Richard

Uma Moriarity of CenterSquare Investment Management says public and commercial REITs are like a “tale of two cities.”

When running a business, some days you feel on top of the world. Other days you feel like the world is out to get you. The difference is often in the framing, and in the confidence you have in your own skin and ability. But is it possible to maintain 100% confidence, all of the time? Probably not. It’s likely going to waver during the day, and that’s fine.

Knowing how to top confidence back up when it goes awry will make sure it doesn’t stop you achieving your business goals. These entrepreneurs share how they instantly generate confidence during their working day, and all are things you can implement right now.

Remember your past wins

Tried and tested by entrepreneurs who have faced nerves and self-doubt, reminding yourself of what you have already achieved can give your confidence levels the boost they need. Create a metaphorical cookie jar of all your business and life wins and dip in for instant assurance. Samantha from ICI CARE keeps a list of her past wins and her big picture vision on the wall where she works, ensuring they are at eye level. “By having that reminder, I win over my brain before it spirals down,” she said. “Self-doubt is normal but I keep my focus and energy on achievement.”

Dana Marlowe from I Support The Girls does similar, but adds visual cues in the form of, “photos, videos or mementos from wins you had in the past, that remind you of your worthy accomplishments.” Medals, smiling photos, and videos of when it all went right could be the intervention that changes your trajectory right away. “Quick wins and small accomplishments build up to larger ones,” she added.

Elaine from Elaine Hughes Consultancy also reminds herself of her successes, and wants you to do the same. “Write all down the things you have achieved in your life, which can be academic awards, personal goals, or achievements. Include anything you once thought you couldn’t do, that you did in the end.” She said you should, “put this list somewhere you can see it and remind yourself just how awesome you are!” Hughes herself has, “a physical disability in a society where I am up against the odds,” and knows she has, “defied all of it to make my success against the backdrop of all naysayers.” Anything you overcame in the past will help you overcome more in the future, you just need reminding.

Embody your most confident version

Becoming a confident person starts with acting like one. When you’re feeling unconfident you’re probably slouching, looking down, subconsciously finding reasons to believe that you’re not built for this. But that doesn’t have to be the case. Louise Cox from Louise Cox PR leans into the physical components of confidence when she needs it. She advised you, “behave in a way that suggests you’re confident and self-assured, even if you don’t necessarily feel that way inside.” This might involve, “standing up straighter, speaking more assertively, or making eye contact or smiling more frequently.” Once you do this, your brain is tricked into confidence. It’s fake it until you make it, for the most positive of outcomes.

Become the person you need to be to get stuff done by having a conversion with future you. That’s exactly what Mario Sarceno from Founders PR practices, by “future tracing what someone with that desired confidence would do.” Sarceno, when experiencing low confidence from not knowing how to overcome an obstacle or create a solution to a problem, likes to, “step out of my current situation, envision a version of me that has overcome my situation, and list out what they’re doing and have done to get to where they’re at.” With those steps outlined, “it is a lot easier to see the path I should take and commit to it,” he added. Albert Einstein said you can’t solve a problem with the same thinking that created it. So find a way to think differently.

Confidence is a state of mind, which means it’s also a choice. Dr Amanda Foo-Ryland, founder of Your Life Live It, knows this well, explaining that it’s also, “about how you choose to see a new situation.” She knows, “I can either be confident or choose not to be.” Like Sarceno, she incorporates visualisation into the way ahead. “If I choose to be confident, I imagine the event and see myself in it being confident, being the person I want to be. I observe myself in the movie in my head.” Foo-Ryland thinks about what she wants in specific detail and allows the film to play out. “I actively choose to focus on what I want, rather than what I don’t.” The flipside is also true. “Focusing on what you think might happen that is negative will create a poor quality mindset, in turn this will create anxiety.” No one wants that. Visualise it all going right for an instant hit of assurance and optimism.

Utilize affirmations and positive self-talk

On the topic of tactics for instant confidence, affirmations and self-talk are heavy hitters. Mastering both can rewire your brain to a more helpful channel and keep it there through any crisis. Selena Rezvani, leadership development speaker and author of Quick Confidence: Be Authentic, Create Connections and Make Bold Bets On Yourself, repeats mantras or short soundbites to herself before a big moment. “They remind me that I am needed in that room and that I have the skills to serve the audience at hand. They also affirm my resilience in case things go wrong.” Rezvani’s mantras include, “I belong in this boardroom,” and “if it’s meant to be, it’s up to me.” Succinct and empowering mantras perfect for an important event.

Other fans of affirmations include Lydia Collins-Hussey, specialist paediatric allergy dietitian from The Milk Allergy Dietitian, who has created visual cues, with her list of ten “I am” statements on the notice board at her desk, “that I speak out loud every day.” She refers to them every time she needs to, and they include statements like, “I am an expert in my field, I am worthy, I am confident, I am grateful.” What’s on your list of ten? Grab a pen and paper and jot them down, then read aloud and feel them coming true.

Lauren Hope, executive director of the Second Service Foundation, has one simple phrase in mind, that she believes will help any entrepreneur in search of confidence. That mantra is, “I can do hard things.” She knows that, “Everyone has to do hard things, even people we put on pedestals. We can all do hard things but we have to believe in ourselves, and then we have to act.” Hope repeats this phrase to herself, “I can do hard things.” to her team members, “we can do hard things,” and her friends, “you can do hard things.” to remind everyone of, “the incredible power they hold within.” Less victimhood, more taking control. Less wanting it to be easy, more courage when it’s not. “The action is what separates the dreamers from the doers,” she added.

Remember your past wins to feel invincible in your own ability, embody your most confident version to start acting as they would, and talk to yourself to prepare well and keep jumping over hurdles that cross your path. Three powerful tactics for instant confidence, that entrepreneurs like you have tried and tested.

Real estate is considered one of, if not, the best investment you can make. Housing has been very consistent throughout history, more so than any other type of investment, and outpaces inflation and the stock market. 

However, many people don’t invest in real estate because they assume it’s complex and requires a massive down payment to get started. It turns out that this is entirely false! Real estate can be pretty easy to get into! 

Whether you’re looking to go the traditional route of buying and renting out properties, renting out rooms, or buying multifamily units the same way you do stocks, there’s no shortage of investment opportunities for which you can take advantage. 

In this article, we’ll go over seven simple ways that you can become a real estate investor.

1. House Hacking

Do you have an extra room, a remodeled basement, or live in a duplex? One of the easiest ways to learn the basics of real estate investing is by renting out part of your home, or what’s better known as “house hacking.” Because you already own the rental property, you can do this at little-to-no cost to you!

Since you will be living with them (or at least close to them), thorough tenant screening is a must. You’ll have to research how much you should charge based on your space, the rental market, and your current mortgage payment. Also, account for hidden costs, like renter’s insurance and utility bills. Depending on your space, you may have to renovate it before it’s tenant-ready. 

By renting part of your home, you’ll enjoy passive income and gain experience as a landlord that can be invaluable if you decide to make larger investments. 

2. Long-Term Rentals

Many real estate investors get their start by renting out to tenants in long-term rentals. Most of the time, the property is a single-family home, which means only one tenant (or family) lives in them, but there are also plenty of multifamily properties (more than one tenant) that you can get started with.

Investing in long-term rental properties can offer several advantages, including tax benefits, financing options, and good cash flow.

From a tax perspective, rental property investors can deduct expenses such as property taxes, mortgage interest, and repairs, reducing their taxable income. This can result in significant savings come tax season. Furthermore, financing options such as traditional mortgages, private loans, and partnerships can make it easier for investors to acquire these types of rental properties due to how common they are.

Finally, rental properties can provide steady cash flow from monthly rent payments, allowing investors to build wealth over time and create a passive income stream. Long-term rentals are, in many ways, easier to manage and will give you reliable income compared to short-term rentals and other investment types.

