Recessions are a golden opportunity for real estate investors

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WHAT I’M THINKING ABOUT RIGHT NOW
I interviewed Brandon Turner from bigger pockets

Now to be fair, the interview took place a few years ago, but I think it was one of the best ones ever on my podcast, just start real estate.

Brandon is one of the smartest guys in real estate over the last decade. And his insights are invaluable. They are in fact cheat codes if you listen to what he tells you.

Here are just a few of the Nuggets he dropped during our hour long interview.

Real estate success isn't just about picking a property and calling it a day.

In fact, Brandon Turner from Bigger Pockets shared a golden nugget on this.

He says treating your investment like a hobby is a surefire way to fail.

Imagine just winging it with a fourplex, giving tenants your number, and handling cash rent.

Sounds simple, right? Wrong.

You'll end up frazzled, fielding midnight toilet repair calls, and hating real estate.

The key is to run it like a business - serious and systematic.

You've got to push past the initial challenges to hit that exponential growth sweet spot.

Now, Brandon didn't just stop there in our chat.

He also divulged some intriguing insights.

Like how he ended up in Maui because... why not?

He saw a place, felt it was right, and simply took the leap.

Turns out, moving there skyrocketed his business and personal happiness.

And guess what? His visibility on the Bigger Pockets podcast has been a magnet for top talent.

This is just a sneak peek into the wealth of knowledge Brandon Turner brings to the table.

For more of his wisdom, check out his text message list at beardybrandon.com or slide into his DMs on Instagram at beardybrandon.

Trust me, this guy's insights are like cheat codes for real estate investors. 🏡✨

You can see the whole interview here:

BRAIN FOOD
Why a recession is a golden opportunity for real estate investors

Reason #1: Increased Motivation from Sellers

Depending on when you're reading this blog, we're either entering the recession, in the middle of one, or perhaps coming out of one. Regardless, a recession brings with it a real estate market churn. Over the last few years, we've seen all-time high house prices, but that's changing. We're entering a time where prices will likely drop in most areas, and as a real estate investor, that's a really good thing.

The media labels this as a real estate downturn, but for us as investors, we should see it as an opportunity. When the media tells sellers that their houses are losing value, it creates motivation for them to sell at a discount quickly. Sellers may be facing distress due to job loss, job transfer, downsizing, death, divorce, or tax delinquency. The media's role in spreading this information helps us as investors in our conversations with sellers.

In recent years, sellers were in a strong position of power, as house prices were appreciating. However, in a declining market, this changes. By leveraging the media and data, we can show sellers that their house values are going down, making it easier for us to buy. It's not about scaring them, but rather telling them the truth about the changing market conditions. As real estate markets shift from a seller's market to a buyer's market, sellers may be slow to acknowledge the decline in their house values. Our job is to help them understand the reality and offer them an opportunity to sell now or possibly face further declines in the future.

Reason #2: New Wholesalers in the Market

The recession and real estate market downturn also bring in new wholesalers. As a house flipper, if you buy from wholesalers, this is great news for you. New wholesalers often lack the knowledge and experience in determining property values and pricing. This means that they may ask for too much or too little when selling properties.

As an experienced investor, you can take advantage of this situation. By helping new wholesalers understand how to properly value properties, you create a valuable networking opportunity. Building a relationship with new wholesalers allows you to access their deals without facing stiff competition. By sharing your expertise and becoming a resource for them, you can establish trust and secure favorable deals that make sense for everyone involved.

Reason #3: New Flippers in the Market

In addition to new wholesalers, a recession and market downturn attract new flippers. When contractors find themselves with less work, they often turn to house flipping. The margins and costs for contractor flippers are different from regular investors who hire contractors.

As a wholesaler, this presents a great opportunity. You can identify these new flippers with different cost structures and margins. Their ability to pay more for deals benefits you as a wholesaler. By bringing them in and showing them your deals, you can negotiate higher sales prices and increase your profits.

Reason #4: Stock Values Drop

During a recession, stock values tend to drop. This is a positive for real estate investors who rely on private money. Raising private money becomes easier when the stock market is struggling. High net worth individuals who have their money in stocks or crypto are looking for alternative investments.

Real estate offers attractive returns and becomes a more appealing option compared to a struggling stock portfolio. As a real estate investor, you have the opportunity to offer great returns that can outperform the stock market. This gives you more leverage and an advantage in raising private money.

Conclusion

In conclusion, a recession and real estate market downturn should be seen as a huge opportunity for real estate investors. Increased motivation from sellers, new wholesalers and flippers entering the market, and the drop in stock values all work in our favor. It's time to take advantage of this golden opportunity, crush the market, and propel our businesses to new heights over the next 24 months!

QUOTE OF THE DAY