{"id":142421,"date":"2022-04-11T15:07:27","date_gmt":"2022-04-11T21:07:27","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=142421"},"modified":"2023-03-18T13:41:04","modified_gmt":"2023-03-18T19:41:04","slug":"investing-strategies-2022","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/investing-strategies-2022","title":{"rendered":"Smart Investing Strategies for the 2022 Housing Market"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC6724767754&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n<p><span style=\"font-weight: 400;\">When I started my real estate investing journey in 2002, I didn\u2019t have any training or a real estate license; like lots of folks starting out, I learned a lot as I went. At that time, the <a href=\"https:\/\/www.huduser.gov\/periodicals\/ushmc\/spring2002\/nd_hm.html\" target=\"_blank\" rel=\"noopener\">median price for new homes<\/a> increased to $182,700 during the first quarter, which was up 8% from the first quarter of 2001. The average monthly rent price was just $658 dollars, which was a 3.95% increase from the previous year.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Fast forward to now, twenty years later: here in Phoenix, where I live, the median list price in <\/span><a href=\"https:\/\/www.redfin.com\/city\/14240\/AZ\/Phoenix\/housing-market\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">February 2022 is $438,000<\/span><\/a><span style=\"font-weight: 400;\">! That\u2019s an increase of 30.7% compared to <\/span><i><span style=\"font-weight: 400;\">last year<\/span><\/i><span style=\"font-weight: 400;\">!<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you\u2019re looking to get into real estate investing, these numbers might send you running for the hills. But the good news is, you<\/span><i><span style=\"font-weight: 400;\"> can<\/span><\/i><span style=\"font-weight: 400;\"> invest in the market, you just need to have a strategy in place.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I recently joined a new podcast from BiggerPockets, <a href=\"https:\/\/www.biggerpockets.com\/blog\/category\/on-the-market-show-notes\" target=\"_blank\">On The Market<\/a>, where Dave Meyer, myself, and a host of phenomenal panelists talk about what is going on in the market right now<\/span><span style=\"font-weight: 400;\">. One of the first things we discuss is how someone can <a href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-2#\" target=\"_blank\">get into investing in real estate this year<\/a> with all the challenges the current market brings.<\/span><\/p>\n<p>Here&#8217;s my take on how to master the market in 2022:<\/p>\n<h2><b>What the Current Trends &amp; Predictions Mean<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">So what is the <\/span><a href=\"https:\/\/fredblog.stlouisfed.org\/2022\/03\/is-the-housing-market-as-wild-as-it-seems\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">landscape of real estate investing<\/span><\/a><span style=\"font-weight: 400;\"> right now? <\/span><span style=\"font-weight: 400;\">Three words: buyers are buying!<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The reasons for it are simple:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">They\u2019re taking down tighter deals<\/span><\/li>\n<li><span style=\"font-weight: 400;\">They\u2019re buying on speculation<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Inflation<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Buyers aren\u2019t dumb, so they\u2019re pulling the trigger on deals today instead of waiting. There\u2019s tremendous volume and activity because of current market conditions. We already know that there was a <\/span><a href=\"https:\/\/www.redfin.com\/news\/record-home-sales-forecast-2021\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">17% year over year gain<\/span><\/a><span style=\"font-weight: 400;\"> in home sales at the start of 2021. This was following a tumultuous year, resulting in supply chain issues across the board which <\/span><a href=\"https:\/\/www.businessinsider.com\/home-construction-materials-shortage-supply-chain-home-depot-congress-2022-1\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">affected home construction in high numbers<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But Jamil! <\/span><a href=\"https:\/\/www.piie.com\/research\/piie-charts\/forecasters-underestimated-us-inflation-2021-and-are-now-revising-2022\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">What about inflation<\/span><\/a><span style=\"font-weight: 400;\">?