The sky is falling, the sky is falling!
Recently, instead of bouncing around on the podcasts to different titles that caught my attention, I thought I would add some structure to my listening pattern and start going in order from the very beginning. As many of you know, they started posting the podcasts in 2013, about four years after the bottom out of the housing market crash. I found it pretty entertaining that @Brandon Turner and @Joshua Dorkin were even speculating a little back then that the market was rising too quickly and we were nearing another bubble or correction. Obviously, hindsight is 20/20 and 2013 would have been an amazing time to buy real estate since the market has seen tremendous gains since then.
Well, it's six years later, and the market has continued to rise. Current market conditions seem iffy at best, it's a sellers market for sure, and competition has skyrocketed in the REI realm. Warren Buffet famously states "When everyone is buying, sell. And when everyone is selling, buy."
@Scott Trench even stated "we are always 12-18 months away from our next crash." Have a strategy that works in every market is obviously key, but you also cannot blatantly state that timing is unimportant. We consistently hear on the podcast to "take action," even some stating to do whatever is necessary to get your first deal under your belt. Take out cash advances on credit cards, borrow hard money, find friends and family to invest with you. But, I would argue, if you do do this at the wrong time, you have the potential to take a devastating blow to your financial future, that could set you back years.
I'll openly state, I'm not waiting for the 'right' time or market. I just paid $3k over asking on a house hack that I'm 100% leveraged on through a VA loan. Sure, I could be underwater immediately in any sort of downturn, but I'm not worried, because I know I can meet the 1% rule and at least break even monthly, if not cash flow a little, even after I move in a year.
So, what do you say to a newbie in this market, getting started? What are your tactics to protect yourself or prepare for action if there is a correction? Would you recommend someone with little cash reserves take on extreme borrowing to knock out their first deal?
My opinion, there's no right or wrong time, there are advantages and disadvantages to every state of the market, but do not say that timing is unimportant, because it could ruin someone starting out's life if they make the wrong moves.