks just like her, not prepared financially to put up her spurs and sip on a fruity beverage on a beach. After lots of dialogue, it hit me like a ton of bricks. This person owned zero real estate besides her home. And she is a licensed REALTOR. Why would a person in the industry not take advantage of the unique opportunity they have to increase their wealth? It boiled down to ignorance and fear for her. Literally sat there shaking my damn head…. So, the question on the table is this: Should you invest in rental properties for income when you retire? My short answer is this: 90% of you in this audience probably fall into the damn ignorant stupid foolish category if you […]
“There is a shortage of quality rental housing.” Fist pump time if you’re a Landlord or Investor. That’s the overall opinions of some of the top managers of large, institutional portfolios of single family residences (SFR). Here’s the link to the brief article: http://nreionline.com/single-family-housing/top-sfr-owners-plan-grow-2017 It indicates, if demand for SFR’s remains stable, that rent prices should remain solid and absorption rates should be strong. What it also, indicates however, is that these same large institutional portfolios have new targets–YOU. As a smaller operator of SFR’s, you are seen as the enemy. You’re the competition. You’re who they want to gobble up or squash out of the rental game. So here’s the question for today: These portfolio managers have the spare cash, the human resources, the advanced technology, and the patience to crush you. How do you plan on continuing to compete against them? Go Guerrilla Warfare style against them. Here’s […]
If you own or are considering owning high end apartments as rental properties, do yourself a favor and check out this article from the WSJ. When a reporter uses vocabulary including “rough conditions” and “slash rents” and “deep concessions” and “glut of supply” ALL in the same sentence, that’s a not-so-subtle hint of the valuable information in the news article. Luxury Apartment Boom Looks Set to Fizzle in 2017 – WSJ Certainly, every market segment from first-time renters to move-up renters to empty-nesters has an ebb and flow to it. It’s capitalism and the forces Adam Smith described centuries ago. What you do with this information is the critical point and take away. Depending on your current interests, this could also be a buying opportunity for some savvy investors to pick up units from distressed landlords. As always, here’s to your pursuit of Financial Freedom!
Why do sooooo many investors lose money on real estate? ….Because They Buy: The Wrong Real Estate At the Wrong Time For the Wrong Reasons In the Wrong Way From the Wrong People In the Wrong Location Using the Wrong money/financing The investors who have epic failures typically combine more than one of these reasons. Don’t be an epic failure. Be an Epic Success by getting educated and being disciplined.
ARGGHHHHH!!!!! Economic uncertainty is nobody’s friend but lately, if you watch the talking heads and read the mass media pundits, you would think the world is coming to an end and the rapture is here. I’m not so certain these folks are using the correct lens to look through for their prophesies…. This article by David Lynn, Ph.D., covers some of the flight and self-preservation concepts very nicely. He also reminds the reader that business is a cycle with repeatable stages of peaks, contractions, troughs, and expansions. “So where are we now?” is the BILLION dollar question, isn’t it? Here’s Dr. Lynn’s conclusion for those of you who don’t care to read the entire article: We are in a very unusual situation in that the normal pattern of oversupply has not occurred in this real estate recovery. This bodes very well for the real estate market. Over-supply has always killed […]
Here’s the YTD stats for the Indianapolis area through October. Still solid demand, although we are monitoring Zionsville closely as the DOM has ticked up there, perhaps due to the trepidation of the election overwhelming folks lives last month. indy-rental-stats-ytd-thru-october-2016 While you’re reviewing the numbers, how about you help your friend learn about real estate investing by forwarding this email to them so they can subscribe, too? (It’ll make you rich….it’ll make you thin. It’ll make you rich and thin.) (ok….it won’t make you thin, but the rich part is highly likely.)