WHO IS BUYING vs WHO IS WAITING FOR THE SALE TO BEGIN?

General Real Estate Investing
5yFollow

WHO IS BUYING vs WHO IS WAITING FOR THE SALE TO BEGIN?

Diana Dorantes
Rental Property Investor · Channahon, IL · Member since 2018 · 161 posts · 103 votes

Hello Bigger Pockets! I know the market has been pretty hot overall this past year.  With that said, wanting to know if there are areas within the US where investors are still buying, cautiously buying or waiting for the sale to begin.

Personally in the areas I'm looking, last year was able to get 3 properties.  This year I'm hard pressed to find a property that makes sense.

15Reply
281 views

Most Popular Reply

Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
5y

What sale lol? Here is the M1 money supply chart.  That sale should be in like what a decade after this increase in the money supply?

[email protected]301-893-4635Podcast Guest on Show #192
District Invest Group545 Reviews
WebsiteView Page
34Reply
See this reply in the discussion

107 Replies

Jump to latestLatest
  • Brandon Koster
    Member since 2016 · 31 posts · 50 votes
    5y

    I too would like to buy during a possible coming crash - but I think the crash is slightly less likely than it seems on the surface.  More likely is the government prints a ton of new money and inflation happens instead of a crash.  In that case - people are going to desperately wish they had kept buying.  Owning real assets is the best hedge against inflation.  It just all depends on that the government does.  I would not turn down any good deals now in hopes of a crash, but I would also be very selective and only buy where I can get really high rates of cashflow.

    29Reply
  • Jason Hopkins
    Investor · Memphis, TN · Member since 2016 · 549 posts · 286 votes
    5y

    The Memphis market continues to be hot.  I'm personally buying now if the numbers makes sense and will continue to buy if and when a crash happens.  

    22Reply
  • Brandon Koster
    Member since 2016 · 31 posts · 50 votes
    5y

    I should have also mentioned - with foreclosures and eviction bans most likely to be extended to September - the overall economy will be in a far better place at that point because everyone who wants to be vaccinated will be.  I believe there will be massive short-term economic growth at that point and huge positive sentiment in the real estate market.  Will the un-freezing of the market in September and the flood of inventory be enough to counter-act those positive forces?  That's the million dollar question.

    4Reply
  • Diana Dorantes
    OP
    Rental Property Investor · Channahon, IL · Member since 2018 · 161 posts · 103 votes
    5y

    @Jason Hopkins, @Brandon Koster I wholely agree with you both, plan to stay on the lookout for good properties whether I come across now or in a few weeks or a few months.  Keeping my eyes and ears open for possiblities. 

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y

    What sale lol? Here is the M1 money supply chart.  That sale should be in like what a decade after this increase in the money supply?

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    34Reply
  • Zachary Beach
    Specialist · Los Angeles, CA · Member since 2018 · 291 posts · 231 votes
    5y

    @Diana Dorantes this is the sale don’t miss out! The money supply has been permanently increased prices are up less than the increase of money and interest rates are staying low for the near future, maybe decades. Last year was the worst year for real GDP since 1946 if not for the increase in money and lower rates the prices would have dropped.

    5Reply
  • Colton Potter
    Rental Property Investor · Chilliwack, BC · Member since 2019 · 20 posts · 9 votes
    5y

    I'm in Canada but its been a similar situation for me. SFH inventory are at record lows and I'm hard pressed to find deals that fit my criteria (BRRR, 15% CoC). Luckily, I do everything remotely so I'm positive I just haven't looked and networked enough.

    I'll keep looking and purchase deals as they present themselves, regardless of the upcoming sale that will happen at some point.

    2Reply
  • Melanie Dupuis
    Investor · North Bay, Ontario · Member since 2019 · 221 posts · 99 votes
    5y

    @Diana Dorantes Always buying in all types of market cycles. That's the beauty of being a buy and hold investor.