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The world is crazy right now, and <\/span><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-03-10\/u-s-inflation-hits-fresh-40-year-high-of-7-9-before-oil-spike\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">prices have risen across the board<\/span><\/a><span style=\"font-weight: 400;\">, which is a huge factor in housing and the broader economy. But here\u2019s the thing\u2014the federal reserve will aggressively raise interest rates, but while supply chain issues were a huge challenge in 2020 and 2021, at some point, they have to settle down. <\/span><span style=\"font-weight: 400;\">At the same time, the world is starting to open back up and people are feeling a lot more comfortable in this \u2018new\u2019 normal as they say. When it comes to housing, there\u2019s a lot of liquidity and hard money rates are low.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">That\u2019s why buyers are buying right now\u2014they\u2019re seeing the <\/span><a href=\"https:\/\/time.com\/nextadvisor\/mortgages\/mortgage-news\/dont-wait-to-buy-a-home\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">same speculation, they\u2019re reading the same reports<\/span><\/a><span style=\"font-weight: 400;\">, and they\u2019re acting on all of that information. So if buyers are buying during this time, how do new and seasoned investors combat the challenges and hurdles?<\/span><\/p>\n<h2>Strategies for Overcoming Current Market Challenges<\/h2>\n<p><span style=\"font-weight: 400;\">The consensus is that there are no deals. Here\u2019s the thing\u2014despite all of these hurdles, I\u2019m still getting deals. People I know working the landscape are getting deals. It can be done, but you need to have a strategy\u2014especially in this climate\u2014to ensure you\u2019re getting the right deals.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The question is \u201chow?\u201d <\/span><span style=\"font-weight: 400;\">How am I getting deals in such a volatile market?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are two tactics that you should learn and follow:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">There is always an opportunity for potential<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Learn to underwrite<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">Having a strategy is important because it helps you understand who\u2019s sitting at the table; if you think of the market as a giant dinner party table, you\u2019ll likely have your normal eaters. But now you\u2019re starting to see \u2018professional eaters\u2019; these are the secondary buyers who are gobbling up all the homes right now.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Professional eaters have caused the primary buyers to pull the trigger on buying a house. But that\u2019s where a strategy comes into play, because if you know who\u2019s at the table, that makes it easier to serve the normal eaters, while letting the professional eaters eat whatever they want.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s talk about these strategy tactics.<\/span><\/p>\n<h3><b>Opportunities for Real Estate Potential<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Everyone is talking about low housing inventory, but in reality, they\u2019re talking about a completely different product: retail product, the type of houses that have already been improved. The type of deals that I, as a wholesaler, am going after are <a href=\"https:\/\/www.biggerpockets.com\/blog\/hidden-value-distressed-properties\" target=\"_blank\">distressed properties<\/a>.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While pandemic-related supply chain shortages have affected the availability of new builds, there\u2019s still plenty of opportunity when looking at distressed properties. In fact, for many folks, the pandemic has made it more necessary to to wholesale their homes.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Wholesaling can be a divisive topic, and I\u2019m certainly not advocating being a predator; that\u2019s not how I work and that\u2019s not how many of my partners and team members work. <\/span><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.biggerpockets.com\/blog\/real-estate-593\" target=\"_blank\">When done in an ethical manner<\/a>, wholesaling deals give everyone a win\u2014winning for some people looks like being paid 100% of their as-is value. These are the opportunities and the potential opportunities new and seasoned investors should be going after.<\/span><\/p>\n<h3><b>Learning the Art of Underwriting<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The second most important strategy point is to<\/span><a href=\"https:\/\/www.biggerpockets.com\/blog\/what-is-underwriting\" target=\"_blank\"><span style=\"font-weight: 400;\"> learn how to underwrite<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When you\u2019re able to figure out and understand how much something should cost based on where it is currently, you\u2019ll easily be able to spot the potential.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Underwriting means doing your research and learning the value of properties, which will then lead you to understanding the consequences of overpaying and the consequences of getting a good deal. Once you know how to leverage that knowledge, you can make money when the market is depressed and you\u2019ll make money when the market\u2019s hot.