\n
Dave:
Hi, I\u2019m Dave Meyer, and you\u2019re listening to the very first episode of On The Market, so welcome. We are so glad to have you here. Personally, I couldn\u2019t be more excited to finally have this pilot episode air after months of dreaming up and working on this concept. If you don\u2019t already know me, I\u2019ve been investing in real estate for 12 years, and I am also the Vice President of Data & Analytics at BiggerPockets.
And in that role, my job is to give information a voice. I work with my teammates to connect the dots between data, trends, policy and world news, to help the organization make informed and confident decisions about our strategy. And through this role, it occurred to me that real estate investors could benefit from the same type of information gathering and analysis, so we designed this show with you in mind. In this show, we\u2019re going to bring you the information and news that impacts your investing.
We\u2019re going to undercover which markets we should be watching. What\u2019s with the metaverse? Are 3D printed houses really the future? What strategies work best in 2022? Our mission is to consolidate all the sometimes chaotic information, headlines and stories out there while analyzing and making it simple. On The Market will be your source for everything you need to know about the real estate investing world. And we\u2019re going to make this fun, actionable and easy to understand.
This is definitely not a boring news show where we\u2019re going to read off a bunch of stats and data in a monitory voice. If there\u2019s an opportunity to turn something into a game or make it goofy, I\u2019m going to do that. With that being said, I have an amazing group of expert investors with me in-person here today to assist me with this endeavor all with different life experiences, viewpoints and takes. Let\u2019s get to it. Today, for our very first episode ever, we\u2019re going to be going deep on the 2022 housing market.
That brings us to our first segment of the show, Between the Headlines, where we do just that. We\u2019re going to be looking between headlines to get to the point of every story. And we\u2019re not just going to banter about this, we\u2019re going to make this into a needlessly competitive game every week. And this week, our game is predict this, where the expert panel and I are going to be making predictions about the housing market.
I mean, I think you guys all agree, we all are very curious about what\u2019s going to be going on the rest of this year in the housing market. I want to get all of your predictions about where you see the housing market, and then we\u2019re going to come back to this at the end of the year and see how we all did. All right. But first, let me introduce our panelists this week.
We actually, we got a full house here. First, we have Kathy Fettke, who has been investing since 1997. But she says she\u2019s not a boomer, not quite a Gen Xer, more of a millennial trapped in a grandma\u2019s body. And just to be clear, these are Kathy\u2019s words, not mine. I did not write this.
But she is the co-founder of Real Wealth, where she\u2019s been helping thousands of busy professionals since 2003. Next, we have Henry Washington. You might know him from the real estate show in BiggerPockets. He\u2019s a fairly new investor who bought his first house in 2018 after having a panic attack about being broke. And now he owns over 70 doors and is basically still just trying not to be broke.<\/p>\n
Henry:
That\u2019s right, man.<\/p>\n
Dave:
All right, next, we have Jamil Damji, who is a Sagittarian wholesale genie, who also runs the nation\u2019s largest wholesale real estate operation. And he\u2019s occasionally on TV that\u2019s very modesty. He is on the A&E show, Triple Digit Flip, which you should definitely check out as well. Lastly, we have James Dainard, who is a veteran real estate investor, who has fixed and flipped over 2,000 homes in the Pacific Northwest.
No house for him is too damaged, too dated, or simply too disgusting for him. We\u2019re going to have to jump into that. From stepping into buckets full of human urine. Oh, we\u2019re dumping right into that. Animal encounters to brushes with death, James put the real estate in \u2026 I can\u2019t even get through this. James put the real in real estate investing. All right, I got to ask you about the human urine one later.<\/p>\n
James:
Lots of life experiences.<\/p>\n
Dave:
Okay guys, thank you guys all so much for joining me here. We are all here live in Denver for our very first show, which is super exciting. In this game, you all are going to make a prediction about some questions that I have prepared to you. I\u2019m going to give you a little bit of context, a little bit of data, and share some news stories with you and then ask you how you see these trends going over the course of 2022.
And we are going to revisit this at the end of 2022 to see just how well we all do at predicting the future. The first question is about rent growth. It just came out that rent growth was up 15% year over year in February. And we\u2019re seeing huge markets like Austin and Portland seeing 39% and 40% year over year rent growth. It\u2019s absolutely insane.
And actually, only two of the biggest markets in the US declined, sorry to Milwaukee and Kansas city. They did see rent declines over the last year, which is pretty wild. Jamil, I\u2019ll start with you. Where do you see rent growth going through the end of 2022?<\/p>\n
Jamil:
I think we still have a lot of room. I know that people aren\u2019t going to be happy to hear that, but there\u2019s \u2026 I don\u2019t think we\u2019ve caught up to it yet. The housing prices have spiked. The cost of buying a house, if you\u2019re going to have a rental or cash flowing rental, is increasing. I think rent growth is going to be at about 7%.<\/p>\n
Dave:
All right, 7%. So just for context, we usually really see rent growth about 2% or 3% per year, so you\u2019re seeing it away above average. What about you, James?<\/p>\n
James:
I think it\u2019s going to come in fairly heavy this year, around 10% to 12%. I mean, the fact that we\u2019ve already had a 15% increase in the beginning of the year is getting us that big jump, where I think \u2026 And the reason being is, A, we weren\u2019t able to raise rents for the last 12 to 24 months, so it\u2019s backlogged. We got to get those rents up.
And at the same time, the cost of housing has gotten so expensive the metrics are all out of whack. Typically, in Seattle, it\u2019s about 25% cheaper to rent than own, or it has been historically. And that gap has jumped so dramatically with housing prices. Now it\u2019s like around 30% to 40%. So I\u2019m seeing that gap\u2019s going to get filled pretty quickly.<\/p>\n
Dave:
All right, Kathy, what do you got?<\/p>\n
Kathy:
Well, it obviously depends on the market, and some markets will see the lower growth and maybe even negative, and some will be double digit again. But if you were to average it, I\u2019m going to go with half of what it was last year, because we\u2019re still going to have tremendous demand. So many millennials and Gen Zers now looking for a place to live and many people priced out of the market. So half of \u2026 What was it?<\/p>\n
Dave:
15%<\/p>\n
Kathy:
Oh, so it\u2019s 7.5%.<\/p>\n
Dave:
7.5%. Very precise.<\/p>\n
Kathy:
Yeah, thank you.<\/p>\n
Dave:
All right, Henry.<\/p>\n
Henry:
Yeah. I mean, I\u2019m on the same train, man. I think it\u2019s going up. I think you\u2019re going to continue to see a rise. Similar to what James said, you\u2019ve got plenty of people who kind of got on the boat early with raising rents to what these new market rates are and then you\u2019ve got the late comers, the people who\u2019s leases haven\u2019t expired yet, right? And so they\u2019re going to be coming up over the next year, and they\u2019ve been watching and seeing everybody like, \u201cOh, you can get that much now in rent?\u201d
So you\u2019re going to see that influx of rent raises. As well as most landlords, if they\u2019ve had somebody in for a long time, or if they\u2019re going to do a big rent raise, they also want to do some sort of renovation or sort of upkeep to the property. And the cost of materials is higher now, and so that\u2019s going to cost them more than it typically would so they\u2019re going to try to make up for it on the rent raises. So I think you\u2019re going to see somewhere around 10%.<\/p>\n
Dave:
All right. I\u2019m going to go high. I\u2019m with you, James. I\u2019m going to go with 12%. I just think that you\u2019re going to see, with inflation, wages are going up, and I think double digit rent could growth is in our future. All right, James, we\u2019ll start with you this time. What about housing price growth? This is on pretty much everyone\u2019s mind, whether you\u2019re a real estate investor or just a home buyer, maybe a real estate professional.