    12Reply
  • Cliff C.Pro Member
    Rental Property Investor · Spring Hill, TN · Member since 2015 · 45 posts · 12 votes
    5y
    Originally posted by @Russell Brazil:

    What sale lol? Here is the M1 money supply chart.  That sale should be in like what a decade after this increase in the money supply?

     Thanks for posting this. Would you mind explaining a little this impact will have?  What is this data telling us?

    Thanks!


    Cliff

    3Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    5y

    What Russel is pointing out is that because the FED has been "printing" so much more money in 2020 the "value per dollar" has to go down - aka inflation.

    Personally I have been waiting for inflation for years now, but it is becomming much more likely now - Ray Dalio has been speaking about this multiple times in the last few months. If you don't him he is the founder or the worlds largest hedge fund and global economic thinkers. Also wrote some pretty fantastic books..

    Inflation means that prices for goods and assets go up, profits and wages should follow. Most of the properties we own were built back in the day for $30,000 - which was a lot of money back then. You accelerate that - inflation.

    @Zachary Beach you make an interesting point, I have not taken it that far in my mind yet, but I have to do some thinking on this. I have posted several videos on my YouTube channel talking about market data and why I don't see a market crash comming. 

    In short, compared to 2008:

    1.) This time, the demand is real. It is driven my Millennials starting to buy houses. And we don't have supply, because old people live longer and healthier.

    2.) This time, people have equity in their homes and low utilisation rates on home equity lines (HELOCs)

    3.) This time, affordability is good, in fact better than any year in the last 30 years with the exception of 2010-2012.

    4.) This time, inventory is VERY tight - we had a massive overproduction in 2004-2007 and have seen inventory levels rise every year. Empty houses sitting on the market, 6+ months of supply. We are now at 1.9 months of inventory as a country, under one month here in Milwaukee.

    Prices will continue to go up. 

    20Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y
    Originally posted by @Cliff C.:
    Originally posted by @Russell Brazil:

    What sale lol? Here is the M1 money supply chart.  That sale should be in like what a decade after this increase in the money supply?

     Thanks for posting this. Would you mind explaining a little this impact will have?  What is this data telling us?

    Thanks!


    Cliff

     The US money supply has increased by trillions of dollars, in a pretty short period of time. As this money circulates, it's going to find its way into markets and get spent. Its going to put inflationary pressure upward wherever it ends up.  3 places where it is highly likely to end up, and already is showing up is in the stock market, bond market and real estate. 

    We increased the money supply in 3 months as much as it was increased in a 3 year run from 2008-2011. Now I have a colleague that says we dont get inflation if there isnt also a corresponding increase in demand....but we have also a huge increase in demand, with a housing shortage.  Theres something like expected housing starts at 1.5 million expected for 2021, and we need an additional 8 million to meet demand.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    6Reply
  • Nick Barlow
    Warsaw, IN · Member since 2017 · 229 posts · 270 votes
    5y

    @Diana Dorantes what @Brandon Koster said-I’m buying if a deal makes sense. I think the government will backstop prices with continued low interest rates. Combined with lack of inventory, prices aren’t going down, in my opinion, for another year or so.

    4Reply
  • Tim Cassels
    Mystic, CT · Member since 2020 · 14 posts · 6 votes
    5y

    I'm keeping my eyes out for a situation where if inflation and asset prices start to run too hot, and the Fed steps in and indicates a rate hike. Not sure if a rate hike would decrease prices though in the short term if demand increased with expectations for higher rates coming.  

    2Reply
  • Spence Rodman
    Investor · Olive Branch, MS · Member since 2016 · 20 posts · 18 votes
    5y

    @Diana Dorantes I am in the Memphis metro area and I bought 5 houses from September to December last year and have 1 under contract now. I plan to buy deals that make sense any time they come along. I am a long term buy and hold investor and plan to ride any downturn to the bottom and back up.

