Today's American Conundrum...

[Ben Darby]

Hello BP community. I am a newbie investor. I am posting things I see that are going on in America that have an impact on real estate investing. Opinions and feed back are greatly appreciated. 

1. The Federal Reserve commenting on the possibility of severe declines in Asset values. Fed also keeps printing money 

2. High unemployment, National Eviction moratoriums' cancelled, Mass Migration

3. Rising Inflation. Homes Over Valued. Panic Buying.  

So, I was and still am thinking of buying an investment property in San Antonio TX in the price range of $150k. I would be able to secure a low interest rate and based on the numbers, make a 13-14% ROI and maintain decent cashflow. I am wanting to invest where people are moving.

Do I buy a property now even though it has a low interest rate and there is a possibility for the value of the home to drop? Or, do I wait on the side lines for up to a year or so and buy if/when property values drop and maybe by then interest rates are higher? I wanted to invest now because as I understand, real estate is a good hedge against inflation. But what is the point if Asset values do drop and Big companies seem to be waiting to come and snatch up properties left and right? Seems like Pain from the Pandemic is coming. 

Let me know your thoughts! Thanks from a fellow Newbie

[Polo Vazquez]

I agree with Jose for the most part. Also, unemployment numbers are skewed. I say NOW HIRING signs everyone and talk to the business owners and they all say they just can't find anyone because nobody is applying, (probably because of the unemploymet boost) so don't let that scare you. 

If you think inflation is coming then might as well get a house now. If you get a mortgage on it for and inflation comes then all that means is that the money you own now is much much less!

If you sit on the sidelines waiting you might stay there for a long time. Whenever I started investing eveyrone kept telling me how houses where so expensive now compared to 2008 etc etc. If I had waited for a downturn I would be at year 5 of being on the sidelines. Instead I have a few properties under my belt that generate me income every year. So buy now and if the market falls then buy another one or better yet buy two more.