3. Short-Term Rentals

Short-term rentals (a.k.a. vacation rentals) are properties that guests rent out on a nightly basis instead of monthly or annually. With sites like Airbnb and VRBO, real estate investors can list their properties, optimize pricing, schedule bookings, and enjoy an additional income stream. Many investors who dip their toes in the short-term rental space turn it into their full-time jobs.

Investing in short-term rentals can offer several benefits. One of the primary advantages is the potential for higher rental income compared to long-term rentals. Since short-term rentals are typically rented out for a few nights or weeks, they can command higher rates per night, resulting in greater cash flow for investors. Additionally, short-term rentals offer more flexibility in terms of occupancy, as the property can be rented out for a portion of the year and used for personal use during the rest of the time. This can be particularly beneficial for vacation properties or second homes.

Finally, short-term rentals can provide tax advantages, such as deductions for expenses related to the property and depreciation, which can result in lower taxable income.

However, investing in short-term rentals can have its drawbacks, and one of the most significant disadvantages is higher maintenance costs. Unlike long-term rentals, short-term rentals require more frequent cleaning, repairs, and replacements, which can increase the overall maintenance expenses. This also means that short-term rentals tend to have more wear and tear due to the higher turnover rates, which of course, increases your long-term maintenance costs. 

Another potential disadvantage of short-term rentals is that they are often subject to seasonality, meaning that demand can vary significantly depending on the time of year and location. This can make it more challenging to predict cash flow and occupancy rates. 

Overall, while short-term rentals can offer several advantages for savvy investors, it’s important to consider these potential downsides carefully before investing in this type of real estate.

If you’re not into short-term rentals but want better cash flow than long-term rentals, medium-term rentals could be a good middle-ground. They’re more profitable than long-term rentals and don’t share the same restrictions or time commitments some short-term rental owners experience. Medium-term tenants live in your properties for 30+ days but less than a year. These renters are typically traveling nurses, business professionals, and digital nomads. Plus, since they’re laying down (temporary) roots, they usually respect your property. 

4. Real Estate Crowdfunding

Real estate crowdfunding involves many people contributing funds to raise a ton of money so that they can buy real estate. Today, it’s one of the most popular investment options in real estate. The global real estate crowdfunding market grew to 10.78 billion in 2021 and shows no sign of slowing down.

Real estate crowdfunding has plenty of benefits. Here are a few to consider:

• Access to new properties: Not too long ago, access to many types of commercial real estate or niche residential properties like luxury high-rises was limited to just a few wealthy, well-connected investors. Crowdfunding allows more people to include these properties in their investment portfolios.
• Portfolio diversification: Owning property can be like owning stocks. A single unit or stock can make or lose you a lot of money. However, if you spread your funds across multiple investments (much like you do with a mutual fund), you’re reducing risk. 
• Passive income: Crowdfunding opportunities are operated by a fund manager or developer. They manage the property and pay dividends based on your contract’s terms and conditions. Beyond your initial research, you’re not required to do any extra work. 
• Affordability: Many real estate crowdfunding platforms have low buy-ins. While some require a minimum five-figure investment, other platforms, like Fundrise, let you start with just $10. 

While crowdfunding is great for passive investors, it’s not for anyone looking to make a quick buck. Your funds will be tied-up for extended periods (e.g., Fundrise recommends a minimum time horizon of five years). You’re also not in control of your investments and may be charged management and advisory fees.

5. Real Estate Investment Trusts (REITs)

REITs are another passive, affordable way to break into real estate investing. REITs are companies that finance, own, or operate properties and other forms of income-producing real estate. Many REITs focus on specific property types, such as residential, industrial, multi-use, retail, and office, and can be bought and sold through brokerage accounts. 

Collectively, REITs own over $3.5 trillion in gross real estate assets in the U.S. alone. More than 200 publicly traded REITs are on the market today, most of which trade for under $100. They must also distribute 90% of their earnings as dividends to maintain their tax-advantaged status, which means more money in your pocket. 

REITs can offer several benefits. One of the primary advantages is that REITs are highly liquid, meaning that investors can buy and sell shares easily on major stock exchanges, providing greater flexibility and access to capital. REITs also offer attractive dividend yields, providing a reliable source of income for investors. 

However, investing in REITs also has some drawbacks to consider. One potential disadvantage is that REITs can be subject to market volatility more potently than traditional real estate investments because they work off of share prices, which can fluctuate significantly. REITs are also not immune to interest rates, meaning that rising interest rates can lead to a decrease in the value of the underlying real estate assets.

6. Become Part of a Team

Successful real estate investors seldom work alone—and neither should you! Are you an investor-friendly agent, a general contractor, a house cleaner, a marketing expert, or simply have extra capital and an eagerness to learn? Join a team of other experts and invest together as you fix and flip houses or try the BRRRR method. Working with others allows you to ask questions and gain on-the-job experience. 

After teaming up with experts on a few projects, you may be ready to spearhead your own fix-and-flip and become an experienced investor. If you ever have any questions about a project, feel free to ask our forums! 

7. Real Estate Investing With the SMARTER Method

There are so many ways to invest in real estate. No matter your preference or where you are in your investment journey, BiggerPockets’ SMARTER Real Estate Investing System can help you navigate your path to financial freedom.

SMARTER is an integrated, lifecycle-based resource designed to help you grow your educational ecosystem and curate your professional network. SMARTER stands for:

• Strategy: Why are you investing, and what are your long-term goals? Answering these questions will help you determine how you should invest. 
• Market: Find a strong investment market based on your investment strategy.
• Acquisition: Discover how to find, analyze, and fund the best deal for you. 
• Rehab/Rent: Dive into the ideal make-ready process and prepare your property for tenants.
• Tracking: Find the best platforms and tools to manage your cash flow, work orders, expenses, and more.
• Exit: Explore how to successfully exit or exchange your property and maximize your investment potential.
• Repeat: Repeat what’s working, learn from what’s not, and continue to learn and grow. 

As a SMARTER investor, you will discover many of the simple ways you can become a real estate investor and figure out which method(s) should work best for you. Are you ready to work SMARTER, not harder? 

Conclusion

Real estate investing has evolved a lot, especially in the digital age. Every day people have access to more investment opportunities than ever before, and why the sheer number of ways you can invest in real estate can be daunting, you should take a glass-half-full approach. Rising interest rates and inflation aside, there’s never been a better time to become a real estate investor. Get started today! 

Join the Community

Our massive community of over 2+ million members makes BiggerPockets the largest online community of real estate investors, ever. Learn about investment strategies, analyze properties, and connect with a community that will help you achieve your goals. Join FREE. What are you waiting for?

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

Who would have thought that a software company charging its users could be such a controversial topic. But there’s a lot to the Twitter debate, and everyone is weighing in with their opinion. In October 2022 Elon Musk bought Twitter for $44 billion. Just after, he declared the platform’s legacy approach to verification a “lords and peasants system” that was, “bull***t.” Now, he’s taken a stand and changed the playing field with new program Twitter Blue costing $8 a month and including the once coveted blue tick. But who is playing ball and who is refusing to take their seat?

Dillon Kivo is CEO of Authority Titans, founder of Kivo Daily and Wall Street Journal bestselling author of The Authority Playbook. He works with influential entrepreneurs and aspiring personal brands to create them an online presence that secures their reputation and creates opportunities. Having successfully secured Twitter, Facebook and Instagram verification for his clients, Kivo has mixed feelings about what entrepreneurs should do about Twitter’s new system.

I interviewed Kivo about why entrepreneurs should or shouldn’t pay to become verified on Twitter.

