All Forum Posts by: Jesse Morrell

Deflation would be a huge problem for anyone with debt. 

Friends of mine own a lumber supply business. They gave a quote for a new house months ago on lumber but now that the couple has their finances ready, prices changed so much that they realized they will have to build a much smaller house than they originally planned for. This means old houses with old lumber and lots of sq ft are automatically more valuable. 

@Eric Kulling ultimately I judge a neighborhood by the numbers but I look for pride of ownership, like well maintained lawn and landscape.

@Jody Sperling I self publish all my books because I have a small niche market to sell them to, which makes me money but wouldn’t attract a professional publisher which is really an investor.

Publishers are investors who want to publish books from people already famous with large followings. A publisher doesn’t want the job of making you famous. They just want to pay to print the books of people already famous.

But I’m told from professionally published authors that finding a publisher is a numbers game. You have to submit your manuscript to 100-1,000 publishers just to find one. But each submission costs you time and money.

Inflation caused by the Federal Reserve is the reason houses used to cost $5,000, $10,000, and $20,000 and now those same homes cost $150,000, $250,000, etc.

Inflation isn’t going anywhere because the Federal Reserve and the banking system aren’t going anywhere. So the value of real estate, as it relates to dollars, will continue to rise each decade. There will be ups and downs along the way, due to supply and demand, but the general trend will be up.

When there is a flood of vacancies from evictions, rent will go down. When there is a flood of foreclosures, home values will go down. Usually both don’t happen at the same time, so you can rent when the market is bad and flip when the market is good, but government interference with the free market place due to the pandemic could bring both down upon us at once.

@Dan DiFilippo I didn’t say new construction was down because lumber was expensive.

I said both are reasons prices are up right now. Plus low interest rates which filled the market with buyers.

Prices will continue to rise as demand continues and the supply is limited. But when the supply becomes more plentiful, through an increase in foreclosures for example, prices will drop to compete for buyers.

Same will happen when the moratorium on evictions are lifted and there’s a lot of apartments for rent. Rent prices will have to drop to compete for the buyers.

And I don’t think you understand how the Federal Reserve causes constant inflation, since deflation is the worst nightmare of the banking system. While banks get paid back in dollars less valuable than they lent out because of inflation, in deflation there is massive foreclosures as people can no longer afford their old mortgages which were high due to the low value of the dollar. So the federal reserve chooses inflation over deflation and keeps printing bank notes, aka paper money which water downs the money supply and thus drives up the prices of raw materials and real estate.

That is why real estate, while it has ups and downs over the years, always increases over each ten year period. It’s on a steady increase because of inflation.

@Dan DiFilippo because new construction is down, inventory is low, which is driving up prices because of supply and demand.

And printing money really is printing money and it waters down the money supply, thus inflation which drives up real estate prices.

All of these things are adding to the major increases in home values.

@Connor Pine put it in real estate as fast as you can. The dollar is a sinking ship. It constantly loses value with inflation.

I learned simple principles early on that set me up for success.

“Find something you love to do, and do it so well people will pay you to do it.”

“Live below your means.” “Make more than you spend. Spend less than you make.”

“Buy low, sell high.”

“Keep your capital moving.”

@Scott Lennon lumber went up 33% in the past few weeks. This kind of inflation is driving up real estate values because of material costs. Printing all this money for the pandemic will drive up the prices of homes because of inflation.