back to indexThe_state_of_the_housing_market_and_mortgage_industry
00:00:00.000 |
Hello everybody, it's Sam from Financial Samurai, and in this episode I want to talk about the 00:00:04.720 |
real estate market and the mortgage industry. 00:00:08.320 |
The bottom line is that the real estate market is hot, and the mortgage industry is doing 00:00:19.720 |
If you look at the May mortgage purchase applications index, it closed at close to 11-year high. 00:00:26.400 |
11-year high, because there's a lot of pent up demand after sheltering in place for so 00:00:31.800 |
And I think this is interesting data, because this is what we've been talking about somewhere 00:00:36.120 |
around the end of March and in April, looking for deals, trying to look for real estate 00:00:41.720 |
deals because the stock market bottomed out at the end of March and started to recover. 00:00:47.720 |
So I was thinking to myself, well, let's go look for real estate deals from sellers who 00:00:54.280 |
And frankly right now, even in June, end of June, things are looking still very, very 00:01:00.520 |
But real estate tends to outperform when the stock market is down about 10-15%, because 00:01:05.760 |
money flows into a more stable asset class such as real estate, and mortgage rates start 00:01:12.440 |
And right now we're basically at all time lows, with a 10-year bond yield at about .7%. 00:01:23.440 |
If you want to refinance to a mortgage or get a new mortgage, a 15-year is not a bad 00:01:30.720 |
Personally, I'm biased towards the 7-1 and the 10-1 arm, because the average ownership 00:01:39.680 |
So it makes no sense to get a 30-year fixed and pay a higher rate if you're going to pay 00:01:44.520 |
it off or sell it or own the home for nine years. 00:01:48.320 |
So this demand, this surge in demand for real estate is very interesting. 00:01:53.400 |
It's because mortgage rates have hit all time lows. 00:01:56.360 |
There's pent up demand, three to four months of demand for real estate, because not a lot 00:02:01.240 |
of transactions happened at the end of March, April, May, and in June so far. 00:02:08.760 |
So that's not great for the real estate brokerage industry, because they make their money on 00:02:13.520 |
However, from a buyer's point of view, I think there's an opportunity. 00:02:17.200 |
There's always an opportunity if you look hard enough. 00:02:20.320 |
And when there is a lot of fear and panic, there's opportunity if you have the cash and 00:02:27.880 |
So the demand for real estate goes up also because there's a realization that having 00:02:32.080 |
a home is more valuable, because more time is spent at home. 00:02:35.720 |
I realized this in 2012 when I left my day job. 00:02:39.480 |
So instead of being away from the home for 12 to 14 hours a day, I was suddenly stuck 00:02:44.760 |
at home, well not stuck at home, just spending more time at home reading, writing, relaxing. 00:02:51.320 |
So I was much more willing to spend money on remodeling, building out a deck, getting 00:02:58.240 |
I knew I would enjoy these things much more because I was simply home much longer. 00:03:02.720 |
And I think the world is recognizing this truth that the more you spend time at home, 00:03:10.100 |
And there's also this desire to have a nicer home, because we are spending more time at 00:03:15.520 |
So in the past, maybe you were okay with renting a one bedroom apartment in a not so nice area, 00:03:25.000 |
And you were out for 14 hours a day, so all that noise and the smells and the crime didn't 00:03:31.440 |
But now that you're at home, hey, let's make it nicer. 00:03:37.360 |
Let's get that $1,000 Toto washlet bidet, which heats the seat and shoots warm water 00:03:45.260 |
I mean, that's wonderful if you're going to be going to the bathroom five more times, 00:03:50.080 |
So it's just really logical that the demand for real estate has increased. 00:03:55.520 |
But before you buy a home, I think it's very, very important to understand what's going 00:03:59.780 |
on in the mortgage industry, because the mortgage industry is very tight in terms of its lending 00:04:06.960 |
And the reason why it's very tight is because it has liquidity and profitability concerns. 00:04:14.460 |