We\u2019ve seen incredible price appreciation over the last couple of years. And actually recent data from Redfin shows that in February, we were 17% year over year, which is actually the highest it\u2019s been since August. We were starting to see things starting to taper off a little bit over the winter 14%, which is still crazy in historical context. But now we\u2019re seeing it start to accelerate again, which is wild. James, what do you see for house price appreciation in the rest of this year?<\/p>\n
James:
I\u2019m going to cheat a little bit and I\u2019m going to answer this two ways. I think the homes that are above, the average above, the median home pricing, where the money is, I think those are going to appreciate continually fast. I think we\u2019re still going to see that 10% growth in a lot of markets, 10% to 15%. I think the first half of the year we are seeing that 15% to 20% growth pretty rapidly, and it\u2019s going to taper down towards the last three to four quarters.
I do think the first-time home buyer market in the more affordable markets, we saw this jump 10% to 15% in this first quarter, and I do think with interest rates rising that it\u2019s going to cut little bit of a clawback, and it\u2019s going to average out more like 5% to 8% in the first-time home buying sector with the rates adjusting. And then again, the luxury, I think it\u2019s going to continue to go up.<\/p>\n
Dave:
Yeah, it\u2019s a really interesting point given that affordability that is declining due to increased interest rates is probably going to hit that first-time home buyer lower end of the market harder than the more luxury market. But do we have one number for you? Because we have to grade your scores. You have to give me a number.<\/p>\n
James:
I\u2019m going to blend the two together then. I think year over year for this year, we\u2019re still going to see around a 10% to 12% growth. Because I mean, we\u2019ve already seen 20 in the first quarter, so if it slows down, it\u2019s going to average out.<\/p>\n
Dave:
All right. Henry.<\/p>\n
Henry:
Yeah, man. I\u2019m on the boat it\u2019s still going up, and I think it\u2019s going to go up in all segments. The reason being like you\u2019re the data guy, right? I don\u2019t know a whole lot about data and analytics, but I know about supply and demand.<\/p>\n
Dave:
You were just telling me you worked for Walmart doing data analytics for 10 years.<\/p>\n
Henry:
I did do data analytics for 10 years, but this is a whole different ballgame, man. We\u2019re talking real estate trends, and I mean, supply and demand. It\u2019s just there\u2019s way, way more demand than there is supply, and I think that\u2019s because obviously there\u2019s way more buyers. And so yes, there is a first-time home buyers pool who is going to be somewhat affected by higher interest rates, but still even these higher interest rates aren\u2019t that high in comparison to where they were 10, 12 years ago.
And so yeah, some people that were kind of on the cusp of home ownership will probably get priced out through raised interest rates. But you\u2019ve also got this pool of investors who want to put their money in tangible assets because the dollar is losing value you. And so you\u2019ve got more investors, you\u2019ve got people who are relocating all across the country because you\u2019re not tied to living where you work as much anymore.
And so you\u2019ve got this influx of buyers, you don\u2019t have enough homes, and I think that\u2019s just going to make the prices increase. Even with interest rates rising a little bit, they\u2019d have to rise pretty drastically, I think, to have a hugely lasting impact. But all I had to say, at the end of the day, I think you\u2019re still right around what James said about that 10% to 12%.<\/p>\n
Dave:
Okay. Kathy.<\/p>\n
Kathy:
I am going more conservative. Because last time we talked about this, I didn\u2019t really think the fed was going to be as aggressive, now they\u2019re really going for it. And I think they\u2019ve really realized that they overshot, printed way too much money. Inflation is way out of hand. And the only way they know how to combat it is raising rates, and they\u2019re going to go big. And that\u2019s a little concerning.
I agree with all of you, supply and demand is just completely imbalanced. But people are living somewhere right now. And even if it\u2019s a couch, if that\u2019s what they can afford, they\u2019re going to stay on that couch. So I\u2019m going with prices I do believe will still continue to increase. But again, I\u2019m going with half, and it\u2019s my understanding that it was about 15% median.<\/p>\n
Dave:
That\u2019s right.<\/p>\n
Kathy:
So I\u2019m going with 7.5%.<\/p>\n
Dave:
Okay, even.<\/p>\n
Kathy:
Yes.<\/p>\n
Dave:
All right, even odds. Jamil, what do you got?<\/p>\n
Jamil:
I\u2019m a little bit in the middle here. For me, I think that rising interest rates are going to do something, but we really have to pay attention to the other people at the table, right? And so if we look at real estate prices as a product or in relation to, let\u2019s just say, a dinner table, right? You have normal people eating normal meals typically, and you can say, \u201cHey, if I cook this many chickens, I\u2019ll be able to feed everybody.\u201d But what if you invite a professional eater to the table, right?<\/p>\n
Dave:
My dream job.<\/p>\n
Jamil:
What if you have David Meyer eating, right, who can eat more than everybody, right? That\u2019s what we have right now. We have a professional eater at the table, and they\u2019re gobbling up all the houses and they\u2019re \u2026 I mean, the secondary home buyer right now is crushing the average primary home buyer. You\u2019re a fireman, you\u2019re a school teacher, they\u2019re not competing. They are not competing.
And when they do compete, they\u2019re so emotional with what they\u2019re doing that they\u2019re driving prices ridiculously through the roof. I\u2019m seeing it on my flips. I\u2019m seeing it time and time again. I believe that we\u2019re going to have aggressive appreciation, but I don\u2019t believe it\u2019s going to be as aggressive as you guys think. I\u2019m going to go somewhere in the middle. I\u2019m going to call it 9%.<\/p>\n
Dave:
Okay, 9%. I like it. I\u2019m actually with Kathy. I\u2019m a little worried about rising interest rates right now. And I\u2019m going to say that the year over year mark in December will be somewhere around 6%, so maybe I\u2019m the most pessimistic. But I think what\u2019s interesting is because I believe rent growth is going to go up so much and housing price a little bit less, that means that cash flow prospects could actually increase, something we\u2019ll jump into later in the show.
Last question here is something that is on every American\u2019s mind, whether you\u2019re into real estate or not, which is of course inflation. The most recent CPI data showed 7.9% year over year growth, and that was led primarily by energy. We all know gas prices are up a lot. But prices were really up across the board.
