As this year quickly winds down, many people are taking this time to reflect on the good and bad developments that occurred in the past year. They’re also thinking towards the upcoming year with regard to their goals or potential opportunities.
What opportunities are out there for you this year? And will you take advantage of them?
If you’re looking to get into real estate — or even if you’re looking to try out a new strategy with your real estate investments — maybe 2017 will be your year. Interest rates are still low, property values are on the rise, and we now have a president with experience in business and real estate.
Economy and the Election
How the results of the election will impact the economy, as well as the real estate market, is not yet known. In regard to my business, especially this year, this is still one of the most common questions fund investors and note buyers ask me.
To be honest, the election surprised me as much as the next person. I went to bed expecting one outcome and woke up to a different landscape. Like I told my youngest son before the election, as crazy as what I’m going to say sounds, it’s more about how we react to what happens than the actual events (especially those outside our control) that occur in life. If something positive happens, be ready to take advantage of that opportunity. If you encounter adversity, learn from it, try to be creative, and you may become a better person in the long run. I don’t know anyone who’s become legendary in any aspect of life who had all things come extremely easily.
After the Dust Settles
I’ll be the first to admit that the current landscape is unprecedented. Sometimes change is welcomed, and sometimes it’s necessary. Many challenges are still facing us and our leaders today politically, economically, and socially. But there may be some good changes on the horizon that would impact those in real estate and note investing.
As a small business owner with 30 employees, lowering corporate taxes could help us. So could revisiting the high cost of healthcare insurance, especially since our rates increased dramatically last year. I would love to see a total revision of the current healthcare, insurance, and pharmaceutical game in this country, which seems very unscrupulous and unfair. Healthcare is one of the only businesses (besides going to college), where the consumers can rarely figure out what things really cost or are going to cost them.
No one thinks that banks need to be held accountable and that consumers need to be protected more than me. But I do believe the pendulum of regulations has swung too far in this country. It has literally crippled the lending business, and many folks, especially the self-employed, still can’t get mortgages and business loans. Revisions in these areas could be beneficial to real estate investors if banks not only feel it’s easier to release their distressed assets into the marketplace, but also feel that they can start to lend again with more types of responsible lending.
Dodd Frank absolutely had as many negative impacts as it did positive, and in many ways, it made the largest banks much bigger to fail, while at the same time wiping out the seller financed industry, which had absolutely nothing to do with the crash. Sure, we would all like to see responsible, well underwritten loans, but it would be nice to see some relief on the lending requirements side too. That being said, the new administration seems to recognize that the financial industry is over-regulated, which may lead to future changes.
When you factor in a change in government due to a pro real estate president with a same party congress, with a pro-business attitude, maybe there is some hope for small business in this country.
Can more jobs be brought back or created? Time will tell. Will there be inflation and higher rates? I’m not sure, but I do know real estate is a good hedge against inflation. And notes are also backed by real estate.
Real estate values are also on the rise in many areas. This has led to an increase in pricing for mortgage notes, but it has also increased the value of our portfolio. Like they say, “High tide raises all ships.”
So, if you’re new to real estate investing, why not pull the trigger on your first deal this year? Don’t let fear or uncertainty keep you from trying something new, whether that’s real estate, taking a course, traveling somewhere, or meeting new people.
What opportunity, or opportunities, will you create for yourself this year?
Let me know your thoughts with a comment.