Even though real estate is seen as one of the most stable and profitable markets today, it is not immune to significant cyclical changes. It has been evident, especially during this pandemic, which drastically affected inventory and property prices across the globe. However, the market may be shifting soon, and it’s a requisite to keep an eye out for the major trends that are yet to come this 2022.
In this short episode, Chris Craddock will unpack these shifting market forces and will unveil the condition of the real estate market, and as well as give us tips on what we should be doing to overlook the risk factors that come with it.
What To Do in 2022 – Where Is The Real Estate Market Going In The Next 12 Months
Is it good for investors? Absolutely. It’s still good for investors. We also know that for investors, we win when we buy. You’ve got to understand that you win when you buy.
Welcome to this episode of the podcast. Before we jump into it, I want to share with you some exciting news about a new Wholesaling Inc. partner. Let’s face it, there are only so many hours in the day. The most valuable asset you have is time. Ask yourself, wouldn’t it be great to offload all the menial tasks on your plate, free up more of your precious time and grow your wholesaling business faster than ever before?
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People are putting their cash into assets like real estate, which is making it a strong buy for the future.
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This is Chris Craddock with REI Revive. I’m excited to be back here with you. I want to chat briefly with you about the state of the real estate market and what that means we should be doing. You look at HGTV and real estate investing is sexy right now. It is where people want to be. It’s where people want to put their money.
With that said, I know a lot of people are saying, “Maybe you should sit on the sidelines and wait. The bubble is about to burst.” Is the bubble about to burst? What does that mean? First, when the market is soft, it is the best time for real estate investors. Why is that? When the market is as hot as it is, people can have a piece of junk house, they put it on the MLS and it’s going to sell. I’ve been joking that over the last couple of years, you could put a piece of dog crap on the MLS and, within 24 hours, you’re going to get multiple offers. That is where we are in our market.
One of my good friends is one of the top real estate investors in the world. He was talking about the fact that 2010 was when he made some of the most money he’s ever made because he didn’t have to do any marketing whatsoever. You could find amazing deals on the MLS. Now, you cannot find great deals on the MLS. Everything on the MLS that’s even somewhat of a deal is going to get multiple offers and it’s going to get bid up. It’s going to probably sell for more than it should sell for.
For investors, the best time to be an investor is when the market is soft because if there are any imperfections in a house, they’re going to have to sell at a massive discount. There are many options that distressed sellers don’t have to sell at a massive discount. Is it good for investors? Absolutely. It’s still good for investors. We also know that for investors, we win when we buy. You’ve got to understand that you win when you buy.
The problem is we’re dealing with many new investors that have not looked at their numbers and they’re buying, expecting appreciation to happen and looking to win when they sell. That’s speculation. It’s not that bad if you’re wholesaling because you can let go of the contract. Although it’s important to be people of our word. If we put houses under contract, we should be intending to close on them.
I also know a lot of people out here are fix-and-flippers. A lot of times, in a good market, in an appreciating market like this, you can buy a property. By the time you finish fixing it up, it’s worth another $5,000, $10,000, $20,000 more than what you bought it for even before you did any value add. With that said, a good market is forgiving.
If you’re new to real estate investing even though you can’t get as much of a deal on the MLS, it’s a little bit harder and you’re fighting with a lot of people because. When the real estate market is strong, everybody that has any dollars to run together, they have more dollars than they cents, oftentimes is going to overpay for houses. You’ve got to be better at finding deals. It is more forgiving because the market is continually going up so we can get the property sold because the market is more forgiving.
Let’s look at what’s coming here. I know a lot of people have been sitting on the sidelines saying, “I’m going to do my research but I’m going to get into the real estate market when the market crashes.” With all the foreclosures coming and everything else, we’re going to be in a good place. Here’s the deal, it’s because of all the inflation that has happened. Inflation is when the government prints more money than it should be and it creates too much money in society. It essentially devalues our dollar. Our dollar becomes worth less.
Here’s a perfect way to look at it. If you go to the dollar store, it’s a $1.25 store. If you look back years ago, these five-and-dime stores, the things you could buy for $0.10 became the dollar store. Now, It’s a $1.25 store. You’re seeing the value of the dollar go down. Go to the grocery store and you realize you’re paying more for everything out there. What happens with inflation is because real estate is a hard asset, people are putting their cash into assets like real estate, which is making real estate a strong buy for the future.
If you’re planning to sit on the sideline until the market crashes, you’ve got a long wait.
I’m sorry if I’m getting too technical here but it’s important for us to notice, as investors, what we’re looking at. If you’re planning to sit on the sideline until the market crashes, you’ve got a long wait. That’s why it’s important to get in now and start doing what you need to do now. Second, let’s look at the rate of foreclosures over the last couple of years. There was something called forbearance that happened and that was where the government allowed anybody that was behind on their mortgage payments to have some time to get out or work out a deal. They were not allowing people to be foreclosed on for a little while.