Really, the only glimmer of hope is that car prices actually went down a little bit, but not in any significant way that\u2019s really going to be helping anyone out. So inflation, really high right now, and is obviously a huge factor in the housing market and the broader economy in general. Kathy, where do you see inflation going in 2022?<\/p>\n
Kathy:
Well, the fed is doing everything they can to slow it down. And generally when the fed wants something, they get it. I didn\u2019t think that they could really raise rates as much as they\u2019d like to because of the national debt. And can the US afford higher interest rates? But now, at least from what they\u2019re saying, they\u2019ve done a complete 180 from, \u201cOh, this is just transitory inflation,\u201d to, \u201cOh, we got a problem here.\u201d
And so with their aggressiveness and their intent to slow down inflation, I think they\u2019re going to do what they can to make that happen. With that said, I think it\u2019s probably going to go up. In the next few months, we\u2019re going to see some crazy terrifying headlines in the double digits because of supply chain issues and all that. But maybe that will start to settle down as demand starts to go back, as people have less money to spend it. And so with that said, hmm, let me just see what comes and pops in my head. 7.5%<\/p>\n
Dave:
Oh. All right.<\/p>\n
Jamil:
That\u2019s awesome.<\/p>\n
Dave:
All right. Jamil, what do you got?<\/p>\n
Jamil:
I think like Kathy said, the fed is going to get what they want, and they\u2019re going to do it in the ungraceful fashion that we typically see the fed behave in. And so I think they\u2019re going to be aggressively raising rates. I think that they will curb it. How much that\u2019s the big answer, that\u2019s the big ask. I think supply chain problems are going to start to settle down.
It can\u2019t remain the way it is right now and be real. Right? Because at some point, everything\u2019s got to come off the boat, right, or at some point people have to go back to work and start making things, I imagine. Right? So with that easing and with a fed policy, I think that we are still going to have upward pressure. But I don\u2019t think it\u2019s going to be in the double digits, so I\u2019m going to temper it and say 6.19.<\/p>\n
Dave:
Ooh.<\/p>\n
Kathy:
Wow.<\/p>\n
Dave:
Extreme accuracy.<\/p>\n
Kathy:
Very accurate.<\/p>\n
Dave:
All right. Henry, do you agree? Do you think the fed\u2019s going to get this under control and we\u2019re going to start to see this turn back around or are we in for worse numbers?<\/p>\n
Henry:
Yeah. No, I think Jamil hit it on the head, right? And we\u2019re starting to see it. Just as now, as we all traveled here, right, the world is opening back up, right? Things are starting to loop. When I was just on vacation in Hawaii, they lifted the mask mandate while we were there. Right? And people are starting to feel more \u201cnormal\u201d. Right?
I still think we\u2019re in a new normal. It won\u2019t ever be exactly as it was, but we\u2019re getting closer. And as we get closer, if interest rates are higher, supply and demand starts to balance out, and I think you\u2019re going to \u2026 I\u2019m in agree. I\u2019m not 6.19 in agreeance with you, and I\u2019m not 7.5. I\u2019m right about 7%.<\/p>\n
Dave:
Okay. All right. Everyone\u2019s going the same. James, what about you? Do you see it differently?<\/p>\n
James:
I think we made some major mistakes in the last 12 to 18 months that are going to take a lot longer than six to nine months to burn through. I mean, I know in my everyday purchasing of things, like construction, I mean, we\u2019re up 20, 25% on costs. And I think we\u2019re on the tip of the iceberg to having all these data points starting to come into the inflation real, and we\u2019re going to see it jump to like 9%, 10%.
I think there\u2019s other factors too, besides the world opening up. And I hear that a lot too, like, \u201cOh, the world\u2019s opening up now. Things will come off the docks,\u201d it\u2019s like, \u201cWell, we still don\u2019t have enough things in the boats.\u201d And I\u2019m on the coast of California all the time, there is a lot of boats out there, but even if they unloaded all of them, we\u2019re still going to be short on items.
And now we have this Russian-Ukraine conflict. There\u2019s going to be other chain issues. The more supply chain issues, the more expensive things are going to go. And I do think the fed\u2019s doing a good \u2026 They have the right plan, raising rates to get it under control, but this is not going to be a quick fix. This is going to be \u2026 I think it\u2019s going to spike towards the end of the year, and then in about nine months, we\u2019re going to start seeing it start taper down.
But this isn\u2019t something where they just raise rates and it flips the other way. It\u2019s we put way too much money in the market, the money\u2019s been cheap for too long and it\u2019s going to be kind of a settle down period. I\u2019m predicting, unfortunately, and I don\u2019t want it to be this way, I\u2019m hoping it\u2019s not, but more around 9%.<\/p>\n
Dave:
All right. Yeah. I mean, I hope you\u2019re wrong. But I do agree. I feel like we\u2019re starting to trend in the right direction. And this Ukraine-Russia conflict, you started to see gas prices go up, you\u2019re seeing wheat prices go up. And who knows what else can happen in the geopolitical sphere that could impact the US to some things that are completely out of the US control?<\/p>\n
James:
They were talking about food shortages. I mean, that\u2019s on the table. Things are getting expensive. I haven\u2019t heard that ever in my lifetime.<\/p>\n
Dave:
I do think we\u2019re also going to go up and see it increase. I don\u2019t think we\u2019ve peaked yet. But I\u2019m hoping we\u2019ll peak towards the middle or the fall. And I\u2019m going to just go with 6% and be optimistic, mostly because, I don\u2019t know if you guys have heard this, but there\u2019s this theory that expectations of inflation actually impact inflation.
If people believe there\u2019s inflation, prices actually go up. They demand higher wages, which increases cost for businesses. I\u2019m just going to put it out in the universe that inflation is going down and hopefully we\u2019ll all collectively start believing that and then inflation will go down. We\u2019ll we\u2019re doing our part [crosstalk 00:20:10].<\/p>\n
Henry:
So you\u2019re going full on self-fulfilling [crosstalk 00:20:12].<\/p>\n
Dave:
Yes, exactly.<\/p>\n
Henry:
Got it.<\/p>\n
Dave:
I have this-<\/p>\n
Jamil:
Let\u2019s just name this podcast Inflation Is Down.<\/p>\n
Dave:
Yeah. If we say it enough times, maybe we could do it. Okay, I do want to jump into what all of this means, because obviously you guys have brought some really interesting insights to the table. And we\u2019re going to spend most of the rest of the show talking about how take this information and craft a strategy for 2022, how to invest in this type of climate. But before that, I have to keep you guys honest. I don\u2019t know if you guys have seen the goat who predicts March madness or the octopus who picks like World Cup winners better than all of the experts.
