Be Careful Out There

[Alex Stewart]

I have been investing in real estate since before it was cool like it is now. I did BRRR before that was even an acronym, and it's done very well for me and my family. Back in 2009 if you said you were investing in real estate, people would look at you like you were crazy. It is simply not like that anymore. Buy and Hold real estate is the cool asset strategy that everyone wants in on now.

I get asked by my friends regularly, or people early in their careers about what they should be doing right now with their money, and what real estate assets to buy.

Frankly, I tell them.....nothing.

When I was buying houses in 2009 it was clear you couldn’t lose, literally every bad thing you could imagine was priced in. Compare that to current times where I couldn’t realistically imagine less inventory, lower interest rates, or any other factor to be in the favor of strong real estate prices. Honestly, I don’t know what in this equation will change anytime soon, but I don’t feel that riches are to be made in this real estate climate compared to other times.

I literally tell folks now, “I’m glad you have some money to invest but it isn’t 2010 anymore and you need to find a way to get rich some other way.”

So where do I steer them? For now, the S&P500 index fund SPY.

If you don’t have the patience to park your capital in that, and it’s not sexy enough, you aren’t cut out for this game anyway.

I know this sounds terribly pessimistic and I certainly don’t think the sky is falling, but I can’t see how this story of asset prices in real estate goes dramatically higher from here.

Thoughts?