Real estate is a great way to build wealth, but it comes with a fair amount of questions to navigate. In this week’s episode of the Wealth Builders Podcast, “Real Estate Roadmap: Your Questions, Our Answers,” host Karen Conrad Metcalfe welcomes real estate experts Frank Pulley and Troy Peterson to share their insights about the current market outlook, investment opportunities, and property market dynamics. Whether you are a new investor or a seasoned pro, you will want to hear the answers to these burning real estate questions. Click here to listen to the podcast now, or read our detailed shownotes below.
Real Estate Market Forecast
- The real estate market is likely to experience a downturn in the next couple of years, but it will not be severe.
- The market is expected to vary from region to region, with some areas continuing to experience price growth.
- There are still opportunities for investors.
- Education and research are important in order to find the best deals.
Opportunities in the Current Market:
- New builds that are offering incentives such as interest rate buydowns.
- A strong rental market will give investors new opportunities.
- Even with new opportunities, it is important to be selective.
- Consider niche markets, such as vacation rentals or student housing.
Benefits of Real Estate Investing
- Real estate investing can offer a number of benefits, including:
- The potential for high returns on investment
- A steady stream of income (through rental income)
- Appreciation in the value of the property over time
- Tax benefits
How to Get Started in Real Estate Investing
- Educate yourself about the market.
- Develop a clear investment plan.
- Do your research.
- Get pre-approved for a loan.
- Make an offer on a property.
- Close on the property and start building your real estate portfolio!
Types of Real Estate Investments
- There are two main types of real estate investments: buy-and-hold rental properties and flips.
- Flipping properties can be more profitable, but it is also more risky and requires more expertise.
- Rental properties can provide a steady stream of income, but they also require more management.
Importance of Education Before Investing in Real Estate
- It is important to get educated before investing in real estate to avoid making costly mistakes.
- There are many resources available to help you learn about real estate investing, such as books, seminars, and online courses.
Navigating Seller Psychology
- Do not be concerned about low offers but focus on gathering information for informed decisions.
- Focus on figures and buying right as the key to making money in real estate.
- Some local investors are paying above the market value in a rush to secure properties.
- Bartering and haggling can result in a favorable deal.
- Investors should not to be afraid of hearing “no.”
- Remaining open to negotiating can lead to substantial savings.
Insights on Making Offers
- It is important to focus on the numbers.
- Leave a little room for negotiations, but not much.
- Do not become emotionally attached to a property.
- Writing a detailed explanation for a low offer can soften the blow and be helpful in negotiations.
- Real estate agents who invest in property themselves can improve the chance of successful negotiations.
Impact of Rent Controls During COVID
- The COVID pandemic and rent controls affected some investors’ properties.
- Many landlords had minimal issues.
- The media may have inflated the impact, particularly in places like New York and California.
Exploring Commercial Real Estate
- Commercial real estate is a unique facet of the real estate market.
- The performance-focused approach to financing is an advantage of commercial property.
- There is potential to take over loans with the bank’s consent.
- Lease structures like the triple net or double net lease can be appealing.
- Understand the game before venturing into commercial real estate.
Balancing Flips and Buy-and-Holds
- Consider Dan Dyer’s formula to flip one property, then buy-and-hold the next.
- Consider a cyclical strategy combining both flipping and buying and holding.
The Ultimate Goal: Building an Orchard
- Accumulate enough buy-and-hold properties to reduce the need for flipping.
- There is long-term wealth-building potential of a rental property portfolio.
Property Value Trends
- There are challenges predicting a house’s worth in the future.
- Local real estate markets and their distinct trends influence these trends.
- National news and local conditions may differ.
- Study historical pricing trends and compare them with current market values.
Seeking Divine Guidance
- God wants you to succeed in real estate.
- Seek God’s guidance when entering the real estate market.
Signs of Community Investment
- Signs of community development and investment are companies like Starbucks or Walmart moving in.
- There is potential for increased property value in areas with new commercial developments.
Challenging the Four Times Median Income Rule
- Focus on maintaining positive cash flow in real estate investments.
- Evaluate property investments in pricier regions.
- Assess property condition and location as key factors.
- Consider the retirement community factor and vacation rental potential in coastal areas.
- Conduct local market research and hire an experienced real estate agent to make informed decisions.
Assess the Seller’s Situation
- Tailor your approach based on the type of property listing, whether through a realtor, for sale by owner, or creative financing options.
- Remain transparent in obtaining vital information from sellers.
- Be sensitive to potential sellers’ circumstances when evaluating a property.
- Identify key indicators that can reveal urgency or motivation to sell.
Research Property History
- Utilize online resources like Zillow or realtor.com to investigate property histories.
- Gain insights into a property’s buying and selling history, which may indicate the seller’s position.
- Recognize patterns such as a property being listed for a higher price than what was paid, suggesting a potential negotiation opportunity.
Exploring County Records
- Employ county records to uncover property ownership details.
- Distinguish between investor-owned properties, individual-owned properties, and estates.
- Highlight the potential opportunities associated with estate sales when heirs decide to sell.
There is so much great information in these shownotes. When you have a moment, listen to the full podcast here for even more valuable insights.
With so many opportunities in the current real estate landscape, we want you to be well-equipped to take advantage of them. Consider enrolling in the Real Estate 101 Masterclass where you will have an opportunity to receive group coaching to help you meet your real estate goals next year.