Real Estate Investing in 2024 (6 "Rules" You Can't Ignore)
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- Опубліковано 22 чер 2024
- Episode #963
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Real estate investing in 2024 isn’t as easy as a few years ago. When interest rates are low, housing inventory is high, the economy is booming, and everyone’s happy, real estate investors can take considerably more risks with bigger payoffs. But now, only the most savvy investors are finding cash flow, appreciation potential, and wealth-building properties. So, with little hope in sight for lower rates or home prices, how do you ensure you’re building wealth, not getting burnt, in the challenging 2024 housing market?
If there’s one person who knows how to invest during tough times, it’s J Scott. He literally wrote the book on recession-proof real estate investing and has flipped, landlorded, and syndicated through booms, busts, and the in-between periods. Today, J is laying down his six rules for real estate investing in 2024, which he’s following himself to ensure his portfolio doesn’t just survive but thrive, no matter what the housing market throws his way.
First, we dive into the factors causing such a harsh housing market and whether J thinks home prices will rise, flatten, or crash. Next, J walks through the six rules for real estate investing in 2024. We’ll talk about appreciation potential, rising expenses like insurance and property taxes, the riskiest investing strategies of today, loans that’ll put your real estate deals at risk, and why you MUST start paying attention to your local housing laws.
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Show notes at: link.chtbl.com/BPRE
00:00 Intro
01:30 What Affects the Housing Market?
11:20 1. Don’t Bet on Appreciation
15:46 2. Expect Higher Expenses, Lower Rent
20:37 3. Know the Risks of Flips
26:46 4. Avoid Adjustable-Rate Loans
28:48 5. Buy What You Can Hold
33:15 6. Pay Attention to Local Laws
J should be added as the fourth On The Market guest ❤❤❤❤❤
J scott loved your book on negotiation! It has helped me so much. love it dude! much respect! would love to meet you someday!
Incredibly valuable points in this episode, thank you.
Thanks for the reality check! I loved the emphasis on being strategic in real estate investing, especially the caution against adjustable rate debt. It's better to play it safe than sorry!
I love me some J Scott. He is my unofficial mentor. His advice has made me wealthy.
J's comments are spot-on for our Las Vegas neighborhood. We purchased our property for $394,000 two years ago and highest recent sale of a very similar comp was $390,000. We've been advised to sit tight for another couple years.
Thanks for the update J. Good stuff.
Thanks J. Your willingness to share your thoughts is appreciated
Awesome / amazing / superb content
But if you have leverage then the amount financed is taking the hit of inflation...that amount is real appreciation
Yes, leverage is literally the single best hedge against inflation. But also keep in mind that at today's interest rates, that leverage is going to be negative leverage (mortgage rates are higher than cap rates), So while leverage is giving you inflation arbitrage, it's costing you in returns.
Don't get me wrong, leverage is powerful, but It's not all upside and no downside.
Thank you for the information, Y'all. Very helpful.
J and Dave so on point, incredibly strategic advice. COC and IRR are my financial ratios I focus on, both must be winners. I’m trying to retire in the next 5 yrs and all these rules are what I seem to incidentally running into. The one area I see the best opportunities is with financially distressed owners. 1.7M arms are adjusting this year. There is opportunity it’s just more difficult. It would be great to hear topics focused more on different types of distressed properties to identify and approach for acquistion.
I could see an argument today not to factor in appreciation to decision making. But to not do that in the past is insane. None of the costs or revenues of buying and holding are significant compared to appreciation. On what planet have property values not increase at substantially fast rates than nominal inflation?
damn, just as I wanted to quit my job!! but flips are dead now. I have 3 flips that maybe I can make 20k on all of them.
Be thankful for being employed. Makes you super bankable and easy to get mortgage loans.
His book "negotiating real estate" has made me a LOT of money
History. The crash was 2008.
Rock bottom for valuations was end of 2012 start of 2013. At the SAME time we also had record low interest rates. NEVER has both happened at the same time. While valuations grew very slowly from 2013-19 that’s when all you guys surfaced. Chandler Smith. Bigger Pockets. Josh Turner. David Greene. Even Grant Cardone.
Never before could you get a 850k loan for a 16 unit, with at 4.5% 25yr with 20% down that has a cash on cash of 18% or even higher. This was exactly what I did too in 2016. Then go back to the bank just 3 years later and the bank says hey this is worth 1.5m now would you like to cash out refi. So here’s 400K. Your new rate is 3.2%. Awesome. Take the 400K and go buy another property for 2m.
Ahhh but we now have a slight issue. What happens in 5 or 7 or 10 years?
Well. That rate goes from 3.5% to 7.2%
So that refi, well. Barely cash flows. I self manage. So I make it.
If rates stay 7% or above. A lot of squirrels fall out of the trees
Rates will increase
We find ourselves at the tail end of the economic cycle. Consequently, purchasing real estate at this juncture is not prudent, as the market is likely to experience a downturn before the commencement of a new cycle.
We love to hear new tips and tricks on investing!! 🏙