Everyone is saying its a bad time to get into real estate?
Member since 2019 · 8 posts · 6 votes
Everyone is saying its a bad time to get into real estate?
Most Popular Reply
Curtis YoderPro Member
Rental Property Investor · Tulsa, OK · Member since 2014 · 241 posts · 187 votesI have heard that same thing my entire career. In my experience you should always be buying. There are deals out there, just a little harder to find this year. Do your homework, find a deal or two that cash flow, and never stop buying. You cannot time the market, no one can.
55 Replies
- 4yCurtis YoderPro MemberRental Property Investor · Tulsa, OK · Member since 2014 · 241 posts · 187 votes
I have heard that same thing my entire career. In my experience you should always be buying. There are deals out there, just a little harder to find this year. Do your homework, find a deal or two that cash flow, and never stop buying. You cannot time the market, no one can.
- Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes4y
Quote from @Serge DuLaudAllemans:
Hi all, I've been doing some research lately on the real estate market and most professionals on YouTube and articles being written are on the pessimistic side of things. Most of the advice out there right now is that it is a terrible time to buy since everything is over valued. I hear prices are going to come down and it would be better to wait for them to come down rather than buying now. I would love to hear the opinion of some of you in this forum and website. Thanks
I continue to buy. It's just taking a little longer to get the deals I'm looking for but they are out there.
- Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes4y
You need to find a new “everyone”. You don’t listen to the guy that rides the bus about what kind of car to buy, don’t listen to the person that doesn’t own any rental properties about when you buy.
NOT ONE person told me it was a good time to buy after the big crash in Vegas. EVERY SINGLE PERSON warned of the next crash or further crashing. You couldn’t explain to them that you were putting down`$25k on a $100k house, the tenant would pay for the rest. Did they think houses were going form ``$300k to under `$25k?
Take a survey of this “everyone”. Ask them if they think houses will be cheaper in 10 years than today. If so, stop listening to that person. :-). If not, then you both agree buying today isn’t a mistake. Hoping for future lower prices isn’t a plan. It has cost millions of Americans the opportunity to EVER own a home over the last few years. They listened to EVERYONE about the coming housing crash and didn’t buy. Now they can’t and probably never will be able to afford to buy. They would jump at the opportunity to pay the “insane prices” of 2019 or 2020.
- 4yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Bill B.:
You need to find a new “everyone”. You don’t listen to the guy that rides the bus about what kind of car to buy, don’t listen to the person that doesn’t own any rental properties about when you buy.
NOT ONE person told me it was a good time to buy after the big crash in Vegas. EVERY SINGLE PERSON warned of the next crash or further crashing. You couldn’t explain to them that you were putting down`$25k on a $100k house, the tenant would pay for the rest. Did they think houses were going form ``$300k to under `$25k?
Take a survey of this “everyone”. Ask them if they think houses will be cheaper in 10 years than today. If so, stop listening to that person. :-). If not, then you both agree buying today isn’t a mistake. Hoping for future lower prices isn’t a plan. It has cost millions of Americans the opportunity to EVER own a home over the last few years. They listened to EVERYONE about the coming housing crash and didn’t buy. Now they can’t and probably never will be able to afford to buy. They would jump at the opportunity to pay the “insane prices” of 2019 or 2020.
one thing I think most investors or those looking to enter the market miss.. is that trying to time bottom is not possible most of the time and if we do get in a big retreat then financing retreats right along with it. IE tougher and tougher to qualify.. prices may go down but rates go up. ?
- 4yTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
Nobody has a crystal ball and slow and steady still wins the race. The unit economics on a specific property matters WAY more than the market. Get your financial house in order, play the long game, and in 10-15 years you'll be glad that you dollar cost averaged your way into a nice real estate portfolio in a wide variety of market conditions.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes4y
@Serge DuLaudAllemans I got approached some time/years ago by a person who wanted to interview myself for a piece and what caught me off guard and grabbed my interest was the way she said it of interviewing myself and persons like me who fundamentally think different then everyone else. That was considerable emphasis as to how different, abnormal, extraordinary, even verging on "odd" my and the others of interest think. This really baffled me, and I went through it because I was so confused, nearly insulted, I needed to understand this personification of myself.