There's forbearance programs right now where people don't have to pay their mortgages, 00:04:18.360 |
people aren't paying their rents, so landlords have a difficult time paying their mortgage 00:04:28.660 |
And the lending standard dramatically increased post 2009, which is why I'm quite sanguine 00:04:34.260 |
this time around that the housing market isn't going to implode, because a lot of people 00:04:37.800 |
have a lot more equity piled up in their home, especially after a strong run since about 00:04:45.100 |
But the mortgage industry is the key to keeping the housing market strong and upwards if you 00:04:53.660 |
Because without that capital, the housing market is going to be really suspect, because 00:05:00.780 |
So the mortgage industry, the lending industry is really important. 00:05:05.020 |
And I talked to my lending officer for about an hour the other day, and I wanted to just 00:05:10.720 |
So the first thing, like I said, was that there are liquidity or profitability concerns 00:05:17.780 |
They're wondering, OK, what can we do to protect profitability, improve shareholder value, 00:05:25.700 |
and make sure everybody keeps their jobs in this uncertain time? 00:05:29.000 |
Because they don't know when the economy is going to come back. 00:05:31.660 |
They don't know when forbearance rules are going to be fixed or changed. 00:05:38.180 |
So the banks are doing the best they can for themselves and for their shareholders. 00:05:42.240 |
And at the same time, they're trying to be competitive, because inevitably, there will 00:05:47.940 |
And consumers don't want to hear news headlines saying, this bank denied me of this mortgage 00:05:52.940 |
because X, Y, and Z, especially in this environment. 00:05:56.720 |
Because when there's a recovery, you could see banks who are uncompetitive during bad 00:06:00.360 |
times or unfeeling or uncaring will probably lose out on many, many customers to competing 00:06:07.640 |
So profitability, liquidity concerns, and social concerns, top of mind. 00:06:12.000 |
And so if you are a borrower, you're just going to have to find that lender who's going 00:06:17.900 |
to be a little bit more aggressive during this uncertain time for that best loan. 00:06:23.720 |
The second point is obviously stricter lending standards. 00:06:27.420 |
Due to liquidity and profitability concerns, banks have significantly tightened lending 00:06:32.280 |
And here are some interesting points that you should know. 00:06:38.640 |
At least this bank is not allowing cash out refinances anymore. 00:06:42.760 |
Two, banks are no longer fully counting RSUs. 00:06:46.760 |
Those are restricted stock unit values when calculating how much a person can borrow. 00:06:50.840 |
So if those RSUs are not counted, then the person cannot borrow as much. 00:06:55.920 |
If you work at a tech company, for example, and you have $500,000 in RSUs that suddenly 00:07:00.880 |
are not counted, well, you're definitely not going to be able to borrow as much. 00:07:03.960 |
Three, this is the most interesting thing that I got out of talking to my mortgage lender. 00:07:09.120 |
He said that his bank is no longer including Schedule E income. 00:07:13.280 |
That's all the rental income you earn if you're a landlord. 00:07:17.640 |
So they're not including Schedule E income when calculating how much a person can borrow. 00:07:22.620 |
That is a big shocker, and I don't think I've ever heard of that before. 00:07:26.280 |
Because hey, look, if you're gaining $40,000 a year from your rental property, that's $40,000 00:07:36.200 |
Underwriters have traditionally discounted rental income by about 30%. 00:07:39.960 |
I know through all my previous refinances, they would only assign a 70% value to any 00:07:47.480 |
So $70,000 instead of, let's say, $100,000, because they wanted it to be conservative. 00:07:52.540 |
They wanted to account for vacancies and maintenance expenses and so forth. 00:07:57.400 |
And I understand that 70%, that's about right. 00:08:00.200 |
I guess I would probably do the same if I was a lender. 00:08:02.960 |
But to discount 100% of all rental income, that is pretty extreme. 00:08:10.000 |
So you can take this both ways, in a positive or negative way. 00:08:13.940 |