Here’s why entrepreneurs should pay for Twitter:

Access more features

“There’s no doubt that paying for Twitter Blue brings access to more features,” said Kivo. “It’s a compelling proposition.” Subscribers of the programme not only get a verified blue checkmark once reserved for notable individuals, but they can post longer tweets and longer videos. They have the chance to undo a tweet just before it’s actually sent and they can edit some tweets within the first 30 minutes. There’s a new Top Articles section and two-factor authentication security options, as well as increased visibility.

“If you’re an existing Twitter user, these additions will enhance your experience for sure,” said Kivo. Twitter users have been begging for the ability to edit tweets since the platform’s inception in 2006. Now you can edit to your heart’s content, but it’ll cost you. With the new Twitter Blue revenue firmly in place, users might hope that these features keep expanding. Musk himself said he enjoys hearing what users want, recently tweeting that negative feedback is “great for reducing [Twitter’s] ego-based errors.”

Achieve better engagement

In his tweet on 25^th April 2023, Musk confirmed a suspicion many held, that verified accounts are now prioritised. Exactly what this means is shrouded in mystery, but you can be pretty sure that your tweets will show more prominently in the timelines of your followers and perhaps that your replies are somehow set apart too. Maybe more weight is given to your retweeted and engaging content, maybe you get suggested when users search for who to follow.

“Paying $8 a month to be seen by more people in your target audience makes sense for most entrepreneurs,” said Kivo. “Especially if you’re already active on Twitter, it’s like buying a cheat code that gives you rocketfuel instead of petrol.” So why wouldn’t you do that? Businesses pay for premium listings on directory sites all the time. Twitter Blue is transparent; you’re not trying to fool anyone that you don’t pay. Thanks to years of visibility, blue ticks on Twitter give a first impression of legitimacy, so capitalise on the brand to benefit your business and see it as a simple advertising cost.

Subscriptions are common

Although the media would have you believe there’s more to this than meets the eye, on the surface, Twitter’s verification program is simply a software company with 450 million monthly users, looking to grow by adding a subscription service. How else does a software business monetize? “Facebook makes money by running ads; selling user data to advertisers. But how many people would prefer to pay and see no ads?” asked Kivo. Twitter is testing that theory and ascertaining the appetite.

“It’s totally normal to pay for Netflix,” said Kivo, “so why not Twitter?” Software platforms aren’t free to run. Servers, data and customer support cost money, which has to be recouped somewhere. Estimates put Twitter’s ad revenue at $3bn, whereas Facebook’s is reportedly ten times that. Under new management, most businesses cut old services and add new ones. Musk is clearly not afraid to trial and error his way to Twitter success.

Access more features and achieve better engagement by adding one more subscription to your list of several. That’s why entrepreneurs should pay for Twitter Blue. But there’s a flipside to this story that we’re exploring in more detail.

Here are some reasons entrepreneurs shouldn’t pay for Twitter.

If you don’t focus on Twitter

Twitter is by no means the only social network. Once part of just a handful of platforms, creators are now seeing results doubling down on TikTok, YouTube, Instagram, blogging or podcasting. LinkedIn organic engagement is high right now and podcast listenership numbers are growing exponentially. There are plenty of other options for your time and energy. “If Twitter isn’t your main social platform, it might not make sense to become verified,” said Kivo. Divert your efforts elsewhere and forget about Twitter entirely. “You can even edit your bio to tell your followers where you’re active.”

On a similar note, if you can’t justify the spend because you’re not seeing the return, forget about Twitter all together. A social media manager used to be one person; now that job title doesn’t really exist. Completely different skills are required for each platform, and it’s the same with your activity. If you’re not prepared to be Twitter-first, you can’t just repurpose old content and expect it to fly. Go hard or go home.

You don’t like Elon Musk

If you don’t like Musk or don’t agree with his methods and principles, you might not want to pay to become verified on Twitter. “If you have to like and trust the CEO of any company you buy from, keep your cash out of his pocket by not paying for Twitter Blue,” Kivo suggested. There are several people on this bandwagon, who believe Musk charging for verification is either an abuse of power or a shameless bid for cashflow. They are vocal about the potential for impersonation, new scams and misinformation that can come as a result of anyone with a debit card having access to a blue tick.

“Does paying for Twitter Blue mean you endorse everything Musk stands for?” asks Kivo. If that’s the meaning you have assigned, then think carefully before upgrading your account. You have to be able to live with yourself. If your principles are strong and stubborn, and you’re prepared to compromise any potential business gain to stand by them, take your $8 a month elsewhere.

It will change again in future

With all the changes that have already happened since October 2022, there’s a strong precedent for more to come. Twitter somewhat backtracked on removing legacy ticks, reinstating them for some users who hadn’t subscribed. Who’s to say this won’t change again in the future? Maybe Twitter Blue will mean blue ticks, Twitter Gold will mean gold ticks, and there will be a whole other class for the “notable but not paying” class of user. Who knows. Biding your time could be the right strategy as the dust settles on each decision.

While you’re waiting for Twitter to regain stability, do other promotion instead. Kivo recommends you, “get press in notable news outlets, focus on your product and become genuinely noteworthy.” A better offering means more customers, which means a bigger company. This can lead to the fame and fortune you might have previously associated with being verified on Twitter. “There are plenty of other ways to build your brand online,” added Kivo.

Pay for Twitter if you want to access the additional benefits of doing so, if Twitter is a platform on which you are very active, or if you’re comfortable with a monthly fee for something that you use and get benefit from. Don’t pay for Twitter if you don’t focus on Twitter, if your dislike of Elon Musk is getting in the way, or you want to see what happens before you get involved. No one will force your hand either way, the choice is completely yours.

David:
This is the BiggerPockets Podcast Show 760.

Dave:
People are eager to buy into the housing market right now. Affordability is low, but as soon as affordability improves even a little bit, people are sort of jumping back in and are buying. Denver where I mostly invest, which was up until a couple weeks ago, one of the markets facing the biggest corrections. Activity there has just exploded over the last couple weeks. So I think it’s way too early to say the correction is over, but I am surprised by how brief that correction so far was.

David:
What’s going on everyone. This is David Greene, your host of the BiggerPockets Real Estate Podcast. Here today with a bigger news episode co-hosted by my buddy Dave Meyer, and we’ve got a great one for you today. Dave, how are you?

Dave:
I’m great. It’s good to be back. I feel like we haven’t done this in a while and I love doing these shows.

David:
These are some of my favorites and a lot has gone on in the world of real estate since the last time we did this. So we have quite a bit to talk about what were some of your favorite parts of today’s show.

Dave:
I am just sort of fascinated about what’s going on in the housing market as I always am, but I think people will be kind of surprised to hear the state of the real estate market because the headlines and reality are not exactly aligned right now. And I also really liked what you shared at the end because not everyone in the real estate investing education space shares the challenges that they have, but I think you shared some of the challenges in today’s market that even really experienced investors like you experience.

David:
Dave, I think you also made a great point. If you listen to an episode a month ago or you watched the news three weeks ago, our market is shifting more quickly and with more volatility than it’s ever has in my lifetime, and these shows become that much more important, which is why we keep bringing them to you. But you may be surprised when you listen to today’s show to hear about some of the changes in the housing market.

Dave:
Yeah, I mean people always say like, oh, real estate’s not the stock market, and it’s not like it doesn’t change that quickly, but it’s definitely becoming a little more volatile and I guess newsworthy. The things are really changing at a much faster pace than at least I’ve experienced in my career, which makes for really interesting things to talk about and discuss like we do in this episode.

David:
And we are going to get into that soon. Before we do, today’s quick tip is brought to you by Dave Meyer himself. Dave, what do you have for us?

Dave:
Yeah, so I wrote a report trying to summarize what has been going on in the housing market and macroeconomics through 2023 thus far, and you should go download it. It is completely free. Just go to biggerpockets.com/q2update. Q2 like quarter two, so it’s biggerpockets.com/q2update and I gave you all my thoughts, all the data I can find about the housing market to help you make sense of this weird and confusing market and give you the ability to make informed and smart investing decisions nonetheless.

