Has Real Estate Ever Felt “Affordable”?

[Ryan Spath]

Curious for the investors here who have been doing this longer than I have.

When you first started buying rentals, did it actually feel affordable at the time? Or did every deal feel like a stretch financially? When I bought my first property in 2013, it definitely did not feel “easy.” When I turned it into a rental instead of selling it, it didn’t cash flow the first year and barely broke even the second. Later I did a 1031 exchange into two more properties and even then the portfolio was only producing a couple hundred bucks a month. Today people constantly say real estate is too expensive. Honestly, I agree. But looking back, every property I bought felt expensive at the time I bought it. In hindsight, had I been a little more aggressive while still staying within my own risk tolerance, we probably would have ended up with a few more doors over time. That said, my goal was never 100s of doors. Just enough passive income to make life financially easier and create some freedom.

Curious if older/more experienced investors felt the same way in prior cycles or if there were actually times where deals felt obviously cheap and easy.

[Mitch Messer]

Quote from @Ryan Spath:

Curious for the investors here who have been doing this longer than I have.

When you first started buying rentals, did it actually feel affordable at the time? Or did every deal feel like a stretch financially? When I bought my first property in 2013, it definitely did not feel “easy.” When I turned it into a rental instead of selling it, it didn’t cash flow the first year and barely broke even the second. Later I did a 1031 exchange into two more properties and even then the portfolio was only producing a couple hundred bucks a month. Today people constantly say real estate is too expensive. Honestly, I agree. But looking back, every property I bought felt expensive at the time I bought it. In hindsight, had I been a little more aggressive while still staying within my own risk tolerance, we probably would have ended up with a few more doors over time. That said, my goal was never 100s of doors. Just enough passive income to make life financially easier and create some freedom.

Curious if older/more experienced investors felt the same way in prior cycles or if there were actually times where deals felt obviously cheap and easy.

My wife and I started investing in Atlanta, Georgia in 1999, just a few years after the city had hosted the '96 Summer Olympics and greatly raised its visibility and appeal as a business and social hub.

In the years that followed, we watched as real estate prices soared. Whole neighborhoods got gentrified and redeveloped, many by outside operators.

With each wave of hypergrowth, I'd hear local investors argue that rents and home prices had hit their limit and would never keep rising.

Sounds familiar, right?

Of course, Atlanta did ultimately hit the wall during the Great Recession, but so did every other real estate market.

But, since the end of the downturn around 2014, Atlanta has continued to soar!

Often, those closest to growth are the last to see it!