The positive is that there's so much demand for property right now with mortgage rates 00:08:19.080 |
so low that despite not including Schedule E income, rental income, mortgages are still 00:08:28.300 |
So when banks finally do allow for Schedule E income, which my mortgage loan officer said 00:08:33.500 |
is coming over the next one or two months, it's kind of like rolling lockdowns, phase 00:08:39.560 |
Slowly getting released, it's getting a little bit better and looser. 00:08:42.860 |
That could very well unleash a lot more capital into the system. 00:08:47.500 |
On the negative side, I would just say that lenders are perhaps exacerbating the situation. 00:08:54.300 |
Unemployment, tough to get credit and all that. 00:08:57.200 |
And so there's going to be a bifurcation of who will get mortgages and who will not. 00:09:01.580 |
And then over the coming years, I think if things recover right, there's going to be 00:09:06.760 |
a widening of the wealth gap spread once again. 00:09:09.700 |
All right, let's continue on other tightening lending standards. 00:09:14.380 |
This bank, it's a top five bank in the country. 00:09:18.220 |
It's no longer approving home equity lines of credit. 00:09:21.580 |
They have raised the minimum down payment to 20% and they've raised the minimum credit 00:09:29.060 |
And for the jumbo loans, I think they raised it to 740 and above. 00:09:33.260 |
So anything above 720, 740 is considered excellent credit. 00:09:37.820 |
So the bank is only lending to people with large down payments and excellent credit. 00:09:42.420 |
So again, this, if it continues, it could be good in terms of the people getting the 00:09:48.620 |
loans, the capital are going to have a lower chance of defaulting. 00:09:52.600 |
Right now, the default rate, well, as of October 2019, the research that I saw was about 1.9%. 00:09:59.020 |
I think the default rate might be higher now, but I'm not so sure because the government 00:10:04.540 |
has implemented, you know, you can't default because there's forbearance rules and you 00:10:09.140 |
can't go bankrupt because of COVID-19 and all that stuff. 00:10:11.780 |
So everything is kind of suspended in air with a lot of uncertainty. 00:10:15.820 |
So the bottom line is lending standards are strict and everybody is feeling the crunch, 00:10:21.060 |
including the banks, and they don't know exactly what the future holds. 00:10:25.800 |
In terms of jumbo loans, jumbo loans are loans that are above the conforming loan limit. 00:10:32.220 |
So nationwide, the conforming loan limit, according to the Federal Housing Finance Agency, 00:10:39.900 |
However, in different states and cities, the conforming loan limit is different because 00:10:47.680 |
So in San Francisco, for example, the conforming loan limit is $765,600 for single family home 00:10:56.100 |
And it's different all throughout, but that is one of the top conforming loan limits in 00:11:02.180 |
So it is much easier to get a conforming loan than a jumbo loan. 00:11:07.660 |
Conforming loans can be sold off to government-backed Fannie Mae and Freddie Mac. 00:11:12.620 |
So what happens is the bank gets the loan, they underwrite it, it's good to go, they 00:11:17.420 |
sell it to Freddie Mac and Fannie Mae and offload that risk off their books so they 00:11:24.660 |
However, there's something really interesting that I heard from my mortgage loan officer 00:11:28.180 |
and he said that there's new regulation that states if you sell a mortgage to Fannie Mae 00:11:33.260 |
and if the borrower of that mortgage was late on even a single payment or is in forbearance, 00:11:39.860 |
his bank would be required to not only buy back the entire mortgage but also pay an 11 00:11:48.540 |
So an 11 point penalty is equivalent to $77,000 penalty on a $700,000 loan. 00:11:57.060 |
And whoa, no wonder if this is true, which it has to be true because he told me it's 00:12:01.340 |
true that banks are being much, much more stringent. 00:12:08.360 |
These are new originated loans that they sell to Fannie or Freddie. 00:12:13.820 |
So you can see from a lender's perspective how they are much, much more stringent because 00:12:19.060 |