    6Reply
  • Zachary Beach
    Specialist · Los Angeles, CA · Member since 2018 · 291 posts · 231 votes
    5y

    @Marcus Auerbach something to think about is that within supply and demand you have more layers of supply and demand. Increasing the money supply has increased the amount of money people have to buy properties either directly through the loan amount they can qualify for being greater or stimulus money they have been paid. Or indirectly from the increase of profit from there busyness from the price increases or increase in there asset prices which they can sell or borrow against to increase their purchasing power. Remember that demand is willingness and ability. The ability of tens of millions of people that want to buy property just increased. Also keep in mind that when asset prices increase only a small amount of the assets in the class are being traded but all are considered to be worth more the new price creating the feeling of greater wealth all around and increasing asset prices even more. Additionally the things that are important in creating supply being land in desirable places, materials, labor,as well as regulations and building codes they are more costly and difficult to acquire in many areas.

    1Reply
  • Stephen KeigheryBusiness Member
    Rental Property Investor · New Orleans, LA · Member since 2018 · 717 posts · 555 votes
    5y

    @Diana Dorantes I am buying and waiting. I find my own off market deals so it helps in this crazy market.

    Home Buyer Louisiana4.850 Reviews
    WebsiteView Page
    2Reply
  • Dennis Wayne
    Member since 2020 · 339 posts · 356 votes
    5y

    I could go into a long winded reason with graphs statistics etc on why waiting hoping things change in the market doesn’t work but I’ll just go on record saying you should always buy . Look the reality is You can’t win monopoly by continuously passing go and sitting on your laurels ..you must buy assets to win and do it in all cycles . Down markets are just better times to buy .

    10Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    5y

    I know people who've been waiting for the market to correct since 2015. I'm just not in favor of timing the market. It leads to too many sitting on the sidelines. Of course, in a really hot market like this one, you should be very cautious, but I would still be buying.

    Podcast Guest on Show #121
    16Reply
  • William Alexander
    Investor · Asheville, NC · Member since 2015 · 10 posts · 7 votes
    5y

    @Diana Dorantes I try to always be shopping for good deals and ready to make an offer when I find the right one.

    2Reply
  • Mike Dymski
    Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    5y

    Waiting for the crash just means waiting for the next period when we AGAIN won't buy real estate.

    11Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    5y

    As my headache homes facing cap ex have been becoming vacant I have been selling them and buying quads off-market.  Pivot to what's more easily obtainable 

    I'm also open to retail, office and industrial but not competing with house hunting crowds on-market.  I saw how my latest little nothing rent house went under contract immediately for full list. Covered in snow. 

    7Reply
  • Account Closed
    Specialist · Bozeman, MT · Member since 2016 · 237 posts · 153 votes
    5y

    I'm always buying. We are going to build out 2 properties this year or next after picking up some land. My market is so hot right now, a multi family built out is too hot to touch! So you just need to build your own. Labor is still expensive, lumber is expensive, but rents more than justify a new build. 

    2Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    5y

    I got me a little lesson back in March. The Fed squashed interest rates down to nothing and my bank published low, low rates. I immediately went to refinance.

    The bank I was working with jerked me around for three months straight. Ultimately, I had to go to another bank. They just jerked me around for a month.

    In any crash, published interest rates look fantastic as banks do what the Fed is pressuring them to do, but the reality of the loan approval process in a crash is that it's happening in a time of uncertainty and banks hate uncertainty. They WILL draw it out. Turning your equity into cash quickly will not usually happen easily and quickly.

    6Reply
  • Fred K.
    Member since 2019 · 18 posts · 21 votes
    5y

    @Zachary Beach

    Rates staying low for decades? I suggest watching Ray Dalio’s videos on debt cycles.

    2Reply
  • Simone G.
    Flipper/Rehabber · San Diego, CA · Member since 2016 · 26 posts · 86 votes
    5y

    Waiting is for whiners. 

    If there is a deal, write on it. 

    You'll know it is a deal because no matter where you are, and what the market is, the deal will distinguish itself as being better than its comps. 

    It's literally that simple. 

    Don't complicate it. 

    14Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free