David:
All right, so make sure you go check that out. It’ll be good for you, much like your vegetables, but it tastes good because it’s written by Dave. Let’s get to our first headline.

Dave:
Our first headline for today is obviously about inflation. We got new data that showed that inflation year over year has dropped to its lowest level in two years, but is still pretty high by pretty much any standard. The headline CPI, which takes into account the broadest set of goods and services came in at 5%. We also saw that monthly it went up just 0.1%, which was encouraging and it did come down from 6% in February. So the headline data, at least to me, David, I’m curious, your opinion was somewhat encouraging.
On the other side though, we did see core prices, which for anyone who’s not familiar excludes a lot of volatile things like food and energy costs. Those seem to be a lot stickier and they actually went up just a little bit and is now higher than the headline CPI. It is now at 5.6% and it grew 0.4% in just a month. So what do you make of this new inflation data?

David:
Man, I mean it’s going up even as we’re taking such drastic efforts to keep it from going up. That’s the part that ruffles my feathers a little bit. If it was just happening on its own naturally. But with the Fed and the government locked in on how can we stop inflation, it feels like it’s their number one priority and it’s still creeping up like that. It makes you wonder what it would be doing if we weren’t making these great efforts.

Dave:
That’s a good question. I hadn’t really thought about. That’d be like 40%, we’d be like Turkey. Turkey has 100% inflation or like Argentina.

David:
Yeah, I have this analogy shocking that I used to describe what I see happening with inflation, where we’ve printed a lot of money, we have more supply, but imagine that we just 10x the amount of diamonds that were in circulation, it’s not like the population, the common population would know that there’s 10 times the amount of diamonds, they would probably still be selling at the same price of what diamonds cost. And then one day you’d go in there and you’re haggling over the price of a diamond and the 20 year old working at the diamond shop is like, all right man, fine, that’s cool. I’ll do it. And you’re like, oh, that was kind of easy. And you tell your friend and they’re like, really? I was actually thinking about getting diamonds for my girlfriend for Christmas. And so they go in there and they’re like, you think I could get that for 30% off. And the person’s like, it’s the 30th of the month, I got to hit my quota. All right, and I’ll throw in this too, and holy cow.
And then someone posts on Facebook and everybody starts to realize you could get diamonds cheaper. At that point, the price of diamonds would start to go down and then it would just become a free for all like, how much can we get these things for? You’d be seeing people pushing the limit of every way they can because diamonds are inherently less valuable when there’s more of them.
I look at the situation with our economy in a similar way. We’ve made more dollars, but we didn’t go tell everybody. Not everyone knew that there was a lot more dollars floating around. So stores ownership, people that are producing the goods, they’re raising the turkeys, they’re having eggs, they’re growing the food. They’re not just going to jack the price up, they’re going to test to see, well, how much can I charge? How much can I raise it? And then as people keep paying it, they just say, oh shoot, we can do this more. And this ripple effect is sort of moving all throughout the population, both from things measured in the CPI and things not measured in the CPI including the real estate market.
So I think we’re sort of in this era now where people that charge for their services or goods are testing to see how much can I get away with because we’ve increased the money supply and even though we’re doing everything we can to slow that down, I feel like it’s inevitably going to continue. Do you think that my analogy falls apart with your understanding of macroeconomics, that the diamond analogy isn’t the best way to look at it?

Dave:
No, I think you’re right in that as there is a huge increase of supply in money and how that ripples through the economy is obviously still being filled. And to your point, no one a year or two ago was like, oh, they printed trillions of dollars. I’m going to raise prices 20%, right? I mean even as a property manager, as a landlord, people weren’t doing that with rent. They were probably raising it a little bit and reacting to both their increased costs and people’s willingness to pay. And it does seem like that has continued, but I am encouraged that it’s slowing down at least.
At least the headline is slowing down, and this is a little wonky, but there is a good indication that the core prices will start coming down in the next couple of months, but it’s just going way slower than anyone had hoped. But I do think it is probably peaked and it is going to keep going down. It’s just going to be a bit slower and more painful than we expected it to be.

David:
I hope so. I feel like inflation is one of the most dangerous things that happens to your finances because you don’t see it coming. It’s a carbon monoxide. When taxes are increased, when tariffs are increased, when there’s something that’s just out there in the open that you can see, you can prepare for it, you can make wise decisions, but with inflation, you never know. You just go to the gas station and it’s more expensive. Or you go to the grocery store and all of a sudden the steak that used to cost $11 is now $24 in here, especially the people trying to eat healthy. Have you seen this in the sandwich market or deli’s just crushing me right now?

Dave:
Oh, it’s insane. My friend sent me a $29 sandwich he saw the other day. He didn’t eat it, but that’s crazy. But I think your point about it being slow is so true because also the way it works is that it’s not always the same thing that’s been going up a lot. For example, used cars went crazy. Now they’re actually back down to below where they were pre pandemic, but food prices are still up really high, for example, and have shown really not a lot of signs of slowing down.
So I think that’s where you see a little bit of an abatement or it gets better for you in one area and then it’s a whack-a-mole situation where every once in a while it’s going. And I think to your point, it just takes time for that to ripple out. And one of the good things about… it’s not good, but one of the things that is hopeful I should say is that the way that we know and track rent in the CPI is like it’s still showing that rent is going up a lot right now, like 8%, 9%, but that is one category that we know from private sector data, like has been going down or at least flatlined for almost a year now.
And so the way the CPI tracks this rent is really slow. And so even though that’s like the mole that’s popping up right now and is pushing core CPI high is rent, we know that it’s actually down. It just takes a while for the CPI’s poor methodology to show that. And so that is why personally I’m hopeful that it will start to go down, the core CPI, but it’s going to be a while. I don’t realistically think it’s going to be, you know, we’re get the 2% target this year, but I do think we’ll get significantly closer to that by the end of 2023.

David:
Yeah, I definitely hope so because if we all got job cuts at work, we’d be furious. If they came in and said, you’re getting a 10% decrease in pay or a 5% decrease in pay. But if food goes up by five or 10% or the things you have to buy, it’s the same thing in practical terms. And so it’s hurting especially the people that are not listening to podcasts like this that are not financially savvy, that they’re not really aware how things work. They’re just a good old fashioned, I show up, I put my boots on, I trade time for money, I use that money to go buy the things that I need. They don’t realize that this is happening. And if you’re not buying assets, if you’re not buying things that appreciate with inflation, you’re getting hammered.
So congrats everybody who’s listening to this, you’re already in a stronger position.

Dave:
Totally. And the other thing about inflation that I think is so damaging is that just destroys economic confidence, which is really important for an economy. People need to believe that things are going in a good direction for the economy to grow. And we’ve seen this over the last couple of years because there have been some parts of the economy that have done well over the last year, but since inflation is so bad, it has just been overshadowing all of the economic bright spots that there have been and that leads to a downturn.
Economic sentiment really matters, and I think we really just need to get inflation under control. As painful as it is, we need to get it under control so that people start feeling confident about their own financial positions again and that the decisions they make about their spending are sound because prices aren’t going to go up and they can plan for their future appropriately.

David:
That’s a very good point. And it’s not just with the financial system that’s kind of with our country as a whole, with the world as a whole. We saw what happened when you get a bank run, what happened to Silicon Valley Bank and other banks. In fact, the Fed had to come out and say all deposits will be protected just to stop that from happening because when everybody panics, it doesn’t take much to take down an entire system that we all rely on.
So when people lose faith in the strength of the dollar or the economic system, can create panic like that movie The Purge kind of highlights how we just live on this fringe line of safety that we all have this unspoken societal agreement that we’re not going to kill people, we’re not going to just take things that we want. There’s a consequence for that, but when that breaks down, it can lead to just crazy bad times. And we’ve seen that throughout history at times, and so one of the reasons we’re talking about this is we definitely don’t want that going down.