paying that 11% penalty is massive compared to the spread that they earn on these loans 00:12:26.700 |
Jumbo loans cannot be sold to Fannie Mae or Freddie Mac. 00:12:31.140 |
They can be sold and bundled to the private mortgage market, secondary market. 00:12:36.300 |
However, my lender was saying due to more regulations, his bank is keeping most of the 00:12:43.900 |
Therefore, they've got to be very, very stringent on their lending standards. 00:12:48.940 |
Another interesting thing I learned from my lender is that small business owners are getting 00:12:53.020 |
more scrutinized and they seem to be getting more penalized than normal W-2 earners. 00:12:59.580 |
In other words, the PPP loan, the Paycheck Protection Program loan, could be a red flag. 00:13:06.020 |
He was saying that when the bank takes a look at a small business owner's books and does 00:13:13.360 |
the thorough P&L calculation and whatnot, if the bank sees a PPP loan, that could be 00:13:19.360 |
a red flag regarding the viability of the business. 00:13:22.380 |
I think this is an interesting stance because you can also make the argument that a small 00:13:26.100 |
business has a greater chance of surviving because it has received a PPP loan. 00:13:31.300 |
If the loan is forgivable, which the government says it is, why wouldn't more money be more 00:13:38.340 |
But banks, again, really conservative right now, are just looking at everything and wondering, 00:13:44.300 |
"Hmm, maybe we shouldn't lend to a small business owner because it may never recover. 00:13:49.700 |
Whereas, in contrast, there continues to be only a routine concern about the W-2 employee 00:13:55.740 |
loan applicant potentially losing his or her job. 00:13:59.940 |
But that is probably elevated too because there are tens of millions of people unemployed 00:14:04.740 |
And if you are a small business owner or if you're thinking about creating a small business, 00:14:10.500 |
It's important for you to make your business unshutdownable. 00:14:16.340 |
The government has forced shutdowns for three to four months of millions of small businesses 00:14:23.620 |
So in other words, you should really think about a business that's online, that will 00:14:28.060 |
go and operate regardless of whether there's a pandemic or whether there's a government 00:14:33.740 |
So long as you're not doing anything shady and wrong online, it can continue to operate 00:14:39.180 |
Not only should you have higher operating profit margins, the value of your online business 00:14:43.840 |
should grow as well because the sustainability and the security of those future earnings 00:14:53.560 |
So there's something interesting to note and something that I'm very appreciative about 00:14:57.100 |
with Financial Samurai as I try to run it more like a small business now to take care 00:15:02.620 |
And that is, gosh, yeah, traffic could be down, revenues down or whatever. 00:15:08.220 |
But so long as Financial Samurai stays up, it's fine. 00:15:12.080 |
And I am, interestingly enough, fielding a lot more inquiries about buying Financial 00:15:16.620 |
Samurai and I myself am looking for online businesses to buy because valuations are relatively 00:15:25.660 |
And these businesses are very, very defensible. 00:15:28.620 |
And I'm seeing a lot of online businesses do very well in this time because more dollars 00:15:34.020 |
are directed for certain types of products like hot tubs, like home gardening and landscaping 00:15:40.460 |
It's just a really, really interesting time right now. 00:15:42.780 |
So if you have some capital and you think the stock market is overvalued and maybe you 00:15:47.940 |
don't want to invest in real estate property, I would look at online real estate. 00:15:56.020 |
But online real estate to me is, I think it's number one asset class right now. 00:16:02.060 |
So let's put all this together regarding how a tighter mortgage industry will affect housing. 00:16:07.860 |
Well, it's logical to conclude that a tighter mortgage industry will negatively affect the 00:16:16.020 |
However, as I spoke earlier, there's an overwhelming amount of demand to purchase property due 00:16:22.340 |
to confluence of all the reasons I stated in my introduction, right, lower mortgage 00:16:27.060 |
