TDS Investment Group Blog Mail

[Thomas Speziale]

President Harry S Truman once said “Men make history and not the other way around. In periods where there is no leadership, society stands still. Progress occurs when courageous, skillful leaders seize the opportunity to change things for the better.”

What an incredible quote right?! There are things said that will be remembered forever. Quite literally written into the books for every generation to re-read and absorb. Things that every single person throughout a country, team, town, or even world, will remember. When these things are repeated, everyone in the room knows who said it. President Truman did that back in the 1940’s! Pretty incredible for a man that wasn’t even supposed to be president! This man was thrown into World War II leadership for our country in the blink of an eye, and we just have to worry about buying and selling some properties. I’m not sure which one sounds harder… just kidding! With that being said, how on earth does this famous quote have anything to do with real estate and/or our real estate business’? I’m happy you asked…

Real Estate is ALWAYS changing. That is what makes it so interesting and exciting! Markets are continually fluctuating, inventory volume is constantly going up and down, mortgage rates rise and fall, technologies are introduced, removed, and the list goes on and on. Like anything, there is always the next best thing on how to create “an edge” in the business. Our industry is the best because things are always changing. Listen, if we all wanted “the same” every single day, we could go work at our local toll booth and get the same check every single Thursday or Friday. There is nothing wrong with that, but we do what we do because we live for the rush of these ups and downs! They get our juices flowing and pump us up!

With that being said, something commonly spoken about amongst our company, our vendors, and our customers is the topic of…when the market is going to dip, or fluctuate from this overall hot sellers market, to an aggressive buyers market. Did the ears of our buy/hold investors just perk up? Mine too! Here’s the thing…whatever the market, whatever the scenario, we have the ability to compete in it! Not only that, but we can continue to grow our business’ and fluctuate as the market does and absolutely explode with growth!

I recently read an article from Forbes, written by Aly Yale. Within this article, Aly made some factual statements and prediction for 2019. Let’s look at some things that were stated. First, mortgage rates will continue to rise in 2019, and rent rates will increase nationally. Let’s stop and think here…BIG NEWS! Rent rates are going UP! This is incredible for our investment community! Yea, mortgage rates are high, but these millennials are still putting pen to paper at the closing table. Doesn’t scare me one bit, and it should scare you either!

As you dive deeper she states that the largest “cohort” of millennials turns 29 this year and 30 in 2020. The largest segments of buyers will be Millennials at 47%, Gen Xer’s at 37%, and Boomers at 17%. She also states that this group of millions and millions of millennials won’t care about rising interest rates, but instead, only about getting into their first time homes or second time dream homes. Confirmation to my last statement in the paragraph above. Boom.

She continues to state that “buying power is down 10%” because of the increase in interest rates which will cause people to dive into the lower priced homes. That is incredible news for investors also! Listen, we all know what the average investor is looking for. They want a home for under $100,000, with 25%+ in equity after all repairs are complete. The fact that the market is pushing people toward lower priced homes is huge for our fix and flip community!

Listen, you go to the REIA meetings throughout the globe and you hear everyone talking about how property taxes were raised, or how the market seems to be dwindling, or how these mortgage rates are wild. My favorite is, "I think the market is going to crash in the next 6-12 months." Listen, I'm not saying these comments are things that shouldn't be spoken about, because they really are! What I am saying is that as real estate investors, we need to speak about solutions, not problems. We could talk about how mortgage rates went up a quarter point in the first month of 2019 for about 3 hours, or we can talk about how to adjust and shift our business' to thrive in this economic environment.

We can’t change the environment we do business in, but we can change the way we survive and thrive in that environment.

Like President Harry Truman said, “…seize the opportunity to change things for the better.” Boom!