Is August 1 the next D Day? (Disaster, Disappointment, Depression

[Meghan McCallum]

Ladies and gentlemen...I POUR myself into being a student of this game. I talk to ANYONE who will l talk to me who FAR outweighs my experience and intelligence. I have felt as though this is our LAST summer of love for real estate investing...unless you plan to sell that appreciated property in the next few months. I stated my career in real estate WATCHING prices skyrocket from the sidelines in 2008-2012. I was FRUSTRATED and mad because I couldn't afford anything that made sense. I knew the north side of Chicago and the suburbs on a block by block intimacy! That is NOT a joke. 

That's why it took me YEARS to buy a duplex to move into. In 2012, I bought in a prime location, a duplex 6 houses from Northwestern University's football stadium. Walking distance to two different train systems into Chicago and a mile from Lake Michigan I had a 6/4 duplex w a three car garage and a parking pad. I paid $280K. It currently rents for $5200/m and it is under market rent.

Last year I had it appraised for $700k. Four days ago I had a broker (with a master's degree in Real Estate, a Partner in a commercial loan brokerage, and real estate license in multiple states) pull comps for me and he said it should SELL at $875K.

What!? HOW could it have gone up based on the comps of SOLD properties $175k in less than 6 mos.?????

Guys, I had been saying that there is going to be a MASSIVE reset on property. I have never sold a property before and I am looking to liquidate majority of my inventory. And, that is my income.

I even started throwing around August because...it would allow for a buyers surge because of great stock market returns (FAKE), appreciating properties (FAKE), general faith in the economy under our new business bullish president (FAKE), and the number of buyers with returned credit scores after their last loss married to a historic interest rate starting to climb!  IT IS A GREAT STORM COMING. I've been scared to say it, to too many people, I don't want to be looked at as chicken little...BUT I've had enough intelligent people echo what I have been feeling.

I spoke with my commercial loan banker and told her my feelings (its a weird relationship, I tell her every time I think I have made a costly error, been screwed by a contractor, or think I should back out of a deal). Most people want to preserve a feeling of being the supreme investor who is all put together, feels confident in how they run their whole business, and to me...puts on a good show. I don't know how to be ANYTHING but brutally honest and I don't hide things from people, as a former firefighter/paramedic you quickly learn how to have VERY hard conversations. Telling a child their father has died or a daughter that her father has passed and we won't be taking him to the hospital because I had pronounced him dead at the scene QUICKLY makes you learn that ripping off a bandaid and quickly exposing yourself as vulnerable WORKS. This lead me into a conversation about her recent investing moves. I told her that I fully expect interest rates to DROP. She looked at me crazy. I told her to watch for trends of the smart money buying into bonds....I went on with the rest of my theories and she maintained an unusual blank stare at me until she had a moment to speak up (I talk quickly). "I just took all my money out of the stock market and put it all in bonds," she stammered. I asked her why and she told me the financial adviser that also advises the moves of my local bank encouraged her to do so. 

I bought a few more points of legitimacy in that moment. I told her what I had been thinking based on listening to and observing the data that some of the countries MOST brilliant economic minds are quietly saying in closed door meetings. The reset is coming. It has to. No one knows what will cause it, but as Kathy Fettke (if you don't know who she is go and start listening to her podcast and look up her website STUFFED with brilliant people https://www.realwealthnetwork.com/learn/real-wealt...

has said, "Bubbles don't slowly leak...they burst." 

Today I listened to yesterday's podcast, she and Salvatore Buscemi said even commercial residential will have a bubble due to the number of products that people have purchased and their ARM's are coming due. Banks are going to call those loans due and MANY are under water. This shook me to my core and has me quickly taking action. Sell in my hot localities and stay steady in my strong cash flowing market that I have a majority of my investments in. Feel free to ask me questions, but understand I just study everyone else's answers who have followed the data. There is no room for emotion today. Flip whatever you have no quickly and get it out of your hands. Sit on your cash and be ready to pounce later this year. Good luck out there.