As I went through this I explained things, how things viewed to me, my thought process's, why i did what I did, when i did, how I did them, and really for myself it all stood on a foundation of "common sense", yet detailing these things her expressions were how courageous or revolutionary my "common sense" actions were.
In end I came to a conclusion that apparently the rarest of all senses is, common sense.
And here we are again, in a zone of what I would call "Common Sense" yet the masses seem to, yet again, be completely oblivious to such sense.
Look, let's do some simple walk through of things. Prices have surged significantly in last 24 months, correct, and as we have all of history to gauge prices are simply not coming back to where they were before, not going to happen. So, we have market shift, that's what a fundamental market wide adjustment is called, a "Shift". In this shift, we have less capacity by persons to buy. Common Sense would say, less buyers = more renters, right? BUT, we already had a ton of renters, it has actually been unit shortages on mass scale, so we are looking at more renters in a high demand setting, Common Sense #2 is when add even more demand to an in demand item prices go up, right.
Ok, so now Common Sense #3; put it all together and see what we got. We have (1) more renters + (2) higher rental prices, that (again in common sense) = more purchase demand for making more rental units to meet the market opportunity.
In what way does any of this = collapse? Is the world of finance in any peril of stopping on a dime due to some systemic flaw as in '08'? Not one I am aware of.
Look, you gotta ask yourself what value your placing on your information; a YouTuber is by profession a for profit YouTuber, right, so exactly how great at REI do we expect a person who makes there living getting views talking about stuff and not actually doing it? GIGO: Garbage In Garbage Out. Your data output is only ever going to be as good as your input.
Know what all the YT's and what not yapping about collapse is telling me, it's telling me that yapping about collapse is getting the views, that's it and that's all. I trust a actual car mechanic to work on my autos vs a person who talks about auto repair. I trust an actual pilot to fly the plane vs someone with a YT channel about planes and flying. YT is the new talk-show host, they talk for a living, that is it. When I get burnt out on actually doing REI, I will start a YT or TLC show on it, because that's the only way i will have time for it, by no longer doing it.
Do yourself a favor, chart where the sheeple herd is moving, and go the opposite direction.
- Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes4y
There is no "bad" time. The only difference is how you put a deal together and how long it takes to find one. Inventory is down right now, so it's going to take some more work, but real estate isn't a stock that's going to bottom out on you.
- Real Estate Agent · Miami, FL · Member since 2022 · 6 posts · 5 votes4y
Serge, Even in the "bad time" there are a lot of opportunities out there. It depends on what you intend to do with the property. When you buy and hold it's pretty much never a bad time it all depends on how skilled you are in finding Good Deals. If you look at the bigger picture, there is always a catch, if rates are low prices are high, and if prices are low rates are high. So if you want to keep the property for a long period of time like 5+ years it's always a good time. If you are an investor, it gets a bit more complicated and you need to be more creative in finding deals. A good deal is always good. I also recommend talking to realtors in the market you're interested in purchasing or investing in and asking their opinion on that matter.
Hope it helps.
- 4yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Find a place where the numbers work and go for it. The reality is what happens in one market can be very different than what happens in another.
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
What they're all saying^^^^^
Real investors do the best when the market is bad in some way....inflation/recession/buyer's market/seller's market/etc.... Any fool can make a buck in Real Estate when the market is just cruising along....
I liken it to that old saying about New Years Eve....drinkers say "naw I didn't go out, it's for amateurs". Same thing for RE...the market has been ridiculously easy to make money in for the past 10 years, especially the past 3-4. Now it's time to strap it up, game on!
We just started looking again yesterday as a matter of fact....
