"For every action, there is an equal and opposite reaction."

Real Estate is a cyclical industry, which, according to investopedia.com, is a type of industry sensitive to the business cycle, such that revenues generally are higher in periods of economic prosperity and expansion and are lower in periods of economic downturn and contraction.

After the insanely hot & volatile seller's market, we saw from 2018-2021, the market has turned in 2022. Interest rates have soared, Bridge-Lending has dried up, and agency debt (Fannie & Freddie) have tightened their lending standards. What does this mean for Real Estate Investors?

Although the buying power has certainly decreased, we are looking at the current state of the market as a positive, why?

#1 - Although interest rates have risen, they are still at healthy levels, anything under 10%.

#2 - Less Competition in the market, as Warren Buffet said "A rising tide floats all boats….. only when the tide goes out do you discover who's been swimming naked."

#3 - Lower sales price, “You make money when you buy”. Although we are still seeing that sellers’ expectations of price are still catching up with the current state of the market. The fact is that with stricter lending standards and higher interest rates, the price of property has come down significantly. This is a positive for the acquisition side of things, as we are expecting some great opportunities (deals) to come up over Q4 2022 through Q2 2023.