All Forum Posts by: Chris Williams

First an Investor friendly Agent & then for SURE a great Property Manager! They will be able to help you build your team!!!

 You summarized it even better. A great metric to watch and compare markets is MoS or MoI (Months Of Inventory) because it captures both supply and demand.

For example: Austin has currently 5.72 MoS and Milwaukee 1.17 

Also look at Sale/List ratio and median sale price!

Sorry, I am reading a bunch of internet-nonsense here mixed with a few half-true statements that makes them sound semi-realistic. The data does not support a crash.

We do have an absolute inventory shortage in the US of about 3-5 million units (depending on who's research you want to trust: Goldman Sachs, Attom, Altos CoStar etc) because we have underbuilt for 14 straight years following 2008. So we have a net deficit on housing stock that coincided with the millennials changing their mind on renting forever. Now you have the largest generation in their late 30s early 40s buying their first home. It is called household formation. Once they made up their mind to buy, they may delay, but they are not going back to being content renting.

All other points I am reading here have the potential to impact the market to a certain degree, but nothing can produce enough inventory to change the direction (up). A housing stock shortage is not the same as owners not selling due to rate lock. If and when they sell, they have to move somewhere (about 72%, the rest rents, goes into assisted living or moves in with family), so inventory-wise wise it's for the most part a wash.

The only way you can see the supply/demand situation change is if a market (the US or a metro area) loses a significant percentage of the population (like a pandemic or nuclear incident) or we catch up building 3-5 million homes (surplus of normal), with tales the better part of a decade if we can even find the labor. Everything else is just background noise.

And one more point: residential real estate prices are "downward sticky". They share this trait with W2 labor cost. Once a salary is increased it is very hard to bring it down. If the market is not good to sell a house, the majority of homeowners will just not sell and wait for a better time rather than lowering their price.

2008 was very predictable already in 2005. All you have to do and look at inventory and DOM. Until we see 6 month of inventory, 25+% of listings expire without a sale and the average sale taking 150 days or more you don't have the ingredients for a market crash defined as more than a 5% correction.

Will we see corrections like in Austin, where an exuberance of appreciation sorts itself out? Yes, absolutely. But my market Milwaukee has never seen more than 8% appreciation and we are well to trend to hit this again in 2024. And we don't even have much net-migration, our 6 buyers to 1 seller ratio is 90% based on a demographic shift and household-formation.

 With a $35k yearly salary, Banks will let a borrower do a loan around $100k-$115k. What kind of drunk maniac thinks Banks are handing out $1 Million Dollar Mortgages to people making $35k?

In most major metro areas, you'd need to put down 40-50% just to have the rent cover PITI. Boston, NYC, DC, Dallas, LA, San Fran, Seattle.

So while you might desire cash flow, the fact is you're only getting it with cash offers. When interest rates were 3%, it was a different story.

The CRASH is for sure coming....

Here's how to protect yourself:

1) Only buy good deals below current market value

2) Prudently escrow the money it takes to get them into service (in service = making money)

3) Don't over-extend on the amount of projects you can do at one time (project = time between purchase and "in service")

4) Continually build your skills in getting deals (sales/networking/marketing), building a better depth chart of vendors, project management, and writing strategic scopes of work for the properties you buy.

5) Put money aside after every successful project. Always have cash reserves.

Do these 5 things always then you won't care what the market is doing.

The short answer is yes and no. The true value in most mentorships and coaching programs are the communities, the other people who put skin in the game to do it with you. Most of the training is just recycled from others. There are ones that are far better than others, usually when it's in a niche.

BUT, the error in coaching and mentorship is usually user error. Many people sign up thinking it will work itself after they pay the money, but it doesn't work like that at all. There are some horrendous mentor programs out there (fake gurus), but the content is probably fine to below average. You could still get value out of the relationships.

The best time to pay for coaching is after you have a small business going of your own and you want to scale it. Before that, most people are paying to get motivated and then don't want to do the work.

Well, just to start, you are the one buying it not them.  Maybe have a convo over coffee about how you analyze and that they are double working if you both are doing the same thing but getting opposite results.  I am in the Tampa Florida area and have a lot of OOS buyers.  So, they rely on my expertise to help them with the process.  Although, my strategy may work for me, it obviously isn't on the same page as you.  There are a lot of variables to making a low offer.  I think the conversation should be, " I understand your view but in my strategy I would have to get it at this price, are you willing to make these offers for me? I would love to work together but we have to be on the same page. Take a couple of days to look over my strategy and let me know if you feel like this is a good relationship that will benefit both of us.  You won't be upset if they don't feel like they aren't a good fit together"  No harm done and it just sets the expectations for you both and you know you did everything you could to get your point across.  

 Wow, even the great depression doesn't meet your criterion for a real estate crash. LOL

Been hearing about said crash for 14 years now.