And so Kailyn and I, Kailyn is our producer, before this show we decided that we would just get a bingo ball to prick random numbers to see if it does better or worse than all of us supposed experts at picking these things. So-<\/p>\n
Kathy:
This is harsh.<\/p>\n
Dave:
Well, maybe everything\u2019s going to come up 7.5%, Kathy, and you\u2019ll have it perfectly. All right. For rent growth, which is what we started at \u2026 How do I do this?<\/p>\n
Henry:
There\u2019s probably only one 7.5 ball in there, Kathy.<\/p>\n
Dave:
Yeah, I don\u2019t think we have fractions there. Rent growth is going down 10%. I think we\u2019re pretty safe at that. That\u2019s a negative 10. Yeah, I also, I doctored the [inaudible 00:21:30] so there were some negatives in there, because we realized they were all positive. All right. Rent growth is at negative 10%. Home price appreciation, a modest 3%.<\/p>\n
Kathy:
Wow.<\/p>\n
Dave:
I would actually love to see that personally, the chart, have a healthier housing market. And then inflation, I\u2019m worried about this one.<\/p>\n
Henry:
Even fate.<\/p>\n
Dave:
Negative 2%. Yikes. I don\u2019t think anyone\u2019s in danger.<\/p>\n
Kathy:
That\u2019s a little scary. All right.<\/p>\n
Dave:
Yeah. I mean, deflation is even worse than inflation, so hopefully we don\u2019t see that.<\/p>\n
Henry:
You need to bring the goat out.<\/p>\n
Dave:
Yeah, exactly. The octopus will do a lot better. We\u2019ll be back right after this message. All right, everyone, welcome back to On The Market. We are now moving into our next segment, which is called Due Diligence. And this is the meat and potatoes of the episode. This is where we\u2019re going to dive into a larger topic at length.
We\u2019re going to discuss large philosophical questions, trends, data in this section. And today, to continue the theme that we\u2019ve started with, we\u2019re going to talk about how to craft a strategy in 2022. Because as we\u2019ve all heard at the beginning of this show, things are pretty unusual in the housing market. And we\u2019ve heard that everyone really thinks we\u2019re going to see a bit more of the same, at least in 2022.
And I think for real estate investors, that brings up a lot of questions about how to invest in 2022. Kathy, let\u2019s start with you. How are you approaching the 2022 housing market, and how are you adapting your investing strategy to this unique climate we\u2019re in?<\/p>\n
Kathy:
We\u2019re kind of doing the same thing we\u2019ve been doing for 20 years, which is kind of sounds really boring, I guess. We\u2019re looking for those markets where there is growth, there\u2019s the demographic movement. And well, I should say migration. Migration patterns, job growth and affordability. A lot of people are talking about affordability lacking, but now with so much movement, for some people, things are more affordable than ever.
If you\u2019re moving out of New York City to Florida, you could buy a whole house, or rent a whole house for what you might have rented a studio for and had four roommates. And the same with San Francisco or LA, people are moving to Phoenix or to Arizona or to Las Vegas and Texas. This movement, we were already tracking that for years. We were helping investors buy in Dallas 15 years ago, when you get a house for $120,000 that was brand new and rented for 1,500.
People are still doing that, they\u2019re just going more into the suburbs with lots more money. They\u2019re armed with so much money, so much cash. People selling homes in high-priced markets, getting multiple offers and taking that cash and just going to buy somewhere cheaper. We\u2019re following the trends. Where are the jobs going? Where are the people going and buying in those markets? Right now, the strongest migration is into the Southeast. We love Florida, Jacksonville, Cape Coral, St. Pete. I\u2019m telling all my secret. St. Pete is-<\/p>\n
Dave:
It\u2019s too late. We got you on camera.<\/p>\n
Kathy:
\u2026 Oh, man.<\/p>\n
Dave:
You can\u2019t go back now.<\/p>\n
Kathy:
Okay. Well, forget about St. Pete. And then we\u2019re building. We\u2019ve been building homes in places like Bozeman, Montana, which a few years ago people were like, \u201cWhy would you do that?\u201d And the reason we did it was the land was cheap and there were no other builders. We were the only game in town. And now, well, Bozeman, I mean, thanks a lot to Yellowstone. You guys, tell me you watched it.<\/p>\n
James:
Great show. Great show.<\/p>\n
Kathy:
Well, we\u2019re like the evil developer in that show. But we got the land sheep and we\u2019re providing affordable housing in Bozeman. So just kind of staying where the big institutional investors aren\u2019t necessarily going, but kind of going near them or buying things that they\u2019re not interested in. And just areas where we could see there was growth. Again, Bozeman, there\u2019s a huge university there and there was just not a affordable housing. So it was a great opportunity. There\u2019s going to be opportunities, but it\u2019s just kind of getting under the radar, finding where people are moving, but nobody else knows that they\u2019re moving there.<\/p>\n
Jamil:
They do now.<\/p>\n
Dave:
Yeah, it\u2019s not too late. Henry, what about you? I assume you\u2019re just going to stop buying and pack up shop.<\/p>\n
Henry:
Yeah, I\u2019m done. I\u2019m out. No, man. Absolutely the opposite. We talked a little bit about this prior to the episode, right? Real estate investing is like any other investment strategy, right? The general concepts are pretty simple, right? Buy low, sell high, or in the case of most real estate investors, buy low, rent, keep them forever, right? Because the reason real estate investors keep their property forever is because appreciation always wins out, right?
The appreciation is coming if you hang onto your property in the long term. And so are we changing our strategy? No. We\u2019re still in the market of finding undervalue homes. And then we add value to them, and then we make a profit on them by renting them or selling them, right? And the market does shift from time to time. In very few cases, it\u2019ll shift so rapidly that you have to pivot pretty quickly.
But I mean, this isn\u2019t 2008, right? We\u2019re not playing the same game right now. And so even if the market starts to head a different direction, if you\u2019re good at identifying opportunities, right, and then purchasing those opportunities and adding value to them, you\u2019re going to have some time if things start to shift for you to change your strategy. And so our strategy has always been buy a property that you can monetize in more than one way. Or said differently, buy property with more than one exit strategy, right?
If I buy a property, a single family, a small multifamily, I\u2019m looking to make money on it as a rental, but I can also make money on it as a short-term rental, or I can make money on it as a flip, or typically I can sometimes just make money on it by calling another investor saying, \u201cHey, do you want to take this off my hands?\u201d Right?
And so it\u2019s more about getting good at finding those opportunities. And in this game, opportunity comes where you\u2019re helping someone out of difficult situations. If you can eyeball and find those opportunities and buy those opportunities, you\u2019re always going to be fine. I would say the thing that\u2019s going to be a little different now is maybe how to find the money to buy those opportunities. Right?
Because if the interest rates are rising aggressively, then bank money is going to be a little more difficult to get. It\u2019s going to cost you more. And so you just need to weigh your options. Bank money has never been the only money out there to buy real estate with. Right? There\u2019s tons of options. And so there\u2019s always going to be private money out there. There\u2019s going to be hard money out there. There\u2019s always going to be bank money out there on some level.
