COMING MARKET CRASH!
Wisconsin: Eau Claire and Rapids · Member since 2019 · 93 posts · 58 votes
COMING MARKET CRASH!
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Taylor DaschBusiness Member
Real Estate Agent · Temple, TX · Member since 2022 · 1k+ posts · 700 votesI am a beginner also but to me the beauty of real estate is that if you buy a property that has plenty of space to go down, if you cash flow well, then just hold out until the market appreciates again. Personally I think MeetKevin got burned out, he was putting out probably double the content of his biggest competitors. I see it like this, If I have plenty of money and reserves, I will buy a property that I believe is a good deal, then next time I have the money to buy another one, I will buy another one. Regardless of the market, it is called dollar cost averaging, you will buy high and buy low. The point is that you are doing something to meet your goals - If I would have listened to everyone and waited for the market to crash I would still be sitting with a bunch of money in my account slowly becoming worth less and less due to inflation. Now that doesnt mean just go out and buy anything when you can. The hard part is to find the right deal that makes sense for your end game. As for your post, from a beginner, I think that the market will slow down with interest rates rising, however I have no idea and my market personally has not slowed down at all.
Taylor Dasch | EG Realty561 Reviews
19 Replies
- 4yTaylor DaschBusiness MemberReal Estate Agent · Temple, TX · Member since 2022 · 1k+ posts · 700 votesI am a beginner also but to me the beauty of real estate is that if you buy a property that has plenty of space to go down, if you cash flow well, then just hold out until the market appreciates again. Personally I think MeetKevin got burned out, he was putting out probably double the content of his biggest competitors. I see it like this, If I have plenty of money and reserves, I will buy a property that I believe is a good deal, then next time I have the money to buy another one, I will buy another one. Regardless of the market, it is called dollar cost averaging, you will buy high and buy low. The point is that you are doing something to meet your goals - If I would have listened to everyone and waited for the market to crash I would still be sitting with a bunch of money in my account slowly becoming worth less and less due to inflation. Now that doesnt mean just go out and buy anything when you can. The hard part is to find the right deal that makes sense for your end game. As for your post, from a beginner, I think that the market will slow down with interest rates rising, however I have no idea and my market personally has not slowed down at all.Taylor Dasch | EG Realty561 Reviews
- Investor · Ontario · Member since 2015 · 486 posts · 250 votes4y
Hi @Rebecca E. The real answer is no one knows. I would imagine MeetKevin was saying the same thing in 2020.
It really depends on your mindset and strategy. If you are thinking long term, you buy on good terms and cash flow the short term market has little effect if any. If you are a flipper market movements matter much more.
I was not invested in 2008 however I have a contact that went broke during that time. He like many others had too many properties with little equity that did not cash flow. He was then in the forced sell position at the worst possible time to sell when the market turned.(He has since recovered to build a massive portfolio that cash flows really well). Many investors that were not over leveraged in 2008 and had strong cash flowing properties in good markets did just fine, they likley still hold many of those properties and were able to buy more at that time. Likley because they were not overleveraged were well capitalised and had lots of cash flow to take the hit.
All of that being said I am still looking at an off market Triplex in one of the most expensive cities in my market. I don't love the deal but with the right seller financed terms it can still fit my long term goals and be a good investment even if a massive correction were to happen.
- 4yPeter MckernanBusiness MemberResidential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votesI agree with Jason, we do not know where we are at right now, and not even Kevin knows. With the market being high, we are always in this process of waiting to see what is next in the market if it will drop. The best thing you can do is make sure that you are analyzing your deals properly, having cash reserves for the economic winter, and still make sure you are cash flowing. Keep an eye on the FED talks as Kevin said one is coming in March (I just watched his video to have context). He does have a lot of real estate and think he has even been on the BP Podcast as well, so he does have a good background in it! It's tough to say and I will say this one you have big companies still buying large SFR blocks for renting them out I.e. blackrock and Blackstone with no end in sight or no mention of it you know that they have even better analytics then Meetkevin and think the market is still good for rentals.
Quote from @Rebecca E.:
LOL. not really.
A YouTube guru I had followed, MeetKevin, recently announced he is stopping his channel. He's sold almost all his stocks and is starting to sell real estate. He thinks there will be a major crash in the next 6-12 months.
I've been wondering if we were going to correct go up go down, what? I looked at a bunch of old posts here with all the people prophesying doom and gloom in 2020 and felt better.
I'm hanging in here looking for deals and waiting. Don't want to predict market crash, don't want others to predict crash.
I am curious what the more experienced people in real estate are doing now. If you were in real estate prior to 2008, would you be willing to share what you're doing today and is it different than what you were doing last year?
On a side note even with his channel having 1.8M subs he did throw out some key info, he still will be giving market updates to his paying members that are in his courses and he is starting a new course. Maybe just some good marketing tactics.
The McKernan Group4.957 Reviews - 4yJon KellyPro MemberInvestor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
@Rebecca E. I agree with the other two posts. (1) Nobody really knows and (2) It really doesn't matter.