rates, the desire for better property, because you're spending more time, the desire for 00:16:33.340 |
investing in a more stable asset that you can actually enjoy, and so forth. 00:16:38.220 |
I say that the real estate segment that's doing the best is the price point where you 00:16:49.060 |
$510,400 nationwide up to $765,600 for expensive cities like San Francisco. 00:16:57.020 |
So assuming an 80% loan to value ratio, which is putting 20% down, there is a strength in 00:17:09.460 |
Obviously, if you put more down, you can still borrow a conforming loan limit. 00:17:15.880 |
So for example, a person can afford a $2.765 million home using a conforming loan if he 00:17:23.260 |
or she puts down $2,010,000, right, so a 72.5% down payment with a loan to value ratio of 00:17:35.340 |
Conforming loans are easier to get than jumbo loans. 00:17:38.020 |
Therefore, the housing price point that is going to do relatively well is where conforming 00:17:44.460 |
loans are able to be used to buy this price point. 00:17:48.760 |
So the higher you go, the harder it is to get a loan, and once you get into the jumbo 00:17:53.120 |
loan, this is where borrowing gets more difficult. 00:17:56.220 |
In other words, if you want to find a real estate deal, and if you can afford it, obviously 00:18:00.940 |
if you can afford it, then you want to look at that price point where jumbo loans start 00:18:08.180 |
And the higher the price point, the more deals will be had. 00:18:13.060 |
Because in this environment, extraneous stuff, vacation properties, mansions, whatever it 00:18:19.360 |
is that you don't really need are probably going to be the weakest, because those are 00:18:23.840 |
the types of property that will be sold off first, and those are the properties that are 00:18:29.220 |
not going to be desired by people the most, because you don't need all that extra space, 00:18:35.080 |
nor do you want to spend as much money during this time of uncertainty. 00:18:39.320 |
It's really up to you to find that higher price point in your city where there are more 00:18:44.960 |
If you're looking for property deals near your city's median home price, let's say plus 00:18:48.680 |
or minus 25%, maybe plus or minus 30 to 40%, it's tough right now, because a lot of people 00:18:56.080 |
can afford that price point, which is why it's the median price point of your city. 00:19:00.600 |
To find value, you've got to go up the price point, which is going to entail obviously 00:19:06.320 |
more risk and more expenses and more costs, but if you've got the cash and the income 00:19:11.600 |
and so forth, you're going to find much better deals. 00:19:15.040 |
There's one last thing I want to leave you with, and that is this. 00:19:18.800 |
If you get pre-approved for a jumbo mortgage in this tight lending environment, you can 00:19:27.920 |
However, you need to immediately turn that feeling of triumph into caution. 00:19:33.160 |
Caution, caution, caution when it comes to buying anything with debt. 00:19:37.800 |
Remember, leverage always enhances returns on the way up, but destroys returns on the 00:19:46.800 |
Leverage is very dangerous, and right now is a time of uncertainty, so you probably 00:19:56.800 |
Getting pre-approved for a mortgage today is like being a part of a small team of soldiers 00:20:06.000 |
The beaches are there, you can't see your enemy, but they're there in the hills behind 00:20:13.920 |
Your combat skills and artillery may be top-notch, but your enemy will still wipe you out simply 00:20:22.360 |
In order to win the war, which is to have the property market go up, you would rather 00:20:26.880 |
have 100 times more people on your side with fighter jets and warships as well. 00:20:33.080 |
Maybe this analogy is getting a little out of hand, but the point is you'd rather have 00:20:37.720 |
everybody qualified for a mortgage instead of only a small few. 00:20:42.480 |
You don't want the small few to represent the whole. 00:20:47.440 |
Remember during the last downturn, let's say you owned a condo and you were diligent in 00:20:51.560 |
paying your mortgage and everything was good, but a couple people in your building decided 00:20:56.640 |