Dave:
I like using The Purge as an example. It’s a good movie.

David:
In some more housing news. We have a housing market recovery that seems to be taking place. So a couple points to note here. In March, mortgage rates ended the month over a 30 basis points lower than where they started and more buyers have returned to the market. Home prices fell a year over year in February. The median existing home sale price decreased by 2% in February compared to a year ago. And housing starts, which I wish we paid more attention to, increased to 9.8%, nearly 10% with building permit applications rising almost 14% from January to February while mortgage rates decreased 6.32% in the last week of March.
Now housing starts mean that that’s obviously that there is a lack of supply. It means that builders have confidence that if they build these houses, people will buy them, just like you talked about with people needing to have confidence in the financial system. Many decisions are made based on the psychology of the market. Like what will people do if we do this? So the housing market seems to be heading in a good direction. What do you think about this so far?

Dave:
I am surprised. Let me just say that I personally, if you listened to on the market, I’ve said it on this show, have never to date been convinced or even thought that a “crash” was probable. I didn’t think that over the last year or two when people were saying interest rates are rising, they’ve gone up quickly, price are going down 20%. I’ve never really believed that. I’ve said repeatedly that I think houses prices will go down this year is the most probable case, but probably under 10%, somewhere like three to 8% declines. That said, and so I still believe that.
But that said, I did not think that we would start to see this much activity in the market in Q1. I kind of thought it would take until the Fed paused raising interest rates, maybe we get some more stability in mortgage rates that we would start to see people jump back in.
But what it feels like, and I’ve talked to a few agents and lenders, so I’m curious your opinion on this, David, is they’ve said that anytime rates go below 6.5%, people are just calling them instantly. That seems like some magic number and it just shows that people are eager to buy into the housing market right now.
Affordability is low, but as soon as affordability improves even a little bit, not even as much as I would expect, people are jumping back in and are buying, and this is happening obviously in certain markets more than others. But Denver where I mostly invest, which was up until a couple weeks ago, one of the markets facing the biggest corrections like activity there has just exploded over the last couple of weeks.
So I think this is fascinating. I think it’s way too early to say the correction is over, but I am surprised by how brief that correction so far was.

David:
We’re seeing the same thing in California when rates went down, it was three or four weeks ago, our escrows on the David Greene team jumped by almost 50% in that period of time. It’s immediate. So oftentimes we look at lagging indicators like, well, houses aren’t selling right now or they’re not selling for as much or they’re selling for less. And we don’t look at the fundamentals of why we just look at, oh, the CPI’s up or the CPI’s down, houses are selling or houses are not selling.
Well, my theory was there’s all this money sitting on the sidelines that’s waiting, and the minute you get the smallest chink in the armor, interest rates come down a little bit. Boom. Everybody comes flooding in and it’s like every house is getting five or six offers. They’re back to non-con contingent. They’re back to all cash sometimes. I mean it’s been wild to see how quickly that spark causes this huge fire. And so my theory is that there is a lot of money sitting on the sidelines and frankly, real estate feels safer than any other investment option still.
There may be money that’s waiting to jump back into the stock market. I’m not a stock market expert, so I can’t comment on that. There may be a big crypto community that’s waiting to see that they’re going to rush back in. I don’t know how other asset classes work. My theory is everyone’s worried about every asset class that isn’t real estate and even though it is not easy to get cash flow, that’s because there’s so many people that are competing for these assets and we’re not making more of them frankly.
So I think it’s positive if you own real estate and you want to see the value of it increasing and it’s positive if you’re trying to feel good about should I be buying or a price is going to crash, it’s not so great if you’re the investor who wants to get that great deal. And you’ve been hoping that prices would continue to decrease and competition would continue to go away.
With the spring buying season ahead of us. Dave, what do you think home buyers should anticipate in regards to prices and inventory levels?

Dave:
Why do we have to make these predictions? It’s so hard. I will say this. I think that that prices are going to follow a normal seasonal pattern, and this is going to be nerdy, but basically David, you’re probably aware of this, that prices go up in the spring and the summer, then they peak somewhere around July and then they slowly go down until December, January. That happens every single year basically. And I think that pattern is going to happen just slightly lower than it was last year. That’s basically what we’re seeing.
Prices are down 2% year over year, but they are going up, like prices are up from January to February they went up. From February to March, they went up. But March of 2023 is lower than March of 2022. And so I think that is sort of the pattern that we’re going to see that prices are going to stay mildly below where they were in 2022. But I think that right now things are changing rapidly, but the way where we’re sitting right now in the middle of April when we record this, I think the spring and summer seasons are going to be pretty busy. What do you think?

David:
That’s how it’s looking right now. Great news, if you’re somebody who owns property, not great news if you’re someone who is looking to get a great deal, but I agree with you and you made me think of someone you were talking, Dave, if I brought you a deal, great neighborhood, like B+, A- neighborhood in California with a 20% cash on cash return the minute that you buy it, would you jump on that deal?

Dave:
Yes, absolutely.

David:
Right. I would move heaven and earth to get to that deal, right?

Dave:
Why? Do you have one of those?

David:
I wish.

Dave:
Could I have it?

David:
There was a time in 2010, 2011, 2012 where we turned those down because the 20% ROI was not sexy enough to get us interested. We were looking for 25%, 30% on a deal before you can make it work. And now if you just have a 2% return, we’re like, Hey, that sounded pretty good. I can make that work. It has to do with expectations, and those expectations are based off of what we see when we are looking at deals like your brain looks like that. It looks at all your options and it wants to find the best ones.
Just keep this in mind that so many people are willing to pay what they’re willing to pay for real estate. They’re willing to get the smaller cash on cash return because they’re comparing that to other asset classes where it is either way riskier or there is no cash on cash return, whereas real estate still makes money in a lot of different ways.
People get tax advantages from it. People can shelter their W2 income buying short term rentals. People can get out of the job that they don’t like and replace that with real estate, even if it’s not a huge cash on cash return, if it’s getting them their time back, they’re more likely to do it. They know that they’re going to have rent increases over time. They know the property’s going to increase. There’s lots of ways real estate make money outside of just that ROI that you get from the cash flow right off the bat.
As people are trying to find safe places to put their money because of that I word we talked about earlier, inflation. Real estate is continuing to be the most attractive looking vehicle. And then we haven’t even talked about the fact that most of these buyers are not investors. They just want somewhere to live.

Dave:
Yeah, totally. Yeah. I mean everyone’s makes a big deal out of investors and the share of properties that go to investors has gone up, but 70% of properties are sold to owner occupants. So it’s like that is who is driving this majority. And we talk about it’s boring, but good old fashioned demographics people are having, there’s a lot of millennials who want houses right now, and that doesn’t go away that much.

David:
That’s right. Your competition’s not listening to BiggerPockets and running ROI. They’re just looking at their rent going up and saying, I want my own mortgage.

Dave:
Yeah, exactly. All right. Our third headline is about de-dollarization. Have you heard about this recently?

David:
No.

Dave:
Basically the US is the dominant currency reserve in the world, and that is a bit complicated, but in short, basically in order to make international trade easier and to stabilize exchange rates, central banks like the Federal Reserve across the world hold other countries currencies “in reserve”. The US is by far the most, it’s 60% of the world right now. Of all reserve currencies is US dollars. The next biggest is the Euro and it’s 20%, so it’s really dominant.
But of late, there are some signs that dominance is cracking. So the examples are the BRICS nations. BRICS stands for Brazil, Russia, India, China, and South Africa. A lot of large emerging economies announced that they are going to introduce a new alternative currency to be used as reserve. China and Brazil have agreed to settle trades in one another’s currency. Russia and India said that they want to move away from USDs. The finance minister of Saudi Arabia said they were open to moving away from using dollars for oil and gas trades, which hasn’t been done since the 1970s, since the US went off the gold standard. So there’s a lot of signs that this might be happening, and I am curious what you make of all this.