It's better to spend more time finding a market and analyzing deals than it is researching what may or may not happen with the macro environment.
If you invest for cashflow you are much more protected against a market crash than those that invest for appreciation.
Be conservative in your underwriting and stick to your metrics that make a good deal for you (e.g. $200/mo in cashflow or 12% COC, etc.)
- Investor · Jefferson City, MO · Member since 2020 · 192 posts · 178 votes4yworrying about if/when the market will crash wont prevent it from crashing. prepare for the worst but still pray for the best while advancing towards your goals.
take a look at the 5 year graph for real estate prices and the S&P 500. yeah, it definitely crashed a few times. but it's wild cause if you look at the charts from left to right, they always bounce back. almost like these things ultimately work themselves out and you're better think time in market than timing the market. timing the market is a fools errand and something even Warren Buffett laughs at. if the oracle of Omaha can't predict the market (stocks or real estate) why do we bother? - Wisconsin: Eau Claire and Rapids · Member since 2019 · 93 posts · 58 votes4y
@Taylor Dasch
Exactly what I am doing...it's hard not to get sucked into bidding wars, but if it doesn't cash flow, I don't buy it. My market JUST recovered from 2008 in 2019. I don't count on appreciation.
- Member since 2021 · 53 posts · 34 votes4yI've been investing in RE since 2011. I am currently not buying in places like CA, UT, TX or FL because as we all know prices have gone up too much. In fact I just sold one of my properties in CA last year, and will be selling another one next month. I am now focusing on NYC and Philly markets. We all know NYC has been plagued with mass exodus and the property market is still about 15% lower than 2017-2018. As for Philly, well besides the prices haven't moved up that much since 2019, I just love Philly. The city has so much of history, very charming and so underrated. Just make sure you avoid certain areas. I like University City because the area is gentrifying daily.
So yeah I am not buying in places where prices have gone up 30% in the past year, but I am definitely continue to buy in places with stable prices. And most importantly I strongly believe NYC and Philly will bounce back when this unfortunate pandemic is over. This pandemic will end one day, hopefully soon.
I personally don't see a crash coming. Lending is still very strict. Maybe a correction for 10-15% mostly due to massively slow growth of US population and stricter immigration policy. - Wisconsin: Eau Claire and Rapids · Member since 2019 · 93 posts · 58 votes4y
@Rebecca E.
Are you just holding cash, buying bonds, putting cash in ETF? BTC seems super popular on this site, tongue firmly in cheek.
I have cash sitting there waiting for deals, but not finding any deals. I hate having it just sit with inflation going up.
- 4yAxel MeierhoeferPro MemberRental Property Investor · Escondido, CA · Member since 2017 · 684 posts · 550 votes
@Rebecca E. I saw some of what Meet Kevin said and did not really see that he is ending his channel but you are right about him claiming to have sold his stocks and some of his real estate.
One should also consider that not long ago he ran around with a different color in his hair to attract attention and wanted to become the governor of California in the last election. I like him, maybe because we have the same ancestry.
What is missing in his change of approach is the differentiation into the purpose of investments - at least its missing for me in what he says.
He seems to now believe that everything is just a matter of profit optimization. That's not surprising as the American culture seems to only focus on that. When he first started teh service aspect was still more prominent. I am hanging on to it.
What I mean by that is the difference between investments in stocks to own a shares of them and then benefit from their profits versus providing shelter to people for a fair price. The latter has a strong social and service component and it does not matter what the asset costs after it was purchased. That's why the focus for me and my mentoring community is getting well-performing deals when we buy and then making sure we generate good cash flow as part of that social service.
The changes in the valuation of the assets in big market cycles is not that relevant and the need for shelter will not go away.
You might be surprised to read that I actually agree with the statements and predictions of the book "The Fourth Turning" and the latest book by Ray Dalio titled "Principles for dealing with a changing world order".
Even with all those big-cycle changes, the need for shelter will continue to exist and that's what I and my mentoring folks provide with our SFR investments.
Everybody here on BP and in the investing world will have to decide how they want to position themselves as we are moving through these big cycles and associated changes.
If you like to chat about what we do and why we don't sell, feel free to DM me and set up a call
- Real Estate Agent · Phoenix, AZ · Member since 2019 · 158 posts · 140 votes4y
@Rebecca E.
The world was suppose to end Y2K then again is 2007. The market crashed in 29’ and black Monday in the 80’s hyper inflation back then as well. 08’ crisis and now we’ve been in a nice run for a long time. I wasn’t inveSting in 08’ but in my opinion we will have a correction not a crash. I can’t see a crash with This low of inventory. Even if we had double the houses for sale we still would be under what we are used to. The prices might not go up substainally like they’ve been but I can’t see a crash. But we crashed in 08 but saw the bottom in 12’. So if you were smart you beat the down flow
By pricing right and getting out of your risky investments asap. I am a flipper and multi family buy and hold investor and I’m still buying everything. I am actually buying more now then before. I just make sure my flips will work as a buy and hold or I have enough margin to fire sale it and break even. I don’t like cash and will never keep cash in my bank account. I believe
In strong reserves to weather the storm but I also believe in taking risks and being an investor. This is my opinion snd I fully intend on continuing to invest now in a crash at the bottom doesn’t matter there is always a estimate to profit when you do things correct!!
