Reacting to the real estate market bubble

  • 10:00 am

The news has expert commentators proclaiming to know the real estate market better than the actual experts engaged in the industry daily.

Unfortunately, they don’t know you and me.

Experts have information, study market trends, and speak with leading business leaders, but one truth remains; they don’t know the industry secrets of success.

People drive economies. 

No one knows how the population will genuinely react to rising interest rates. No expert can tell you the decision you will make relative to your grocery bill and your fuel bill. They don’t know.

They know what people did historically, and the experts of that era only knew after people made their decisions.  

Glenn Schworm, the co-founder of Home Flipping Workshop, highlights changing market conditions well in his video, Reacting To The Real Estate Market Bubble. 

Glenn shares many helpful insights regarding the potential real estate bubble.

Remember, how people evaluate their wants and needs are the key components that drive economics. 

So, instead of listening to experts on television, become the expert in your area with  boots on the ground and gain the experience you need to thrive.

To Thine Own Self Be True

Before evaluating the market in your area, complete the following self-evaluation.

Ask yourself:

  • What’s my actual risk tolerance?
  • What real estate strategies am I most comfortable transacting?
  • Can I afford to hold a property, or must I sell it?
  • Do I like renovating properties, or was it a profitable headache in a hot market cycle?
  • What are my long-term goals for real estate investing?
  • Who am I as an investor, entrepreneur, and visionary?

    • Before you can engage in a shifting market, you must know yourself. You won’t obtain this information by listening to experts on television.

    You must dig deep and ask yourself the questions posed above.  

    Savvy investors know how to make money regardless of the market conditions. They find out where and how to do it and execute it flawlessly.  

    Serious real estate investors do not allow the news cycle to consume them. They are too busy transacting real estate business.

    So, just who are you? And why are you doing this?

    Know Your Market

    Now that you’ve taken the time to accept who you are as an investor, it’s time to ascertain the shifts in your local market.

    Consider the following as a roadmap to strategizing a successful business plan:

  • What is the per capita income in my geographic area?
  • What industries are driving the economy in my area?
    • Are these businesses growing? Are they slowing? Are they closing?
    • Are new industries moving to the area? What is the nature of those businesses?
    • What types of employment opportunities do they offer?
  • With interest rates rising, what market segments are showing signs of slowing?
    • Houses that range between $250-$500k typically slow early.
    • Houses above $500k tend to slow drastically.
    • Houses for first-time home buyers, going between $100-$249k, tend to continue moving?
  • What about the rental market? Is it growing? If so, why is it growing?
    • Cost of money too much?
    • Foreclosures on the rise?
    • Interest-only loans giving high-end homeowners headaches?
  • What are people interested in renting if that market is growing? How much are they willing to pay, and where are they willing to pay it? Location is everything.

    • By understanding your risk tolerance you can move into your local market looking for the right opportunity for you and potential buyers or renters. 

    There is a sweet spot in all economies. Find it. Capitalize upon it and flourish.  

    Do not abandon the basic principle of real estate investing – buy it right. Always remember, you must find the off-market deals and contract them beneath market value.

    You must also know what type of real estate strategies will maximize your profit in a shifting market.

  • Is it best for you to do wholesale deals?
  • Should you continue rehabbing properties? Do you have the expertise and workforce to get the job done?
  • Should you build a portfolio of houses, four-plexes, eight-plexes, or larger?
  • Are land deals optimal as a part of your portfolio?
  • Is the industry moving to the area in the next 3-5 years, making this a long-term investment?

    • Don’t listen to the so-called media experts. 

    You make money when you purchase the house right and understand the nature of the market changes in your area. So, stop listening to these inexperienced news network personalities and become an expert yourself.

    Knowing who you are as an investor and why you are investing, combined with the proper strategies, will make you a savvy investor.  

    You’ve found your lane; now stay in it.  

    What’s Next for You in a Shifting Market?

    Becoming a savvy investor is not an overnight process; this is not a dream. If approached as such, it will become a nightmare.

    You are an investor for the long haul. You are building a business that will provide profits and freedom for you and your family and benefit your community. With the right strategy you will be able to build the kind of legacy that Glenn and Amber Schworm have built. 

    Take time to prepare and do what’s required to thrive regardless of market shifts.

    Connect with Glenn and Amber at the upcoming Home Flipping Workshop. Do not hesitate. 

    The market continues to shift, and you need to know how to minimize losses and maximize profits in an ever-changing market.