Why Real Estate?
Real estate has proven to be one of the all-time best vehicles for building wealth, thanks to tax benefits, leverage, and rental income that offsets expenses. It is also a slow moving vehicle, and can be very predictable.
At Real Wealth Network we help our members with the best opportunities regardless if it’s a single-family home, multi-family or commercial investment.
Where Are the Best Deals?
The best deals usually come in some form of distress. If we can solve the problem, we can make a profit.
It was easy to find distressed properties during the Great Recession, when approximately 4.6 million homes were in some state of foreclosure. Today the housing market is in recovery, and distressed properties account for only 14% of for-sale inventory (down from 28% last year.)
Trust deed states like California and Arizona worked through their foreclosures rapidly so prices have bounced back to nearly bubble pricing. Finding a good deal in those states is like searching for gold in the Sierra – it probably exists, but you have to work extra hard to find it.
What About Bigger Deals Like Multi-Family & Commercial?
Another opportunity we’re finding for our members are half-completed developments in foreclosure. When Lehman Brothers collapsed in 2008, builders suddenly found themselves without the credit lines they were promised. Many good builders went broke and solid projects went into foreclosure.
At Real Wealth Network, we are picking up these distressed apartments, commercial projects and residential developments for as little as 10 cents on the dollar. We then partner with highly experienced builders who have the ability and expertise needed to finish them out, but just don’t have access to financing. This ends up being a huge win/win for everyone.
What’s Next for the Housing Market?
The biggest problem we will be facing is low inventory levels in the years to come.
Remember, the U.S. population is growing by 4.5 million every year,. It’s estimated that we need 1.5 million new homes every year to keep up with growth, and yet only about 500,000 new homes were built each year during the Great Recession.
It takes years for builders to get land entitled and permitted, so expect to see low inventory levels for years to come. Low supply + high demand = price increases.
Therefore, rising interest rates won’t have much of an affect on the recovery housing market. Unfortunately some buyers will be priced out, but there will likely be someone standing right behind them who can qualify (if the property is well-located near jobs).
Ideas without action are useless. It drives us crazy when someone tells us they have invested thousands of dollars in real estate courses or bootcamps yet have not purchased a single investment property or made any money from real estate. It’s been said that the best time to buy real estate is 20 years ago. But the second best time to buy real estate is today! Our goal is to help you make the right investments today so you can benefit from the cash flow and growth that happen over time.