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When I first started, I had a lot of leverage but I didn\u2019t know how to mitigate it. I\u2019ve used those situations to better understand the market and learn how to spot potential opportunities so that I can use the market to my benefit.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite the unexpected surprises that the last few years have brought, there are still opportunities to be found. <\/span><span style=\"font-weight: 400;\">The market is always changing, so it\u2019s important to be aware of what\u2019s happening. Smart buyers are always investigating, reading, and learning. As wholesalers, fix-and-flippers, realtors, or investors, we need to be doing the same.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">My one big takeaway is this: learn. Learn everything you can about the market, the trends, predictions, etc. Podcasts like <a href=\"https:\/\/www.biggerpockets.com\/blog\/category\/on-the-market-show-notes\" target=\"_blank\">On The Market<\/a> are incredible resources<\/span><span style=\"font-weight: 400;\">, because you\u2019re getting advice from<\/span><a href=\"https:\/\/www.biggerpockets.com\/blog\/biggerpockets-podcast-300-invest-real-estate-ultimate-show-started-josh-dorkin-brandon-turner-11-rockstar-investors\" target=\"_blank\"><span style=\"font-weight: 400;\"> experts and professionals on what they\u2019re seeing<\/span><\/a><span style=\"font-weight: 400;\">, how they\u2019re working in the market, advice on how to work in the market, etc.<\/span><\/p>\n<p>The housing market will continue to change, but don&#8217;t let that scare you away from investing. <span style=\"font-weight: 400;\">As long as you have the tools, the strategy, and the determination, you\u2019ll succeed in anything you do.<\/span><\/p>\n\n\n<div class=\"wp-block-group border border-gray-200 p-6 rounded-md has-slate-50-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow\">\n    \n  <div \n    id=\"segemnt-view-event-block_624f52525847f\" \n    class=\"  \"\n    x-intersect:enter.once=\"\n      analytics.track('On The Market Blog Sponsor View', {\n        referrer: 'https:\/\/www.biggerpockets.com\/blog\/investing-strategies-2022',\n              })\n    \">\n    \n  <\/div>\n  \n\n\n<h3 class=\"has-text-align-left mt-0 wp-block-heading\"><strong>On The Market is presented by Fundrise<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png\" alt=\"\" class=\"wp-image-142373\" width=\"256\" height=\"63\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-300x74.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-768x189.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black.png 1380w\" sizes=\"auto, (max-width: 256px) 100vw, 256px\" \/><\/figure>\n\n\n\n<p class=\"mb-0 wp-block-paragraph\" style=\"font-size:16px\"><strong>Fundrise is revolutionizing how you invest in real estate.<\/strong><\/p>\n\n\n\n<p class=\"mt-0 has-slate-600-color has-text-color wp-block-paragraph\" style=\"font-size:16px\">With direct-access to high-quality real estate investments, Fundrise allows you to build, manage, and grow a portfolio at the touch of a button. Combining innovation with expertise, Fundrise maximizes your long-term return potential and has quickly become America\u2019s largest direct-to-investor real estate investing platform.<\/p>\n\n\n\n<div id=button-custom-event-block_624f4a1837234 class='button-custom-event'>\n      <a href=\"https:\/\/t.sidekickopen84.com\/s3t\/c\/5\/f18dQhb0S7kF8cpngfW16gy-_59hl3kW7_k2841CX6NGN35Qwt3rN_mgW56Jw3w1HcgXpf197v5Y04?te=W3R5hFj26QkH2W4hJTY63T3pkxW3Fbt5S3Cdl5cf49M_4s04&#038;si=8000000019411002&#038;pi=6988e0ed-1aea-4af5-9769-8a0de4675eeb\" x-on:click=\"window.analytics.track(&#039;On The Market Blog Sponsor Click&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/investing-strategies-2022&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\" rel=\"noopener\">Learn more about Fundrise<\/a>\n  <\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>When I started my real estate investing journey in 2002, I didn\u2019t have any training or a real estate license; like lots of folks starting out, I learned a lot [&hellip;]<\/p>\n","protected":false},"author":613610,"featured_media":142432,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7119],"tags":[],"class_list":["post-142421","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/142421","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613610"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=142421"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/142421\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/142432"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=142421"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=142421"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=142421"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}