Now that the foreclosure moratorium is lifted and people are out of forbearance, let’s look at what has happened over the last couple of years to foreclosures. In 2017, there were 314,222 foreclosures. In 2018, there were 279,000. It’s going down. In 2019, there were 277,000. It’s continuing to go down. In 2020, there were only 129,000. It’s less than half. In 2021, there were 29,160 foreclosures.
We’re seeing that the level of foreclosures has been going down. Why is that? It’s because there is more equity. People can sell their houses without going into foreclosure if they are in trouble. Also, the economy is strong. People are selling properties right now. They don’t have to sell to get at a massive discount to the bank at a foreclosure. They don’t have to do all of that to get out of their properties because they have equity.
When there are fewer foreclosures in the market, it means that the real estate market is strong. If the market is solid and we’re looking at a solid market for the foreseeable future, which we are, what we need to ask ourselves is, “What does that mean for me? What are my next steps?” To me, that is where we have to jump and say, “What is the data telling us?” The data is telling us that the market is strong. Today is the day to get into real estate investing and ramp up. The fact that the market being strong gives us training wheels. If we’re upping our marketing, upping all the stuff that we’re doing, buying more properties, we know that the market is going to continue to appreciate.
Don’t bank on that for what you sell. You still need to win when you buy. Buy at the right price. Buy at a discounted price. Know that the market appreciation is also going to protect you a little bit. If you’re doing any fix and flip as you’re wholesaling, you’re going to get people that are willing to buy at inflated prices because they are betting on the market going up. That’s fine. Let them speculate. We don’t speculate. It does give us protection. Right now is the time to go in big and go in strong.
With that, we got to understand that with a solid and strong market, when you can put anything on the MLS and it’s going to sell and it’s going to sell probably overmarket, this is the time to be involved in stuff like the REI Revive program because you can monetize those leads that go on the market. Because of the fact that people can put their house on the market and get close to retail value even though their house is a disaster, this is the time when you want to monetize those deals.
I guarantee you, if you’re doing any marketing whatsoever, you’re probably seeing more people asking for retail value than you ever have in the past. You’re going to continue to see that as long as the market is strong. This is our time to build a strong base while we’re in a solid market, while we’re able to monetize all of these leads, while we’re able to make money in a solid, strong market. We’re not scrimping by because the market is soft. This is the time to bring in a lot of cash and make hay while the sun shines so that we can build out our business.
Tony Robbins keeps saying that winter is coming at some point. When the market gets soft, when the market goes down, you will then have a bunch of cash available to monetize, to take advantage of the soft market when all of the other investors leave. Real estate will stop being the sexy investment when the market slows down.
You will be there with your war chest and your powder will be ready to go and that is when you will go from making good money. It’s what you’re going to be doing over the next couple of years because you’re going to be following all the guidelines that everybody here at Wholesaling Inc. is teaching you on how to make good money.
You’re then going to be making legacy money. We’re talking about generational wealth. That’s going to happen. When the market crashes, you’ve made a fortune, you’ve got your cash right there ready to buy and scoop up things at a massive massive discount. That is when the massive transfer of wealth is going to happen. That’s when it’s going to happen for you.
With that said, I hope this gives you a little bit of a basic understanding of what’s going on in the market. The foreclosure rates are down. We have a couple of strong years of real estate coming. This is the time to monetize all of those dead leads, all of those leads that are going to go and sell retail. This is the time to make a lot of cash on those.
If I can help you do that, if I can help you scale, please go to ChrisCraddock.com, click the Apply button. With that, we’re going to jump in, we’re going to look at your business and see what we can do to monetize those dead leads, monetize all of those retail leads and help you build out your business. When winter does come, you’re going to have so much cash. You’re going to be there able to capitalize on the big win.
In the meantime, we’re going to be making so much money. It’s going to be ridiculous. Let me know how I can help you. If you want, go to my Instagram, @CraddRock. Send me a DM. If there’s anything I can do to serve you, help you, help you grow your business, send me a message there and I will reply to any of those. Until then, go out, kill it, live uncommonly.
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About Chris Craddock
A nationally certified Life Coach in Leadership and top 20 in all of Keller Williams Realty International, Chris Craddock is the host of the Uncommon Real Estate Podcast, a Realtor, and entrepreneur who runs multiple successful businesses in the Washington DC Metro area (and Richmond, VA). Chris and his companies consistently bring in over 5 Million in revenue year after year. His team, The Redux Group, sold just over $160 million in volume in 2020. Chris has been married for 20 years and is the proud father to six beautiful children.