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Hey ,
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Days on market increasing...the sky is falling somewhere!
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In some markets right now, Single Family Homes (SFH) are doing well in sellers’ markets, yet elsewhere, experiencing buyers’ markets…
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What’s good? What’s bad? Where is this happening with Multi-Family (MF) and other assets?
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Inside the Trenches
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My friend Dave Meyers just posted a US map showing the CDOM (Continuous Days on Market) increases and decreases throughout the entire US between June 2021 and June 2024. (Source: Resiclub Lance Lambert)
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When looking at this map, it’s so easy to say, "Oh crap! Run away from the orange and red, and run towards to blue!" Especially if you are a house flipper...
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It’s interesting to see how many markets though are still holding up, and it is safe to say that the darker the blue, the more likely you're looking at a sellers market.
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If you are a value-add investor and are in one of those markets, I am sure you are either reaping the rewards when listing a property to sell...or you are finding it harder to find "good deals."
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So, should we be running away from the orange/red markets and towards the sellers’ markets?
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Once again...it depends! The longer I’m in this business, the more I realize how short sighted I have been when playing this investment game.
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Since 2020, so many of us have been caught up in appreciation, short CDOM's, multiple offers, cheap rates, and so many other fun things!
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As I have said before, this is not normal.
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When it happens, we must take advantage of it. However, playing long term always favors the real estate investor more than playing the short term.
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Look at Multi-Family properties right now — across the nation in EVERY MARKET, MF property owners have lost values in their properties DRAMATICALLY! Some market values have been cut in half since 2021, and most have seen a large dip in their values.
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Was it a great time to sell MF value-add properties between 2020 and beginning of 2022? Heck yes!
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In hindsight, was it a great time to buy? Maybe not...
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But wait!
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If we had a map like this back in 2021 for MF, would we be running towards the dark blue as investors, knowing what we know now?
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Is this the same as SFH investing? Not necessarily — values with SFH are far more directly impacted by Supply and Demand than it is by interest rates alone.
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Yet there is a lesson here for sure…
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Sellers markets are great to sell in, hard to buy in.
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Buyers markets are great to buy in, hard to sell in.
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If everyone is doing it, and making money looks easy...it probably isn't the right strategy long term...
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Paying attention to trends, market data, paths of progress, are all important to watch, no matter what market you are in.
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Short-term expensive capital has a purpose, but must be coupled with a solid investment plan and operations for the long run...and worst case scenario...
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Keep your cash for rainy days, because they always come.
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Solid operations and long term strategic planning wins in the long term.
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Ideally...
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Buy in a buyers market, preferably one with a foundation of solid economics if possible, and hold that asset until it one days becomes a sellers market...then 1031 that asset into something better!
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So how do you stay on top of things like this?
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Who do you bounce ideas, concerns, plans off of?
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What peers do you have in your life that you can call and discuss investments with and how to take advantage of the current market?
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Where do you go and who do you reach out to?
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All of this is absolutely one of the top reasons that Ken McElroy and I created the Limitless Expo.
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WE wanted to surround ourselves with people that are actually In The Trenches and getting after it in todays market.
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WE wanted to find where to get the best information, data, and experts.
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WE wanted to learn.
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Just like you.
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This year’s Limitless Expo is full of experts, active investors, seasoned pro's getting after it. No selling from the stage — just pure content and networking.
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It’s the event that Ken and I would pay to go to so that’s how we created it to be.
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Announcements
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This week ticket prices go up and we are less than 30 days away from it kicking off in Dallas this year.
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Yes! It’s labor day weekend — that's why we are hosting it at the Gaylord Texan. Bring your families and have them enjoy the resort while you're networking with peers.
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Use code TARL10 at checkout or click here and get 10% off before prices increase in a couple days.
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See you there!
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Tarl
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