to foreclose or short sale or whatever because of whatever reason they want. 00:21:02.080 |
That negatively impacts everybody's valuations and that's really, really tough. 00:21:07.480 |
You can talk about the guy in your block, single family home, foreclosing and that hurting 00:21:14.440 |
It's the small few during a downturn that can really hurt the overall property market. 00:21:23.720 |
If you can get a win, it's just not strong enough. 00:21:26.720 |
You need the masses, the majority, the vast majority to do well for the property market 00:21:33.880 |
Just because you've locked down an ultra low mortgage rate that's burning a desire in your 00:21:44.720 |
Instead, you should buy property if you've identified the ideal home, can afford the 00:21:49.400 |
payments, have run various scenario analysis and plan to live or own the home for years 00:21:56.960 |
The unemployment market is scary and I think the longer that it lasts, there's going to 00:22:03.620 |
Right now, we're hoping for the good graces of the federal government and the federal 00:22:08.680 |
reserve to save us, to save us from falling into the abyss. 00:22:12.920 |
There needs to be hopefully another round of PPP loans, for example. 00:22:17.740 |
There probably needs to be another round of stimulus checks and there needs to be an extension 00:22:21.460 |
of enhanced unemployment benefits because fighting this virus is taking a long time 00:22:27.400 |
and I don't know if we're going to be able to completely fight it off by July 31st when 00:22:32.640 |
the enhanced unemployment benefits of $600 more a week are set to expire. 00:22:38.340 |
I'm always trying to throw caution in the wind, especially when it comes to buying property 00:22:45.080 |
So just take it for what it is and run the numbers and be cautious. 00:22:49.120 |
My lender said the demand he is seeing for purchase applications is the strongest he's 00:22:55.940 |
His business is booming because refinancing continues to be super strong as well. 00:23:00.380 |
I was able to lock in a 7-1 arm jumbo at 2.125%. 00:23:09.200 |
I just want to buy up everything that I can, but you know, I'm trying to be reserved and 00:23:14.280 |
be measured because buying a home is a very big decision. 00:23:20.680 |
Ask him or her what he or she is seeing in the market, what they are doing, when do they 00:23:26.080 |
expect to return to its pre-pandemic lending standards. 00:23:30.160 |
I mean, pre-pandemic lending standards were already pretty strict, but now it's super 00:23:35.520 |
No Schedule E, no RSUs, credit scores high, down payments and so forth. 00:23:41.180 |
What you have to think about as a home investor and a home buyer is when the standards will 00:23:48.480 |
If it's by the end of the year and we expect the Federal Reserve and the Federal Government 00:23:54.340 |
to have more stimulus, I think real estate is probably going to continue to do fine. 00:23:59.880 |
The desire for real estate, because we're spending more time in our homes, is overwhelming. 00:24:05.800 |
At this moment, the fear of losing your job and your income, and I think a lot of people 00:24:11.060 |
are thinking, "Well, I can afford it right now because interest rates are so low, and 00:24:15.520 |
worst case, if I lose my job or whatever, I can hang out and hold out for one or two 00:24:19.520 |
years while enjoying a nicer piece of property, and I want to live my life now." 00:24:24.480 |
And this is something that I've been thinking about a lot that I'll talk about in the next 00:24:27.880 |
episode or write about in a new post, and that is whether to stack cash and not utilize 00:24:34.480 |
my hard-earned savings and earnings, or actually spend the money to try to make a better life. 00:24:41.040 |
And this is something that I think a lot of people are thinking about, and buying real 00:24:46.360 |
estate is something where a lot of people think could help improve the quality of their 00:24:51.200 |
And if the real estate market starts going down, and there's going to be more price cuts, 00:24:55.920 |
which there are at higher price points, and if the lending standards continue to be tight 00:25:00.400 |
well into 2021 and so forth, then we should expect property prices to fade. 00:25:06.480 |