David:
Well, now that you mentioned what it is, I have heard of it. I hadn’t heard of it called de-dollarization before, but it is, I think this is kind of significant. It’s one of those things that you wonder why more people aren’t more concerned about it. Maybe it’s just we don’t want panic to happen in the country. But one of the reasons if you don’t understand macroeconomics that we’ve been able to print so much money is that there is a demand for it across the world, is a short way to put it. Other people trade in our currency, so Oh, we made too many diamonds. We can ship a bunch of them off somewhere else. We can keep our own supply levels low. So the price of diamonds stays expensive, right?
Well, if other countries start saying, you know what? We actually don’t need to pay your diamond price anymore. We are going to use rubies for our engagement means or for our means of jewelry, and the demand for diamonds goes down, those diamonds all have to flood back into our country, which causes inflation. Much like you hear us talk about, we need to reduce our dependence on other countries for oil because if they’re the ones that produce the oil, they set the price, we have to pay what they want us to pay. We want to have our own oil so we don’t have to do that. Well, that hurts them economically. They’re doing the same thing back to us. And so what I see is that at a global level, it’s becoming more competitive economically, and if that ends up happening, that is a scenario that could lead to more inflation, which is what we started off today’s show. It seems like everything always comes back to that, doesn’t it, Dave?

Dave:
Yeah, it does indeed. I mean, I think that this is an issue. I have done a lot of research into this. We did an on the market episode that came out on April 21st. If you want to hear more about the history of how the US became the reserve currency, all that sort of stuff. And you can check that out on the market. But what seems to be happening is, one, like you said, David, other countries just don’t want to be entirely dependent on the United States for a few reasons that if you’re coming at it from their perspective sort of makes sense. One is that the problems in the US ripple through the rest of the economy. We saw that in 2008 that crisis financially started in the United States and then spread throughout the world, largely because there’s a lot to do with the US economy and they’re well intertwined.
The other thing is, as you said, the US has flexed a little bit being the currency reserve country on the geopolitical stage, and when Russia invaded Ukraine, they seized, the US government seized 300 billion in Russian reserves. And so other countries are looking at that and they’re like, we don’t want to let that happen. What I don’t think is happening is I haven’t heard any country say “We’re not going to use dollars”. I think what they’re saying is they want to get more parity. Because if the US is 60%, the Euro is 20%, everyone else is like 20%. They want to create a system where they’re not too reliant on any one country.
The thing is, there isn’t really another contender to the US dollar right now. And so I do think because all these countries have stated that they want to do this, that it will probably reduce the US’ share over time, but until another currency comes along, that actually makes sense. I think it’s not going to be a pressing issue, but this is obviously not my area of expertise, but from the research I’ve done, that’s sort of what I’ve gleaned.

David:
I think that’s wise, but it does show the intention, right? So I don’t think this is something that in the next two months we’re going to see it changing anything. This is one of those things that you need to pay attention to this because five years down the line, 10 years down the line, significantly big changes could have happened. That’s a terrible way to phrase that. But significant changes could happen to a big magnitude that started at this point right now. And a lot of people like, they just want to know what, what’s going on right now? What do I need to know? Where’s the deal at? How do I get an opportunity? I just want give me, give me, give me right now. I just want my 15 minute reel that tells me where my 15 second reel that tells me where I’m supposed to buy.
It’s not wise to look at it that way. It is wise to slick about what’s happening at the big picture and then make your individual decisions based on the current market, but your overall portfolio should be based on what you see happening at a national level.

Dave:
Yep, absolutely. Well, so again, if you want to learn more, we talk about some surprising benefits that could happen if the US is not used as much. Some of the other risks, there definitely are risks and benefits. So check out that episode of On the Market if you want to do that. But David, what’s our last headline here?

David:
Our last headline has to do with vacation home demand, which is a trend that has been sweeping the country. It’s been all the rage for the last several years now. Demand for vacation homes is down by more than 50% to pre pandemic or from pre pandemic levels. The number of people locking in second home mortgages dropped to its lowest level since 2016.
So curious, Dave, do you think that the high interest rates are scaring off buyers looking for a second home, or do you think it has more to do with saturation in the vacation home, like short-term rental market?

Dave:
Oh, man, I like this question. It’s something I really like talking about, but I think it’s a combination of things. So interest rates definitely, right? People might be willing to bear higher interest rates for primary residents because that’s important to them for reasons that go beyond finances. Second home, it’s like, all right, I don’t need a second home, so I’m probably not going to pay 6.5% Interest rate on that. I think that is one of the major things.
The second thing is the work from home craze is stabilizing. Now, if you look at the data, it shows that work from home seems to have peaked. It’s come back down a little bit. Less days are being worked from home, but it’s flatlined now. It’s pretty stable. And so I think the idea what happened during Covid where people were like, oh, I just want to get the hell out of this city in this little shoebox that I live in, and I’m going to try and get somewhere with some more space or somewhere that I can spend time with my family and maybe not be in close proximity to other people.
That rage seems to be over. And then I think the third thing that’s really important here is other asset classes. Like people, the crypto markets and the stock markets went absolutely insane for two years and people were taking money from the stock market. They were taking money from crypto and they were putting into real estate. They were flush. And they were like, I’m going to go buy a house in the Smokey Mountains or in Joshua Tree or wherever. And now that is also not true.
So it seems to me there’s like this confluence of different things that are going on that are dissuading normal people from buying it. And then I think with investors, when you look at the oversaturation of the market, they’re probably scaling back and it just seems like demand in these markets might be down for a little while.

David:
I think that’s a wise assessment. I think you’re spot on there. The vacation rental home really did disrupt the balance of the housing market in general. Before you had Airbnb, VRBO, everything was different about real estate. There was no 30% cash on cash returns that you could get getting a home unless you bought in 2010. You had a way for market distress. You couldn’t just buy in a healthy market, get a return like that. Well, vacation rentals changed it so people flooded into those markets.
People like me got involved not just for the cash on cash return, but I’m like, I can own a house in Malibu that isn’t going to bleed money every month. I can make money on a beach house in Malibu. I can buy in Scottsdale, Arizona. I could buy in these wonderful markets at grade A location, location, location. This is where you want to own real estate. And I could turn it over to a property manager and I could make money off of this thing.

Dave:
Do nothing.

David:
Exactly. Now I’m soaking up inventory that used to go to people that just were wealthy people that wanted to live on the beach in Malibu or wanted to live in South Florida. They wanted to live in Scottsdale. I’m also driving the prices higher because I’m willing to pay way more for that house than someone who’s just going to live in it because it’s going to make me money.
In a sense, it’s not that we don’t care about the price, it just isn’t a significant factor. If I could pay 200 grand over all the other homes, but that property’s going to make me 60 grand a year and I’m going to do nothing, it’s worth that to me. So what we started to see was inventory that used to just go onto the open market for regular people to buy a home sucked up by these short-term rental investors.
We also saw people getting into rental property investing that were not involved because they could make it work with short-term rental investing. We also see now tax benefits going to people that are making good money outside of real estate, that short-term rentals open up doors.
So all these people flood in and they’re buying short-term rentals and it’s like the new gold rush. Everybody’s going to California to strike it rich. And then you get there and you realize, oh, this is not like I thought this is a bloodbath. I’m competing with all the other people. I could actually lose money here because so much money came into this. The neighbors are making my life hell. The cities are now trying to respond to this new trend, and they’re overreacting, they’re shutting people down. They’re just trying to run a normal business. It’s sort of inflexion. And it’s in chaos right now.
So it does not just surprise me that we’re seeing vacation home demand go down. It was ridiculously too high. People were buying vacation homes that were never intended to be vacation homes. They’re just using that loan in order to get in for 10% down and still buy short term rentals.