- 4yLuther Wilson IIIPro MemberReal Estate Broker · Kansas City, MO · Member since 2017 · 537 posts · 292 votes
Hey, @Serge DuLaudAllemans, it really depends. On a lot of different factors... Your real estate investing experience, how much capital you have to invest, your overall risk tolerance along with your investing goals and where AND how you wish to invest - all of this and a bunch more comes into play when trying to decide whether you should get into real estate right now or not. Buying & holding single-family homes is still working okay. They're somewhat easier to manage, you can BRRR them out, and the barrier to entry for Midwest B & C class SFHs is still relatively low. Additional access to private capital and realistic expectations are two things that active investors right now have to be more mindful of right now. Our clients and partners are still making it happen... The main difference that we've seen is that there's a lower # of "home run" types of deals - the spreads are tighter. Out of 5 - 10 deals, the # of them in which we're "all in" on the purchase and renovation costs, at or below 75% of the ARV has gone done significantly. Hence the squeeze on the wholesalers and fix & flippers... Buying & holding is way more forgiving. If you're gonna get in right now, it's gonna be on you to choose a path that makes sense to you and that's somewhat realistic. As things ease up or tighten up we'll all need to adjust accordingly anyway. I'd encourage you - if you do have access to capital - to go ahead and get in the game! Your plan has gotta make sense, though! Cheers! :)
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes4y
@Serge DuLaudAllemans
Never a bad time to buy, just bad assets to buy.
Longer you hold real estate the more forgiving it is.
7e investments53 Reviews - Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes4y
Shut off the "news" and social media...it's poison...and turn on books and podcasts from successful investors.
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes4y
You can answer that question yourself. How many good cash flowing properties can you find to buy? For some years unnaturally low interest rates have made buying cash flowing real estate relatively easy. Hence the rise of BP. Interest rates have gone up to more normal rates and it isn't so easy to find deals.
- Real Estate Agent · Pittsburgh, PA · Member since 2014 · 81 posts · 56 votes4y
Quote from @Serge DuLaudAllemans:
Hi all, I've been doing some research lately on the real estate market and most professionals on YouTube and articles being written are on the pessimistic side of things. Most of the advice out there right now is that it is a terrible time to buy since everything is over valued. I hear prices are going to come down and it would be better to wait for them to come down rather than buying now. I would love to hear the opinion of some of you in this forum and website. Thanks
The fear porn is real and if you listen to the talking heads and media you'll never buy anything, ever. You can find good deals in any market. Do your due diligence and if a deal fits your criteria, go for it.
- Investor · San Francisco Bay Area · Member since 2019 · 119 posts · 79 votes4y
Its always a "bad time". Then 5 years later you're a genius.
- Investor · SE Wisconsin · Member since 2019 · 111 posts · 71 votes4y
does it cash flow at the price you can buy it and current rents, assuming reasonable expenses and such? Are rents likely to go down in the short or medium term (hint: no). 10 year horizon, will houses be more or less expensive (hint: more). Then what's the issue? If the market softens for 6 months or a year, you just hold through it and get paid to do so.
It's totally possible that this is not THE BEST POSSIBLE time to buy a house in the area your looking. But you can't possibly know that until the best possible time has passed you by. And for most investors, it's not like you can only do this once. So, the same rules apply - find a deal that works, structure it the best you can, jump in and wait while you look for another.
- 4yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Mike Dymski:
Shut off the "news" and social media...it's poison...and turn on books and podcasts from successful investors.
when I had my HML company I had a very conservative CFO and a minor partner that was/is an attorney.. if I let them run the deal we would never have made a loan.. I would be guys you cant charge what a HML charges and expect these files to look like the absolute best files a bank would give to their premier borrowers LOL got to shut out the noise and go with experience and common sense. Although to be totally Frank I thought we would hit this stage of the economy fall of 2018.. glad I kept going and did not listen to myself LOL Although we did move to cash and limited our leverage a bunch so I like where we are at now ..
- Rental Property Investor · Sedona, AZ · Member since 2018 · 260 posts · 141 votes4y
There is no good or bad time, only good or bad deals. Analyze each property on its merits and decide accordingly.
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes4y
Newbies will say it’s a bad time. If you live and breath this you will always be on the hunt for deals, we may change our criteria with this shifting market. But I’m never not looking
- Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes4y
I bought my first house hack in 2015. People said that we were still in a recession and a bad time to buy. It's almost doubled in value.