And that's not going to feel good if you buy the property, but at least you'll be able 00:25:10.720 |
to enjoy your home, which is again what I think most people are thinking about right 00:25:16.280 |
Let's buy a home to live a better life today because tomorrow is not guaranteed. 00:25:21.480 |
I would say this if you want to buy a property. 00:25:23.840 |
One, you should try to get a discount of between 5 to 10% from pre-pandemic levels. 00:25:33.120 |
This 5 to 10% buffer is necessary, I think, just in case everything drags on for longer. 00:25:40.000 |
Second, I think you've got to promise yourself that you're going to own the property for 00:25:44.000 |
at least 5 years, if not 10 years, because of transaction costs and so forth. 00:25:50.200 |
Those transaction costs really eat things up. 00:25:52.080 |
It's probably going to cost 5 or 6% to sell a property. 00:25:55.200 |
Hopefully not in 10 years as the internet reduces friction in selling costs. 00:26:00.240 |
But still, let's say it still costs 2 to 3%, you've got to hold on to that property for 00:26:05.200 |
Another criteria I urge you guys to follow if you want to buy a property is to not borrow 00:26:11.000 |
more than 3 times your annual household gross income. 00:26:15.400 |
So if your annual household gross income is $200,000, try not to borrow more than $600,000, 00:26:24.280 |
If you really, really want to push that multiple as 5x, definitely don't borrow more than 5x 00:26:33.120 |
And it's gone to 5x because mortgage rates are so low right now. 00:26:36.160 |
In the past when it cost 5%, 6% to get a mortgage, yeah, the 3x multiple is probably more appropriate. 00:26:44.160 |
But now I guess you can go to 5x, but I personally am not going more than 3x. 00:26:49.960 |
It is really interesting time to buy right now because there are no open houses. 00:26:55.280 |
Open houses, I think that's one of the biggest contributor to bidding war because people 00:27:01.600 |
And as soon as you see someone else like it, you start feeling this FOMO, this frenzy. 00:27:06.600 |
And that's what happens at least here in San Francisco. 00:27:09.080 |
I remember buying my property in 2000, I put an offer in end of 2004, early 2005, because 00:27:16.120 |
I saw another couple sitting in the living room during the open house and I was thinking 00:27:23.720 |
So I ended up offering about $25,000 more than I wanted to, which in retrospect, fine. 00:27:28.740 |
It turned out okay because I sold it in 2017 for a good profit. 00:27:33.660 |
But not having to deal with the emotional buying aspect of it by seeing other people 00:27:38.280 |
competing for a property you want is actually really powerful. 00:27:42.400 |
It's very powerful if you're a buyer right now because you can really get better deals. 00:27:51.840 |
I promise you this, folks, because I have seen private open houses, I've done like four 00:27:56.760 |
or five over the past two months on properties I really, really like. 00:28:02.480 |
I'm just thinking to myself, "Much more rational. 00:28:04.400 |
I'm much more calm when I'm thinking about the numbers." 00:28:08.120 |
And as a result, I'm going to be able to get a better deal. 00:28:11.600 |
So I think once open houses start becoming commonplace again, let's say everybody has 00:28:16.240 |
to wear a mask and let's say it's only 10 at a time or five at a time, whatever, that 00:28:21.920 |
emotional frenzy, folks, I promise you is going to come back. 00:28:25.620 |
And I think that could really ignite the housing market again, besides all the pent-up demand, 00:28:33.440 |
I'm rambling on a long time, but I'm very passionate about this. 00:28:36.980 |
And I really want you guys to get this right because a lot of us didn't get this right. 00:28:40.960 |
And I didn't get this right in 2007 when I bought my vacation property. 00:28:43.880 |
That was a terrible, terrible investment and idea. 00:28:51.340 |
Do your best to understand the housing market. 00:28:54.720 |
If you have not found the ideal property, move on. 00:29:02.320 |
There's always going to be another one coming along. 00:29:09.520 |
If you enjoyed this episode, I'd love a positive review. 00:29:14.360 |
Let me know how your property hunting is going.