And so you just need to weigh your options, maybe how you go about finding the money to buy the deals changes. But for us right now, we\u2019re staying the course. I love the small multifamily and single family space. And you\u2019re always able to identify opportunities to buy at a discount. And if you can do that, you\u2019re usually pretty safe.<\/p>\n
Dave:
That\u2019s great advice. I think given interest rates being so low over the last couple years, people assume that bank money is the only money. And frankly it has been the best money over the last couple years when you\u2019re seeing interest rate at 3%. But people have been buying real estate when interest rates were at 15% or at 20%, or even in the \u201990s it was between 5% and 10%. It definitely can still be done. James, you said that you were a little worried about the lower end of the housing market. You see inflation going up really high. Is that changing what you\u2019re doing in your strategy?<\/p>\n
James:
Yeah, there\u2019s been two major shifts that we\u2019re making for this next year. One is we are focusing on a little bit more expensive areas. We want to focus in the areas where the jobs are, where the money are. The one lesson I really learned in 2008 was we got our teeth kicked in 2008. And the reason being there wasn\u2019t access to financing. The money wasn\u2019t there. People had lost a lot of wealth at that time.
And because of what we\u2019ve done over the last 18 months, 18, 24 months, I\u2019ve seen this huge gap in wealth, right? People with money have made a lot of money, whether it\u2019s stocks, Bitcoin, real estate, assets in general, and those people continue to have it. And so as I\u2019m looking at my short-term projects, I\u2019m going, \u201cOkay, where is the money not going to dry up?\u201d
The first-time home buyer pool is very financing independent. And the higher that rate goes, if it goes up a point, that can bring 10% down in affordability. That\u2019s going to throw a lot of weird metrics when you\u2019re throwing performance on deals.
And so we\u2019re going where the money is. I\u2019m doing more luxury flips. We\u2019ve also targeted. We\u2019re a heavy tech space in Washington. What do they make? We know that the average Amazon person, there\u2019s two types. There\u2019s the single Amazon employee. They buy 750 to 900. That\u2019s the sweet spot. And then when two Amazon employees fall in love and they get married, which happens now all the time-<\/p>\n
Dave:
Your dream as a real estate agent, to get the Amazon couple.<\/p>\n
James:
\u2026 Yeah, maybe we get a little Apple, little Microsoft mix. I mean, those are even better due incomes. The sweet spot is 1.5 to 1.8. We know exactly where the money is, and so we\u2019re actually building more town homes now because it\u2019s falling in play to that space. The other thing that I am avoiding right now, we\u2019re heavy construction guys. We do a lot of serious, studs-down renovations, manipulate buildings.
But as inflation\u2019s soaring, and it\u2019s harder to track, you don\u2019t know exactly what your renovations cost is going to be. So we want to put less materials in. Hedge that bet to where we\u2019re doing less work there. And in addition to, the value ads are great because you get huge discounts, but a lot of times you\u2019re not going permanent financing on that. With hard money or soft money, you\u2019re not getting your actual financing until 12 to 18 months down the road.
If I\u2019m looking at a deal, the rates are right now at like 5%, which is way up from where it was. And it jumps to six, that\u2019s going to throw all of my off. As we\u2019re going into a frothy market, I\u2019m trying to hedge against different variables, inflation, interest rates rising into shrinking the timeframes. So go where the money is and then staying in a manageable timeframe to kind of mitigate any kind of risk.<\/p>\n
Dave:
That\u2019s great advice. Jamil, I wanted to ask you, because something I hear constantly is that there are no deals right now.<\/p>\n
Jamil:
Lies.<\/p>\n
Dave:
And it sounds like it\u2019s all lies. All right, well, you already answered my question. I mean, it seems like all four of you are fairly bullish, maybe with some caveat shifting your strategy a little bit and wanting to be cognizant of the market. But if you\u2019re excited to invest in real estate, how are you finding deals? And how do you recommend people listening to this should find deals in this kind of market?<\/p>\n
Jamil:
Great question, Dave. And I think that\u2019s very true, that there\u2019s a gripe that people say there\u2019s no deals out there, but that\u2019s absolutely inaccurate. Because this whole concept of there being low inventory, we\u2019re talking about a different type of inventory. We\u2019re talking about retail product. We\u2019re talking about the houses that people have already improved.
The kind of product that someone\u2019s going to go get traditional financing on, move into, or a hedge fund\u2019s going to buy and turn into a rental, whatever that is, it\u2019s a different kind of product. The kind of product that we go after as wholesalers is distressed property, distressed situations, and life hasn\u2019t changed. In fact, it\u2019s gotten worse for a lot of people. And because it\u2019s gotten worse for a lot of people, these opportunities still exist.
Now, I\u2019m not talking about going in and being predatory. I think the thing is you go in and you do it in a way where you can pay homeowners 100% of as is value. But again, let\u2019s look at this. If there is a house that\u2019s been renovated five doors down that had $80,000 or $90,000 put into it, there has to be a gap between what I\u2019m buying your house for and what I\u2019m going to be able to sell that house for.
All the players in that space, they understand the product that we\u2019re trading in. And so we\u2019re going after ,again, just the pre-foreclosures are back, right? They\u2019re definitely there. The tired landlord exists. And even though they\u2019ve gotten all this equity, they are not interested in possibly raising rents. They don\u2019t want to do this cashflow. They don\u2019t want to do the capital improvement that they\u2019re going to require to increase rents. They\u2019re willing to sell at the height of their market based off of the product that they\u2019ve got. And I\u2019ve seen opportunities in multifamily right now.
I just did a deal where I made $450,000 on one transaction, one six-plex, where all I did was I had one vacant unit. I had five units rented at $1,200 a month that were basically month to month. One vacant unit that I was able to rent out at 1,700. And then I flipped that six-plex to a buyer and made $450,000 on that. And I literally sold that days after closing. And I just put another one under contract. So these landlords exist. These opportunities to spot potential exist.
And that\u2019s all we\u2019re doing as real estate investors guys. You\u2019re looking for potential. Don\u2019t let anybody fool you out there. When you\u2019re looking for a deal, you\u2019re looking for a potential, so how do you do this properly? Learn how to underwrite. Learn how to underwrite. Learn how to underwrite. Understand if you can figure out how much something should cost based off the condition it\u2019s in right now, you\u2019ll spot potential.
If you can spot potential, you can avoid the frothiness that James is talking about. As a wholesaler, I\u2019m in and out of a transaction. I very rarely take title. Think about that. If I\u2019m making money without ever having to hedge risk, I\u2019m in a good place. And I made money as a wholesaler when the market sucked. I made money as a wholesaler when the market\u2019s great. And I\u2019ll make money as a wholesaler when the market sucks again. That\u2019s why I think that, that as a strategy will never, ever end.<\/p>\n
Dave:
Are you investing and are you wholesaling, I should say, because you think there\u2019s risk in the market right now, or is this what you just do in any market?<\/p>\n
Jamil:
I think I wholesale because I have PTSD from my first go around. I have done well in real estate multiple times. And the first time I did well, I was more in the development phase. I was condo converting. I was taking old apartments, converting them into condominiums. I had a lot of leverage. And because I had a lot of leverage, and I didn\u2019t understand on how to mitigate that well, I got hurt.