Dave:
I totally agree. That’s a great point about the regulation too, that that’s another thing that is still shaking out. And I think if you combine that with all the other risk factors right now, the risk is just pretty high in my mind, there’s a lot of risk.

David:
Oh yeah. I got in, this is just an anecdote for my life. I’m sure it’s not a statistic that would work across the country, but I got into several vacation rental markets, bought properties that were already licensed by somebody else, and as soon as the neighbors saw the for sale sign on the property, they knew it was going to change hands. This has happened to me over six different short-term rentals that I bought. The neighbors in every one of these properties joined together, formed a coalition, went to the city government and called the city planning department and have done a coordinated effort to stop me from getting licensing on this property.

Dave:
People really don’t like it.

David:
But I’m saying this because I don’t want other people to get in the same boat. I bought the property having no idea this was going to happen. And that has happened to be over six different properties across the country, all from neighborhood coalitions that are like, we don’t want short term rentals. And this is not like house parties being thrown. This is literally just this hatred for real estate investors that has made its way known. And I know that as people are listening to me talk, they’re thinking the same thing. Yep, I’m going through that. I’m going through that. It definitely has put a damper on the demand for that asset class.

Dave:
Yeah, for sure. I mean, you probably just scared like 50,000 people away from wanting to buy a short-term rental. So demand’s going to be down even further.

David:
Yeah. That’s the tip of the iceberg for what problems that I’m having with those properties. But that’s one of the things that can happen when you need to go through a municipality or a government. It’s very easy to get caught up in these weeds that you can’t necessarily get out of. Whereas if you buy a property that neighbors don’t care about, you could do your work without permits, you could not have a license at all. Nobody even sees anything about it. So short-term rentals are complicated. They’re a situation ship, they’re not a relationship. Try to avoid getting in those sticky situations if possible.

Dave:
Okay. We have a new report for you. It is 100% free for anyone listening to this. It is something that I wrote. It’s called the State of Real Estate Investing, and it basically just summarizes all of the macroeconomic and housing market conditions that are really influencing the decisions that we all as investors are making right now. It’s really easy to use. It’s a hundred percent free. You could just find that on BiggerPockets.com. Just go to biggerpockets.com/q2update. Like quarter two. That’s biggerpockets.com/q2update, and hopefully it will help you make informed decisions as an investor. And of course, if you have any questions about it, you can always hit me up. So go check it out.

David:
Yes, you should go check that out. And Dave, it’s been so nice to see you again. There you have it folks. We have inflation, the housing market recovery, de-dollarization and vacation home drama, all brought to you by the good people here at BiggerPockets. This is David Greene, for Dave the $29 sandwich man, Meyer signing off.

Dave:
Just to be clear, I did not eat it, but I want to. I would. If I’m being honest, I would.

“Not all readers are leaders, but all leaders are readers” was first quoted by Harry Truman and the Truman Library Institute has President Truman’s recommended reading list to prove it. Though times may have changed since Truman shared his reading list, reading is still vital to becoming a better business leader. The following books will help you get started.

1. The Predictable Profits Playbook — Charles E. Gaudet II

In The Predictable Profits Playbook: The 7- and 8-Figure CEOs’ Guide to Generating Consistent and Sustainable Growth, Charles E. Gaudet II challenges leaders to examine why one entrepreneur has to struggle through eighty hours a week just to make half as much as the entrepreneur working twenty. He debunks the age-old beliefs of working hard and clawing your way to the top, sharing advice on building the right processes, systems, and teams.

In this book Gaudet shows entrepreneurs how to boost marketing dollars that results in a consistent revenue stream.

2. Change Your Mindset, Change Your Life — Garrain Jones

Author, coach, and speaker, Garrain Jones has surmounted difficulties and obstacles most will never encounter. Jones’ mission is to help others dig out the gifts inside them, so they can follow in his footsteps and live extraordinary lives.

In Change Your Mindset, Change Your Life: Lessons of Love, Leadership and Transformation, he shares his proven strategy that changing your mindset can change your life. Jones breaks down the aspects he deems vital to becoming and living a successful life. He helps leaders determine what is holding them back from greatness, how to build confidence, and the importance of positive thinking.

3. Agile Companies — MJV Innovation

This book encompasses concepts on business transformation, design, thinking, and agility. MJV Innovation is a global consultancy to Fortune 500 companies around the world.

In their newest book, the MJV Innovation team teaches readers how to produce more value for customers and distinguish themselves from the competition. Agile Companies: A Practical Guide breaks down MJV Innovation’s five work models – Scrum, Kanban, Scaled Agile, Metrics, and Design Thinking. This book teaches entrepreneurs about the Agile mindset, business agility, and management systems that focus on managing systems, not people.

4. The Extraordinary Power of Leader Humility — Marilyn Gist, PhD

Professor Marilyn Gist knows about leadership and has successfully taught students how to be great leaders for years. In fact, she led the development of the leadership EMBA degree program at Seattle University, which is ranked eleventh best in the nation. One of her core beliefs is that leadership is a relationship, and as such, she believes that humility is key to healthy relationships. Humility both inspires and motivates.

In The Extraordinary Power of Leader Humility: Thriving Organizations & Great Results, Gist offers entrepreneurs a model of leader humility based on the questions people ask of their leaders. She includes educational case studies as examples and provides recommended behaviors for readers to grow as leaders.

5. Mind Your Mindset — Michael Hyatt and Megan Hyatt Miller

Leaders deal with limiting beliefs. The way to conquer them is by redirecting your brain to tell a new story. Leaders who test their assumptions, live truer stories, and experience higher level outcomes in business and in life.

Michael Hyatt is the founder and chairman of Full Focus, a performance coaching company. Megan Hyatt Miller is the CEO of Full Focus and the architect of Full Focus’ standout culture. In Mind Your Mindset: The Science That Shows Success Starts with Your Thinking, these bestselling authors and leaders outline a framework drawn from insights in psychology, neuroscience, and cognitive science.

6. Dare to Lead — By Brene Brown

Brene Brown is a research professor at the University of Houston who has spent decades studying courage and vulnerability. In Dare to Lead: Brave Work. Tough Conversations. Whole Hearts., Brown combines that knowledge with research she conducted with leaders and change makers.

Brown believes leadership is not about titles, but a leader is someone who takes responsibility for recognizing potential in people. Brown answers the question of how to cultivate braver and more daring leaders. It’s a must-read for anyone who wants to be a brave leader.

If improving as a leader is a goal for you this year, add these books to your shelf. Each one provides a valuable perspective and helpful information.

Real estate prices fluctuate based on supply and demand, but because so many demographic, economic, and policy changes influence the markets, it’s virtually impossible to know what to expect. 

Before the COVID-19 pandemic, for example, economists weren’t predicting a downturn in commercial real estate. Now, Morgan Stanley’s chief economist warns of a crash more damaging than the 2008 financial crisis. On the other hand, unexpected gains are common as well. In May 2020, Zillow predicted a drop in home prices and home sales followed by a slow recovery in 2021. But instead, a homebuying boom caused prices to skyrocket before 2020 came to an end. 

With the ever-changing markets, what seems like a good investment one year can look like a poor choice the next. But even with all the uncertainty, there are some enduring truths in real estate that you can always depend on as an investor. And understanding these tenets can help you navigate the shifting landscape with more confidence.  

1. Due Diligence is Essential to Every Deal

“Due diligence must always be done before you put any money into anything,” says Bradley K. Warren, Strategic Real Estate Investing Advisor at Real Estate Bees. “That is what most people fail to do, and it’s why they lose money when they invest in real estate.” It starts with market analysis to ensure a market is viable before you even look at properties. 

