Behind The Shine 12/2/22

    The latest Case-Shiller report found a 2.2% price decline in U.S. homes since June which means that we’ve moved into the second biggest home price correction of the post-World War II era.

    On paper, it’s tied with the 2.2% drop between May 1990 and April 1991, however, given that the index is a three-month average, we know the October numbers will surpass that mark. Read more here.

    The Fed has announced that smaller interest rate hikes are in store for the next few months, starting in December.

    This could be a good thing for the market finally cooling, interest rate-wise.

    In this article by CNBC, Federal Reserve Chairman Jerome Powell confirmed that smaller interest rate increases are likely ahead even as he sees progress in the fight against inflation as largely inadequate.

    Tonight at 5 PM PST, I’ll be on YouTube LIVE with Kyle Renke, Christian Osgood and Cody Davis to talk about working with a partner in your real estate deals. Come join us and ask questions!

    Let’s say that I said to you, “there’s an opportunity for you to make $200. It’s just about guaranteed. You have to drive four hours in that direction, pick up your $200 and then drive back home.”

    And it might be a little bit difficult. They’re going to ask you to do some pushups when you get there, but other than that, the money’s yours.

    On a scale of one to 10, how quick are you going to jump on that opportunity to get that $200? Would you be like, “whatever it takes, I’m going to fight through a hungry cage of tigers to get to my car so I can go get that money.”

    Probably not. Most people would consider it, but they wouldn’t jump at the chance.

    Now let’s say there’s somebody in your office right now stealing $20 out of your wallet. You’d probably do anything in the world to get there and fight like hell to keep that $20 from being stolen from you.

    Why do we put so much effort into saving $20 but not into gaining $200?

    Oftentimes when we talk about risk, we’re only talking about what could go wrong. We’re not talking about missing out on what could go right. Think about this advice with anything else in life.

    There are two kinds of risk. There’s the risk of buying a property and then losing it because you couldn’t make the payment or there’s the risk of not doing anything and missing out on all the money you could have made.

    How could small multifamily fit into your current portfolio?

    For many people, this is where they get started because it’s probably the easiest and most forgiving asset class of all the ones that I know.

    Others get into this as house hacking because it’s one of the easiest and simplest ways to get a house hack and get in for very low money down.

    For other people that have maybe a short-term rental portfolio, adding something like this to your portfolio can help mitigate some of the risk and kind of smooth out the fluctuations in revenue that you get when you’re a short-term or a medium-term rental investor.

    The same can be true of land flipping, wholesaling, and other things that are a little more volatile.

    Small multifamily is a very solid foundation that can kind of act as a base if your portfolio is a little too acidic.

    So ask yourself, “how could small multifamily fit into what I’m doing, and would this be something that would benefit me?”

    And if you’re not house hacking, you definitely need to start here.

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