- Wisconsin: Eau Claire and Rapids · Member since 2019 · 93 posts · 58 votes4y
@Justin Sullivan
Thanks for your thoughts. I think the same actually but I get a bit worried sometimes I'm biting off too much and if I wait, things might be better in a few months.
I just made an offer for a buy and hold which will more than easily meets the one percent rule. Even if the market corrects 10% in the next 6 months the additional time in the market should offset the time wasted doing nothing. Good to know I'm not the only one still buying deals when they present themselves.
- Real Estate Agent · Minot, ND · Member since 2021 · 131 posts · 223 votes4y
3 indicators we're keeping an eye on in 2022...
1) rapidly rising interest rates
2) slowing buyer demand
3) Increasing housing construction
The confluence of these factors WILL change the market dynamics. However, the market is always shifting. You never really know what's happening until AFTER IT HAS OCCURRED. Trust your fundamentals and strategy and push forward. Lastly, remember the only market that matters is your LOCAL one. Don't put too much stock in national media reports.
- 4yPamela GordonPro MemberRental Property Investor · Charlotte, NC · Member since 2021 · 38 posts · 36 votes
@Rebecca E. No one really knows when the crash is coming, but even though I am new to real estate investing, I make sure to analyze the deal the best way I know how, and if the numbers makes sense to me, then I'm putting in an offer. In saying that, with all the craziness and the insane prices of the housing market in 2021, I was still able to buy 2 properties that were really good deals in the Raleigh, NC area.
I got a HELOC on my primary residence in May used that to purchase one property in June and then refinanced my primary in November paid down on my HELOC and used it again to buy the 2nd property. This year I plan on using my HELOC again, but since I also invest in stocks, using some of that money to purchase properties or I should say as my down payment. I also want to dive a little deeper into owner financing, and see if I can get a deal that way.
Nothing beats time. Take your time, do your research and analyze before making your move. It's when we rush, we miss a step and have regrets. No need to rush! - 4yMike D'ArrigoPro MemberTurn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
@Rebecca E. I was one of those in 2020 saying that the real estate market was not going to crash and don't believe that it will in 2022. First of all, markets don't crash simply due to high prices. High prices at some point will become unsustainable and when that happens, the market will run out of steam. Appreciation rates will slow down and the market will eventually reach equilibrium. We're a long ways from that due to the extreme shortage in nearly every market. This isn't going to happen overnight. The crash of 2008 was a perfect storm and none of the conditions that contributed to it exist today. There were 3 main factors that created the "08" crash. They were 1. Overly lenient lending standards, 2. High growth of money supply in the economy and 3. Excessively high growth in new housing starts. We don't have any of these things today which is why I don't see another crash anytime soon.
- Member since 2021 · 1 post · 3 votes4y
Robert kiyosaki has been predicting a crash for the last 5 years. It's exhausting. Even an old broken little watche is right twice a day
- 4yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesI have not watched Kevin in a few months.. but you know there is a time to take your chips off the table and realize your good investing and your gains ..
Quote from @Peter Mckernan:
I agree with Jason, we do not know where we are at right now, and not even Kevin knows. With the market being high, we are always in this process of waiting to see what is next in the market if it will drop. The best thing you can do is make sure that you are analyzing your deals properly, having cash reserves for the economic winter, and still make sure you are cash flowing. Keep an eye on the FED talks as Kevin said one is coming in March (I just watched his video to have context). He does have a lot of real estate and think he has even been on the BP Podcast as well, so he does have a good background in it! It's tough to say and I will say this one you have big companies still buying large SFR blocks for renting them out I.e. blackrock and Blackstone with no end in sight or no mention of it you know that they have even better analytics then Meetkevin and think the market is still good for rentals.Quote from @Rebecca E.:
LOL. not really.
A YouTube guru I had followed, MeetKevin, recently announced he is stopping his channel. He's sold almost all his stocks and is starting to sell real estate. He thinks there will be a major crash in the next 6-12 months.
I've been wondering if we were going to correct go up go down, what? I looked at a bunch of old posts here with all the people prophesying doom and gloom in 2020 and felt better.
I'm hanging in here looking for deals and waiting. Don't want to predict market crash, don't want others to predict crash.
I am curious what the more experienced people in real estate are doing now. If you were in real estate prior to 2008, would you be willing to share what you're doing today and is it different than what you were doing last year?
On a side note even with his channel having 1.8M subs he did throw out some key info, he still will be giving market updates to his paying members that are in his courses and he is starting a new course. Maybe just some good marketing tactics.
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