As a wholesaler, I hold a lot of cash. Now, of course I\u2019m losing value in my cash because of inflation and whatnot, but I\u2019m still very well positioned for any black swan event. And we are seeing this. 2020 showed us that we never know what\u2019s going to happen. Right? The octopus will very likely win.<\/p>\n
Dave:
Randomness [inaudible 00:36:22], right?<\/p>\n
Jamil:
Randomness. It\u2019s just the way the universe works, right? It\u2019s entropy. Things are random. And random things are always going to mix stuff up. And if we can count on the randomness of things getting mixed up, then I can just say, as a wholesaler, I\u2019m always going to be there to cash in on the randomness.<\/p>\n
James:
Wholesalers are also getting paid right now. It is. I\u2019ve been wholesaling for 20 years, never been paid like this before. So you get no risk and you get all reward.<\/p>\n
Dave:
Is that just because it\u2019s so hard to find a deal on the MLS?<\/p>\n
James:
Yeah. And it\u2019s also just the perception that everyone thinks that there\u2019s not a lot of deals. It\u2019s put the new pairs of glasses on. I buy better deals on market than I do off, but people want that off-market deal. It\u2019s like I got this thing that no one else has, and they lose their minds over it. But if you put the right pair of glasses on, you can look at different spots and you can find all sorts of different opportunities. But wholesaling is a great business to be in right now. Low risk, getting paid, and people are making a lot of money on it.<\/p>\n
Jamil:
Yeah. Dave, I shared with you earlier just our stats, right? February we did 66 transactions, near a million dollars in assignment fees. This month we\u2019ll probably hit somewhere close to 60 transactions. This is just our corporate stores, not our franchises. And we\u2019ll do over $1.4 million in assignment fees.<\/p>\n
Kathy:
Wow.<\/p>\n
Jamil:
I can\u2019t get that in a rental.<\/p>\n
Kathy:
I want to be you in my next real estate life. But I really want to emphasize something that\u2019s so important that you said, that we are in a changing market. The tides are shifting. You\u2019ve got to be aware and you need to be more careful. And one of the ways to be more careful is not over-leveraging.
And so many people are just going wild and crazy out there with their leverage. Anything can happen, so just be wise about that. Short-term loans, be careful of those. Because we don\u2019t know where we\u2019re going to be in a few years. And if you\u2019ve got a refi, you don\u2019t know if the money\u2019s going to be there. What we know is the money\u2019s going out of market right now. That\u2019s the tide.
It was flooded over the last few years and now it\u2019s being pulled out and that will affect us. So be careful of that leverage, get low LTVs, at least not 100%, 80% or lower. Be very, very careful, and get long-term debt when you can. Because even with rates going up, they\u2019re still low. They\u2019re still incredible.<\/p>\n
Dave:
Super. I mean, if you look, before The Great Recession, mortgage rates, at least as far back as I\u2019ve seen data, were never below 5%. Now everyone expects that. You expect, oh, 4% is so high. It used to be 3%. Because people have this fear that they\u2019ve missed out on something. But it is still really low. But Kathy, could you explain for people who might be newer to real estate investing what it means to be over-leveraged, and why perhaps using less leverage is a more conservative or safer strategy going into this market where we all agree is somewhat uncertain.<\/p>\n
Kathy:
Well, I came into the industry as a mortgage broker years ago, and boy, was it easy to get loans. Those were the good old days. Oh. There was unlimited investor loans that you could get with no money down. How about that? How about that? That was great, until it all fell apart, right? Because people didn\u2019t actually qualify. I love leverage. I love borrowing at low interest rates. It\u2019s a wonderful thing. You get in trouble when you don\u2019t have reserves.
If you have very little reserves, and you get a high leverage situation and you can\u2019t make those payments, that\u2019s the problem. So just make sure you have plenty of reserves. And expect that if you\u2019re holding rentals like we do, have six to 12 months reserves set aside in case there\u2019s vacancies. Things happen to tenants. Just make sure you\u2019ve got \u2026 Again, the reserves is most important.
And then that short-term debt back in 2007, I thought I was really great at investing because we\u2019d bought so many good deals in Dallas. And then I tried it somewhere else. We went to Tennessee and we got construction loans on three homes. And they were ballooning in a year once the homes were built. They were great deals. Everything was fine. The problem was the market fell apart and there was no loans to get.
They changed the rules. The rules can change. The laws are enacted. And in this case, now it went from unlimited investor loans to 10, and we were way beyond that. We had no loans to get into, even though we had these fabulous deals. The construction loan was due, it was a balloon note and we couldn\u2019t pay it. And we had to give those properties back to the bank and we lost all our money on those.
Again, it\u2019s the short-term loans that can get you in trouble. If you\u2019re going to do construction, try to get a construction-to-perm loan, where you lock it in now, you get the construction loan and it converts into a long-term debt. There\u2019s still ways to play the game. Just be careful, and know that what exists today may not be there tomorrow or next year.<\/p>\n
Dave:
Henry, I\u2019d like to get back to something you said about this earlier, that there\u2019s other types of financing out there other than bank loans. Are you continuing to use bank loans, and how are you applying leverage in this market?<\/p>\n
Henry:
Yeah, absolutely. We are still using bank loans because typically it\u2019s still cheaper money. It was just way cheaper money before they were raising rates. But it\u2019s still pretty competitive. Yeah. But have started looking at and are shopping out over several hard money lenders, and then I\u2019ve recently brought on two different private lenders. And they all kind of have their different lending niche and their different percentages that they want as far as interest rates go.
And so I look at lending, it\u2019s just another tool in the tool belt. A bank loan is one tool. It just so happened that, that hammer worked on all the projects because the money was so cheap. Now you\u2019re going to have to get a little more crafty with your money and with the tool that you use to take down your deals. And so the more relationships you can build, and that\u2019s truly what this is, is people want to know that their money is safe with you, right?
They are concerned about the deal, but they\u2019re mostly investing in you. And so if you can focus on building good, strong relationships, you obviously need to do good projects in order to give people confidence. But they\u2019re getting the confidence in you, not in your projects. And so if you can build strong relationships with people who have money, whether they\u2019ll be hard money or private money. And the difference between hard and private money for folks is people who have hard money are people with lots of money who are in the business of lending the money.
Private money are people who aren\u2019t in the business of lending money, they\u2019re just willing to lend you some of their money, and so the rates and terms can be a little different. But real estate has been an investment vehicle for people. You heard Jamil say it. He\u2019s made money in up markets and down markets. Most wealthy people who understand real estate understand that they want their money in that space, no matter the market, which means somebody\u2019s there that\u2019s going to be willing to lend to trustworthy people who they feel like is going to get them a return on their money.
If you can focus on finding those quality deals, and Kathy was right, you can buy a good deal, you want to couple that with a loan product that\u2019s not going to fall out underneath you in 12 months. Right? Safety net is your cash reserves and your equity, right? Because if the market shifts, and it starts to shift and you can see it coming, and you\u2019ve got equity, you\u2019ve got time to sell and still make a profit. You\u2019ve got time to change your strategy. Your equity and your cash reserves are your safety net.
If you\u2019re going to go out there and pay over asking price for something, because you\u2019re like, \u201cAirbnb is killing it. I\u2019m about to go buy this $5 million mansion with four of my buddies. We\u2019re going to turn it into an Airbnb and we\u2019re going to make a whole bunch of money,\u201d and then the market turns on you, you\u2019ve got no other excess strategies, you don\u2019t have any cash reserves, you\u2019re in a short term loan, you\u2019re in a world of hurt, right?
