In the last 24 hours two stories hit the news wire that are noteworthy.
New Home Sales Crash In June To Lowest Since April 2020
https://www.zerohedge.com/personal-finance/new-home-sales-crash-june-lowest-april-2020
“Even more amazing is the fact that new home sales are down almost 20% YoY – the worst since 2011.”
Supply is finally picking back up. But what has caused the reduction in purchasing? Buyer confidence is plummeting. I hear story after story of buyers becoming extremely frustrated by the purchasing process as prices rise and inventory is snapped up by other retail buyers and investors. I have a member in our Mastermind that builds new townhomes and he said last weekend that two were already bought by investors.
Millions Of Renters Face ‘Unprecedented Spike’ In Evictions As Moratorium Expires
https://www.zerohedge.com/economics/millions-renters-face-unprecedented-spike-evictions-moratorium-expires
This shouldn’t be a surprise to anyone. However the interview was interesting.
Q. When the CDC eviction moratorium expires, where do you expect evictions to climb the most?
A. I would expect evictions to rise the most in places where housing costs are high or climbing, demand is strong and tenant protections are low. That probably means the Sunbelt and the southeastern U.S., though there are likely to be widespread increases.
Read here – Texas. You are going to see so many evictions folks heads are going to spin, especially in single family. Why? Lease rates are UP nearly 11% YoY. Get those non-paying tenants out to pay higher rents.
Our new property manager puts a minimum 7%/yr rent escalation in her contracts and that was before this massive increase in demand.
For whatever reason some investors are on the sidelines. I don’t get it. Rents are appreciating faster than a hard money loan and existing houses are increasing 20% in value in less than a year.
About three years ago I found a great deal in Surfside, Texas. Rob and I know how to run an AirBnB, however we had never bought anything in Surfside. We ran the numbers and decided to do it. Today, we own a bunch of units there, and so do our Mastermind members. This year we decided to sell a proportion of our portfolio. The properties have nearly doubled in value – just like we tell the Mastermind – we will sell half to payoff the other half of the portfolio.
A few months ago I received a call from the couple that owns the beach house pictured above. I did not think they would ever sell it, but they had the good fortune of contracting their dream house on the island and gave me a call. That would have never happened unless I took the first step 3 years ago.
The most important step in your investing career is THE NEXT STEP.
The property above is a bit of an icon on the island. I should net about $5k/month, a 60% CoC return, from AirBnB/VRBO. I never would have had a shot at this property if I didn’t start buying in Surfside.
Investors spend an inordinate amount of time trying to figure out each step. Trust me – it is easier to just do.
Action Items
- Figure out what you want
- Are you a passive or active investor
- Do the work
If you need help figuring it all out – schedule a call with me and Rob. Text Mastermind to 281-401-9008