You may need to analyze market rents or construction costs and get estimates from property management companies or contractors to form an ROI hypothesis. Due diligence also includes analysis of property taxes and homeowners insurance when estimating a deal’s overall performance and extends to examining the physical asset as well—for example, you may want a mold inspection in addition to a standard home inspection. The more thorough you are, the less risky your investment will be. 

Warren also says to look at the track record of anyone you look to for real estate investing advice. “A lot of these gurus make more money selling their course on how to invest in real estate than they’ve actually made investing in real estate,” he says. Due diligence includes collecting references and evaluating past successes and failures of potential mentors. 

2. Location, Location, Location

This probably goes without saying, but location is everything in real estate, according to Kristina Morales, a Realtor with 20 years of experience in multiple markets. The right location can yield both greater-than-average cash flow and appreciation. 

Look for cities with growing economies and thriving cultural scenes, and identify neighborhoods that are safe and boast nearby amenities and green space. Even within the same neighborhood, one property may be better positioned for high returns than another. Get hyper-local and consider whether a property is too close to the freeway or too far from the park. 

3. Home Values Revert to the Mean 

Home prices tend to follow the principle of mean reversion. Following a period of rapidly rising prices, home values tend to fall until they reach the statistical long-term mean for that market. If prices have been rising exponentially in a market, that market is likely to experience falling prices. It’s why prices are expected to fall the most in pandemic boomtowns like Austin and Phoenix, where home prices skyrocketed due to an influx of new residents and other factors. 

The good news is that housing price increases during periods of appreciation are generally more pronounced than housing price decreases during a downturn from the fundamental value, or what is typical over time in that market. And investors can use this knowledge to buy while prices are low, waiting to sell until prices are high. Of course, knowledge of individual markets is helpful as well since home prices in cyclical markets like San Francisco tend to vary further from the mean than home prices in linear markets. But no matter where you’re looking to invest, remember that what goes up must come down. 

4. A Good Investment Requires an Upfront Exit Strategy

“Be clear about your exit strategy before you even invest,” says Warren. That’s because knowing whether it’s a short-term or long-term investment changes your approach and what constitutes a good deal. Whether you’re aiming to rent the property for decades or flip it as quickly as possible, Morales says to purchase with your sale in mind. “Have the foresight that one day you are going to have to sell it,” she says. “And as an investor, what are those things that are going to draw renters to the property, or what is going to draw buyers to purchase your flipped property?” 

5. You Need a Good Realtor and Lending Partner in Any Market

“There’s no condition in which the value of your Realtor and your lending partner doesn’t play a crucial role,” says Morales. You might think that you don’t need a listing agent in a buyer’s market, but regardless of the conditions, building the right team is essential. Morales says people often run into trouble when they don’t interview prospective real estate agents. She says to ask questions, such as:

• How long have you been in the business?
• Are you willing to work with investors?
• Do you have experience working with investors?
• Do you know about this area?
• What resources are available should I need a contractor?
• What’s your negotiation style?
• What can I expect from you from an education standpoint?

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6. Even with the Best Tenants, There Will Be Conflicts

According to a survey from renters insurance company Lemonade, 36% of landlords say they resent some of their tenants. Even when you screen your tenants and establish good relationships with them, you should expect some disputes. It could be a disagreement over who’s responsible for a repair. It could be a violation of a community rule that causes tension. The important thing is to maintain open communication and be transparent while resolving the problem collaboratively. This can prevent conflicts from becoming costly court cases. 

7. House Price Cycles Are Long 

House prices generally cycle through four phases: A recovery phase, when prices are at their lowest. An expansion phase, when job growth facilitates demand for homes that leads to a low supply of homes. A hyper-supply phase, which is often the result of an attempt to meet demand, and finally, a recession phase. 

These price cycles are long, and it typically takes longer for prices to move from trough to peak than to fall from peak to trough. Getting from a price bottom to the prior price peak has taken a median of 6.7 years across metropolitan areas, but full price cycles from peak to peak can last decades. Some markets endure longer price cycles than others. For example, in 477 U.S. cities, home prices are still trailing behind where they stood during the peak of the early 2000s housing boom.

It’s worth noting that the National Bureau of Economic Research has only recorded a few dozen business cycles in U.S. history, with peak-to-peak durations varying widely and unique circumstances surrounding each downturn. It’s, therefore, difficult to confidently predict how the economy will respond to different drivers. Even while tracking numerous variables that impact economic behavior, economists are unable to predict a large share of recessions and often miss the mark in forecasting their severity, according to the International Monetary Fund. 

Even if investors watch for the warning signs, identifying the recovery phase (an advantageous time to buy) isn’t always possible. But one pattern is consistent, and that’s the extended duration of house price cycles. In other words, if you buy a property in a cyclical market when prices are at their peak, you’ll need a dose of patience if you want to capture appreciation. 

8. Diversification is Key to Weathering Recessions

If you buy a multifamily residential building that turns into a cash cow, you might be tempted to buy more multifamily residential buildings in the same area, but this is ill-advised unless you already have an array of real estate assets, like warehouses, vacation properties, REITs, and vacant land. 

Even if your knowledge and experience is with one particular type of asset, you should diversify your investments. “Have some money in a number of different areas,” says Warren. “Understand the wider investing strategy, so if one of your assets goes down, hopefully, others are going up.” Not only should you look to diversify within the real estate sector through both active and passive opportunities, but you should also hold non-real estate assets like stocks and bonds. 

9. It’s All About the Kitchen and Bathrooms

“Kitchens and bathrooms still sell. It’s probably the number one thing that will attract somebody to the home,” says Morales. The average ROI for a minor kitchen remodel is about 71%, according to the Cost vs. Value Report from Remodeling Magazine. Outdated kitchens and bathrooms, on the other hand, can deter buyers. Other buyer must-haves may be location dependent. Morales says people are looking for basements in Ohio, for example, and not having one cuts your buyer pool in half. Parking and privacy can also be deal-breakers.

“When you’re looking to invest in a property, think about its marketability regardless of the market cycle,” suggests Morales. A lot of times, people get caught up in the emotion when there’s no inventory. But you may not be selling in the same market, so think about the objections that the next person’s going to have about the property.” 

10. Real Estate Will Never Be a Perfectly Competitive Market

Investing in real estate is different from buying a potato from the grocery store because real estate transactions have too many complexities, constraints, and moving parts for the market to be perfectly competitive. Perfectly competitive markets (like agriculture) tend to have many sellers providing a homogeneous product and buyers who are knowledgeable and can buy the product easily and frequently. For perfect competition to exist, the market must be easy to enter without transaction costs or government policy constraining buying and selling activity.

In real estate, every property is unique, transactions are expensive and complex, buyer and seller knowledge is limited, available supply and demand often depend on government policies, and there are few participants in the market at a time. The real estate market isn’t perfectly competitive and probably never will be. But it’s interesting to consider whether real estate would become a more accessible or affordable investment if players in the market strived toward the elements of perfect competition—for example, what if zoning restrictions were lifted and technology allowed for lower transaction costs? 

11. Let’s Face It. You Can Never Have Too Many Properties

The more wealth you have, the more properties you’re likely to have. While millionaires owned an average of two homes in 2018, according to a report from Coldwell Banker, the nation’s demi-billionaires (the top 0.001%) owned an average of ten homes. Why? Perhaps it’s because smart investments in real estate are strong drivers of wealth for the ultra-rich. 

Or perhaps when there’s enough money to get a villa in Tuscany, a New York penthouse, an Aspen mountain chalet, and a California beachfront home, you don’t choose. You just buy them all. Whether demi-billionaires are racking up properties for enjoyment or to build even more wealth, the fact remains: There’s no such thing as too many houses. 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.