You just have to be careful of your strategy. Make sure you\u2019re buying with some equity and use a product that\u2019s not going to fall from underneath you in 12 months. And I think you can get out if you need to.<\/p>\n
Dave:
That\u2019s great advice. One thing I keep hearing about is that with rising interest rates, it always leads to negative home appreciation. And there were times when that was true. But before The Great Recession, we did see a really strong correlation between interest rates going up and housing prices going down. We all know that interest rates are going up.
I don\u2019t think anyone thinks that\u2019s going to taper off anytime in the next couple months. But at the same time, all five of us said that we think that the housing market is going to continue to go up. James, can you tell us a little bit why you think that\u2019s going to happen? Why is it different now? And why do you think that despite rising interest rates, we are still going to see home prices appreciate?<\/p>\n
James:
It comes back to money again. Interest rates are rising, but the amount of capital and what employee wages are in Washington and that are growing, the wage increase is offsetting a lot of this home pricing increase. Now, if you\u2019re in a market that doesn\u2019t have that same job growth and income growth, that\u2019s where you might see that negative appreciation.
But what we know in Washington is the reason we think it\u2019s going to keep going up is we have Amazon come out and they said that they want their \u2026 They doubled their execs max salaries. It went from 175,000 to 350,000.<\/p>\n
Dave:
What? Are you serious?<\/p>\n
Henry:
Holy bowly.<\/p>\n
James:
That\u2019s where I\u2019ll double down in that market. I think it\u2019s still going up. The money-<\/p>\n
Dave:
I mean, I\u2019m going to quit right now and go apply for a job at Amazon.<\/p>\n
James:
\u2026 We\u2019re trying to hire. And I got jobs up for EAs, accountants. And these are well paying jobs because we\u2019ve had to make them pretty well paying. I can\u2019t even get people to apply because these tech companies eat up the market. And so depending on where you are, there are these juggernauts in the market to where it won\u2019t affect things as much.
In our local market, I don\u2019t think \u2026 The interest rates will rise, but it\u2019s kind of like gas right now. For some population, the cost of fuel is annoying. For some population, it\u2019s detrimental. And so depending on the geographical location in, where you\u2019re investing in, what the demographic in, you\u2019re still going to see that appreciation.
I\u2019m doing it more based on a Pacific Northwest. I think we\u2019re going to look pretty strong. And a lot of these other markets, Austin, I mean, these growing cities with growing jobs, it\u2019s still going to offset the interest rates.<\/p>\n
Dave:
I have a question for all of you guys. Do you guys see a lot of people, experienced real estate investors sitting out in this kind of market?<\/p>\n
James:
No.<\/p>\n
Kathy:
No.<\/p>\n
Dave:
What would you say, Jamil, to people who are sitting out? It seems like every experienced investor is continuing to buy right now. I think we all agree. There are some warning signs in the market. We all think it\u2019s going to go up, but things are a little weird. No doubt. Why do you think that everyone who knows real estate really well is bullish on this market?<\/p>\n
Jamil:
I think because, again, they\u2019re seeing who\u2019s sitting at the table. It\u2019s when you have different players at the table, things change. Historically, look, if you look at housing prices from the 1930s to today, housing prices have gone up. And there\u2019s been hurt in between. There\u2019s been moments of depression. There\u2019s been things that have happened, but they\u2019ve still gone up. So no matter what you look at for temporary blips, housing will go up.
Now, knowing that, and then knowing that you have a professional eater at the table who\u2019s gobbling up all the houses, that is changing the demand. It\u2019s just changing the game. And the professional investor is looking at the landscape and they\u2019re saying, \u201cI\u2019ve never seen this big guy eat all these hot dogs. I\u2019ve never seen this before, but now I\u2019m sitting at this table with him and I\u2019ve got to do what I\u2019ve got to do to get my hands on as much as I can to at least compete,\u201d because we are heading towards a housing crisis.
I believe we\u2019re heading towards a housing crisis. We are not building enough homes. We don\u2019t have enough inventory. We will always be needing houses. We will always need them. Look, if you\u2019re sitting right now waiting for the housing market to crash, there\u2019s a deeper a problem here. Okay? You have a fear problem. You don\u2019t have an investing problem. And so what I would suggest is do your research, understand.
If you can learn how to underwrite, if you can learn how to value property, and you understand the consequences of overpaying, you understand the consequences of getting a good deal and how you can leverage that to make and grow your wealth, you will do well. How do you move forward? I think first and foremost, learn. Learn, learn, learn. Listening to a podcast like you\u2019re listening to right now, this is key.
This is key because you\u2019re getting insights from people who are doing this at a high level, from different aspects and perspectives of the housing market. Right? Learn from them, see what they\u2019re doing, understand how they\u2019re underwriting and follow their bets. Follow their bets.
And if you\u2019re not following their bets, at least understand why you\u2019re not, rather than just having this overarching idea that, \u201cWell, it\u2019s gone up now. It\u2019s going to go down.\u201d Because I\u2019m sorry. I\u2019m sorry. But yes, things like that, we\u2019ve seen this cyclical nature of the house market, but as cyclical as it is, it\u2019s still up to the right.<\/p>\n
Dave:
And when you talk about a professional eater, are you talking about like the Blackstone\u2019s, the BlackRock\u2019s-<\/p>\n
Jamil:
Of course. Yes, yes.<\/p>\n
Dave:
\u2026 whatever those companies are called of the world?<\/p>\n
Jamil:
Yeah, I should have called them. I should have given them a name. But yes, that\u2019s exactly what I\u2019m talking about. I think that\u2019s the professional eater at the table right now, and they\u2019re gobbling, gobbling, gobbling, gobbling all the hot dogs.<\/p>\n
Dave:
One of my claim to fame is I actually got to be a judge at the Nathan\u2019s Hot Dog Eating Contest at Coney Island. Yeah. I counted for a guy, Pat Bertoletti. He ate 44 hotdog in 12 minutes.<\/p>\n
Jamil:
So now that you\u2019ve seen that, you understand my analogy, right?<\/p>\n
Dave:
Yes, absolutely.<\/p>\n
Jamil:
And when you-<\/p>\n
Henry:
You\u2019ve got to buy more hotdogs.<\/p>\n
Jamil:
\u2026 You\u2019ve got to buy \u2026 Yes. When you have the professional hotdog eater there, he\u2019s not the person putting just relish on a hotdog and enjoying it bite by bite, right? That\u2019s not what Blackstone is doing. They\u2019re not looking into a primary bedroom and being like, \u201cOh, I can see myself of living here.\u201d That\u2019s not the decision that\u2019s being made, right? It\u2019s a completely different decision.
