410 - What The Heck Is Happening Now?

Real Estate Market Uncertainty Amid Economic Shift

Tyler and Mike discussed the current state of the real estate market and the uncertainty caused by economic and political changes. Tyler, an active realtor, shared his experience from the last crash and his concern about the current situation. He noted an ongoing migration to Florida, but a decrease in sales due to high-interest rates. Despite the demand, people are unable to afford to buy properties due to the increased rates, causing a shift in the market.

Tyler's Finance and Entrepreneurial Journey

Tyler shared his recent experiences, including launching a podcast and becoming a tour guide in Key West. He voiced worries about the current credit crisis, with credit card spending at an all-time high, and the potential issues this could bring for the country. Tyler stressed the importance of having multiple income streams and discussed his involvement in a real estate fund that buys single-family homes and converts them into assisted living facilities. He emphasized the recession-proof nature of this venture and his and Mike's cautious approach to finances. Tyler expressed gratitude for their initial decision in starting the fund, as they managed to avoid an unfavorable adjustable rate mortgage on a 2.7 million dollar property. This would have led to them hitting a debt cap of nearly 9%, amounting to about 3 million dollars. Mike agreed, mentioning that many funds are currently experiencing similar issues due to rising interest rates.

Housing Crisis and Inflation Advice

Tyler warned about the market being in an affordability crisis and advised against speculative investments in real estate. He shared his personal experience of maintaining a long-standing relationship with his landlord in Key West, which allows him to maintain his housing security at a lower cost than buying a home. Despite this, he acknowledged that some people are still buying homes to move into, due to the common belief that it makes sense to buy. Tyler also pointed out the significant inflation in food prices and advised caution for those flipping houses. He concluded by emphasizing that the country is becoming a renter nation and encouraged thoughtful consideration before making a home purchase.

Housing Market Caution and Recession-Proof Investments

Tyler discussed the current state of the housing market, expressing concerns about the potential for a market crash due to rising interest rates and overpriced houses. He advised caution and suggested focusing on recession-proof investments like service businesses and residential assisted living, which he believes will stand the test of time. Tyler also highlighted the potential for buying great deals in Florida when people get scared and the need for a strong team to capitalize on such opportunities. Mike agreed with the assessment and expressed interest in the proposed strategies.

Real Estate Market Forecast: Prices Stable, Rates Fluctuating

Tyler and Mike discussed the state and future of the real estate market. Tyler argued that prices would not decrease and asserted that the market had reached a new normal. He predicted that interest rates would continue to rise, but then drop again, leading to increased buying and further price hikes. Mike found this concept difficult to accept.

Exploring Assisted Living Rental Market Potential

Tyler and Mike discussed the potential of the rental market, particularly in the assisted living sector. They highlighted the demand for such services due to an aging population and the suppression of individual user costs in this sector, which they predicted would soon explode. They also outlined their strategy of leasing properties to Alf operators for five-year terms, reducing risks and ensuring stability. Tyler and Mike closed the meeting by inviting listeners to their upcoming webinar and emphasized the importance of protecting against inflation in investments.

Next Steps

Register for the next webinar at cashflowguys.com/webinar