I bought my second house hack in 2018. People were saying that the market had toped out. I just got a HELOC for over $200K and my expenses are far below what it would rent for.
There's always reason to buy and not buy. Some people on YouTube don't have the credentials, but rather want the views.
People who bought at the height in 2008 are now over a third of the way done with their mortgages and values have gone up. It's all about the waiting game. This isn't a get rich quick scheme that people are hoping for.
Run the numbers, be conservative, and it generally works out. If the market tanks, it's a paper loss. Just don't sell and keep making the payments. People will always need a place to live.
- 4yJeffrey K.Pro MemberLender · Boulder, CO · Member since 2016 · 53 posts · 21 votes
On the contrary!
Here is my 2 cents: As rates rise, it is likely that markets will shift from the seller's market that we have been seeing for the last couple years to a buyer's market. Additionally, problems are easy to solve with money. Many primary residence borrowers have either tapped into equity during the refi boom or may not be able to refinance in the current market. This creates more opportunities for RE investors to solve problems and get genuine deals.
Additionally, as rates increase, fewer potential home buyers are able to make the transition from renters to homeowners; i.e. a higher rate results in a higher monthly payment which means the home buyers money wont go as far when conventional DTI qualifications are used. This creates a space for investors well versed in HML products. Furthermore, the increase number of people continuing to rent will increase demand in the rental markets and likely increase rents.
Shifting markets create opportunity!
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes4y
I have a thought, let's start by defining what IS a horrible/ death-sentence of a market for R.E. Investors:
The worst market for a R.E. Investor is one where there is no buy/seller problems at all. Let's call this the town of "Perfection". In "Perfection", everyone who sells a home does so by choice, there is no stress or need ever. So to get there, in "Perfection" nobody ever dies, because an estate makes a R.E. problem to solve. And in "Perfection" the divorce rate is 0%, because again that would present a R.E. problem to solve.
In "Perfection" homes never degrade, all materials are eternity materials. Furnaces don't break, roofs don't wear out, everything lasts forever and homes never fall into neglect, because that would be a R.E. problem to solve.
The unemployment rate in "Perfection" is 0%, because job loss could present a R.E. problem to solve, and matter of fact nobody ever goes anywhere for a job change, EVER, because relocation could present a R.E. problem to solve.
Landlords love to work, to the extent that they look to work for literally all eternity, never retiring as they could present a R.E. opportunity for an investor to solve.
Also, in "Perfection" the population never changes, nobody get's Alzheimer's or goes into a Memory Care center, never, because again it could make a R.E. problem to solve.
As you can see, for a R.E. Investor to have no opportunity requires a ridiculous degree of "Perfection", and we hadn't even touched on economy yet. People die, that's reality, as is said "ain't nobody getting out of here alive". Divorce happens, a LOT. People have financial problems regardless of economy, it happens. Changes of life happen, homes get neglected, as long as things happen opportunity in REI will exist, full stop.
To argue there is NO opportunity, or even little, is to argue things are "Perfection" or darn close to it. You find that town, you let me know, I will move there tomorrow!
- Investor · New York City, NY · Member since 2015 · 388 posts · 563 votes4y
Following the wisdom of the masses will get you the same returns of the masses. I remember about 25 years ago, when I was just out of college, I considered buying condos in Panama City, FL and/or St. Thomas. I thought waterfront condos for $60k that rented pretty well had to be a smart investment...right? Well, all my "smarter" friends and family members told me not to do it, Panama City is not nice, neon lights, etc., St. Thomas had too much crime, etc., so I listened to them. I would've made an absolute killing on those investments.
A few years later, when I thought of investing in Hudson, NY, friends and family said the same thing. This time I ignored them and went ahead with it, and I've been ignoring them ever since. If the zeitgeist is to avoid buying real estate, then it's probably a pretty good time to buy real estate. Buying and managing well, over time, tends to overcome any small errors in timing and/or errors in paying a bit too much.
- Real Estate Agent · Mesa, AZ · Member since 2017 · 230 posts · 169 votes4y
I think there's never a bad time to buy, but there's bad ways to buy. Also plan the exit first and that will let you know the proper way to buy.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.