What's stopping you?

Question

I've spoken to several investors over the last several weeks and many of them are not moving forward due to fear.  This isn't a guess, many will straight up admit they are scared to move forward.  Each particular fear is easily overcome, but still the general fear remains.  So, for you new investors I ask, what is stopping you from "taking the leap"?  How can I help you overcome that obstacle?  If you're at the edge and can't make the leap, shoot me a DM and we'll jump on a call or something.  REI has changed my family's trajectory in the best of ways and I want it to do the same for you!

Nathan Gesner · Answer

This depends. Some are fearful because they're new and literally scared to make a mistake that could impact their lifestyle or the welfare of their family. Some are "fearful" because the market is at a peak, people have been making emotional, financially unsound decisions over the past two years, and it doesn't seem like a good time to invest. In today's market, I think both could be rational and healthy.

When others are greedy, be fearful. When others are fearful, be greedy.

For the past two years, the entire country has been greedy. Tons of new investors have been spending equity gained by pure fortune, not skill. People are buying vacation rentals in markets at twice the price the same houses sold for three years ago, based on rental income numbers from a record market in 2020/2021. It makes sense to be "fearful" during this tumultuous times and wait for things to settle.

We'll see a market correction and then those of us that are patient will pick up some sweet deals again.

Billy Daniel · Answer

I think there's definitely going to be some effects from the bear stock market felt in real estate.  I heard today the @Dave Meyer expects home prices to be negative 5-10% next year.  He's probably right...for some places.  The hyperlocality (that's word now) means that even if things go south, some markets will rise or stay level.  I know that I can expect my local market to be lower than whatever the national average is (in the good ways and the bad ways).  Others know their local market will exceed the national numbers.  A local expert should be able to help you navigate "market conditions".

In fact, a local expert can help with a lot of "newbie" concerns?  Need financing options, here are some people I've worked with.  Need a contractor?  I like these guys for the type of work you need.  Worried about what things will look like in 12 months?  We all are, but this deal makes sense now.  Worst case, you have an asset that can be sold.

My point is that fear is not a good reason not to invest.  Logic and math are good reasons, but not fear of the unknown.  If you're convinced housing will crash, then you probably have a logical explanation for that.  Being afraid isn't good enough.  That only leads to regret at not taking the leap!

Jaron Walling · Answer

My 9-5, W2 job is slowing me down.

I'm on my work computer and thinking about the 8 ceiling lights, drywall repairs, paint, and bathroom vent to be installed.

The stock market? I just looked at my TD Ameritrade app... you can't hide anywhere. The correlation between the stock market and real estate lags 6-12 months. The money is drying up.

Sam Bhattacharya · Answer

The stock market has been in bear market territory for some time now.  Some of us think the real estate market may follow suit.

By the way, how much of a correlation do people think there is between the stock market and the real estate market?

Max Lichtenstein · Answer

I am generally just scared I do not know enough. The fact I might miss important pieces of REI is probably my number 1 fear. I want to buy a 2 unit apartment and I have an idea of when I want to do it. But I feel like I am not taking the correct steps.

Any advice?

Thank you

Paul De Luca · Answer

But as of late many people are fearful, so doesn't it make sense to be greedy right now?

What's stopping you?

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