And when you have people making decisions that are taking up near 19% of the housing volume, and they\u2019re not making decisions the way that your primary home buyer would be making decisions, you\u2019ve got a different animal.<\/p>\n
Dave:
Absolutely. They\u2019re just trying to capture as much market share as possible right now, and that is going to have long-lasting implications, probably worth a whole show. We\u2019d probably do a whole show on that in the upcoming future. I do want to shift gears a little bit here. Kathy, I\u2019m curious, how do you see the general economy and investing situation with the stock market? Everything else that\u2019s going on in the economy, how is that impacting the housing market right now?<\/p>\n
Kathy:
Well, I\u2019m not a stock expert, but the ones I listen to are basically moving into stocks that go with inflation. So food, gas, and of course housing. These are things that inflate, and we know we\u2019re in an inflationary time. Will there be stocks that don\u2019t do well? Sure. But that\u2019s at least the guys that I\u2019m listening to are talking about it that way.
We have so much money circulating, trillions of trillions of dollars. And it wasn\u2019t just the US that printed trillions of dollars. The whole world is addicted to this modern monetary theory that is really just a really bad theory. I sometimes wonder how people think that makes sense. I\u2019ve talked about this before. It\u2019s like we\u2019re all sitting here playing Monopoly, and we\u2019re having a good game. And there\u2019s all these apartments and houses on the table and we\u2019re bidding for them.
And then all of a sudden, the bank comes in and brings another box and passes it around. And now we all have more money, but the same number of assets on the table. What are we going to do? We\u2019re going to bid more. We\u2019re going to spend more, because there\u2019s more money. It doesn\u2019t mean the values necessarily went up, it meant that there\u2019s just more money circulating and the value of the money has gone down.
That\u2019s the situation we\u2019re in right now. And so the economy\u2019s already slowing down. We already see that happening. GDP has been declining and there\u2019s projections that it\u2019s not going to be as robust as expected simply because that\u2019s the fed\u2019s effort, is to slow it down and they\u2019re going to do that. But when it comes to our industry in real estate, kind of coming back to what you said, it\u2019s mathematically impossible.
In my opinion, you can call me on this a year for prices to go down, because we\u2019re not in the same world that we\u2019ve been in before. We\u2019ve never been here. This is unique and unusual with trillions of \u2026 We\u2019re in a modern monetary policy that has not been tested.<\/p>\n
Dave:
Okay. Guys, thank you so much. That was our first due diligence section. That was awesome. Great job to all of you. I hope for everyone listening out there that this was helpful for you in understanding the 2022 housing market and how this group of incredible experts doing all sorts of strategies are handling this market.
Let\u2019s go to our final section of the show, this is called Crowdsource. And this is where we engage with all of you, our listeners. We\u2019re going to be doing all sorts of fun stuff in this last section. We\u2019re going to be taking questions, or we\u2019ll maybe even bringing people onto the show. We\u2019ll be doing polls. We\u2019ll be gathering data from all you. But as Kailyn and I were planning out the Crowdsource section today, we realized we don\u2019t yet have a crowd.
This is our first episode. We can\u2019t really ask anyone for anything because we don\u2019t have any listeners yet. What we\u2019re going to do is give you, one, a challenge and two, a gift for being a listener on our first show. First, we\u2019re going to give you all a challenge and that is to join our community. And the best way that you can do that is to subscribe to our YouTube channel.
We will have a forum just for On The Market. And so go on there, post your own thoughts about the 2022 housing market. Let all of us know how you are going to handle or approach the 2022 market. And please, we do ask, we would love it if you told your friends and help grow the On The Market community. And in exchange for that, we have our first ever data drop.
The data drop is something that we came up with and it is a gift for our listeners. From time to time, I\u2019m going to prepare a unique data set and you can go on BiggerPockets. You can go to www.biggerpockets.com\/datadrop, and you can download the first file that I\u2019ve created for all you, and it is a super valuable data set. Basically what I did was take the biggest hundred markets in the US and I analyzed all of the rent data.
If you want to know what markets have rent growing the fastest, if you already earn a market like Denver, and you\u2019re curious, \u201cShould I buy a one bedroom, or two bedroom or three bedroom? Where are rents growing the fastest? What segments of the housing stock are best to invest in?\u201d this data set is going to be super helpful for you and I hope it is useful for everyone. So hope you enjoy that as a gift for being a listener on the very first On The Market. All right, guys. Anything else you want to say before we wrap up our first ever episode?<\/p>\n
Henry:
Dude, you\u2019re giving that away for free?<\/p>\n
Dave:
Yeah.<\/p>\n
Henry:
That\u2019s incredible, man.<\/p>\n
Dave:
Maybe I shouldn\u2019t tell people this. I should be selling this.<\/p>\n
Henry:
I don\u2019t think people understand how valuable of a tool just that one data drop is. For you to be able to get that analyze-<\/p>\n
Dave:
You can get that.<\/p>\n
Henry:
\u2026 Right. If somebody wanted to do that, they\u2019d be hunting for months.<\/p>\n
Jamil:
Well, they\u2019d have to hire the vice president of data analytics at BiggerPockets.<\/p>\n
Henry:
Right, absolutely.<\/p>\n
Jamil:
And he\u2019s expensive.<\/p>\n
Henry:
Right. And to be able to quickly jump on a tool and be able to know where your money is best spent in your market from a rent perspective, that\u2019s phenomenal. I don\u2019t want to gloss over how incredible of a free giveaway that is. You see free giveaways all the time on the internet, right? \u201cGet my free book,\u201d and it\u2019s just some \u2026 This is huge. That\u2019s huge, man.<\/p>\n
Jamil:
It\u2019s just pictures of Henry.<\/p>\n
Henry:
Yeah. That is [inaudible 00:57:03]<\/p>\n
Jamil:
Who says you can\u2019t buy friends?<\/p>\n
Henry:
No, that\u2019s a phenomenal, phenomenal thing by the way.<\/p>\n
Kathy:
Yeah. We get access to it first, right?<\/p>\n
Dave:
Yeah, absolutely. Yeah. Well, we do have a week before this comes out, so you can scour through that data.<\/p>\n
Jamil:
And then come to our reseller website at-<\/p>\n
Dave:
But really guys, this is what we\u2019re going to be. We\u2019re not going to do this every single week, so you do have to pay attention and watch the show. But we\u2019re going to be leaving these little Easter eggs value for you. In On The Market, this is what we\u2019re all about here at this new show, is giving you the tools and information you need to make wise and confident investing decisions. So to all of you guys, thank you so much for joining me here in Denver. It\u2019s so awesome to do this in-person. It is so much fun, and I\u2019m really looking forward to growing the show with all of you.<\/p>\n
Henry:
All right, thanks for having us, man. It\u2019s amazing.<\/p>\n
Kathy:
Love it.<\/p>\n
Dave:
On The Market is created by Dave Meyer and Kailyn Bennett, produced by Kailyn Bennett, edited by Joel Esparza, copywriting by [inaudible 00:58:00]. Special thanks to Lisa Shroyer, Eric Knutson, Danielle Daly, and Nathan Winston. The content on the show On The Market are opinions only. All listeners should independently verify data points, opinions and investment strategies.<\/p>\n<\/div>\n
\n
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