Offices across the country are still sitting empty. The nationwide office vacancy rate reached a high of about 20% in the first quarter of 2023, according to JLL, and while big tech companies are pressuring workers to return to the office, the hybrid work model has led to an increase in commercial office delinquencies. According to Trepp, a real estate analytics firm, the office delinquency rate surged 125 basis points in May to over 4%. This spells trouble for the commercial real estate market ...
Aug 14, 2023•13 min•Ep. 1034
We all hate market meltdowns, and this one was bound to happen. We just didn’t know when, exactly how, or how bad things would get. But we now know the answer to the first two of these three questions. When? Currently underway. How? See below. How bad? No one knows. The purpose of this article is to explore what led up to the unfolding meltdown of what is happening now. Then, based on the 10 items I consider below, investors can draw conclusions about what may happen next and how bad this could ...
Aug 13, 2023•15 min•Ep. 1033
Another famous name is weighing in on the housing market. A few weeks ago, it was Elon Musk claiming that home values would plummet as commercial real estate faced headwinds. Now, it’s Barbara Corcoran—albeit a more experienced source when it comes to real estate—touting the opposite. The statements came in a recent interview Corcoran did with Fox Business’s Liz Claman. “There’s no relationship between the commercial and the residential,” Corcoran told her. “The residential is starting to reboun...
Aug 12, 2023•5 min•Ep. 1032
The record-breaking rent growth of the last several years is showing signs of fading. Earlier this month, Redfin reported that rent growth slid 0.6% on a year-over-year basis for the first time since the pandemic. This is, of course, a modest decline in rents, but it begs the question: will there be a bigger correction or even a crash in rents? Or is it possible that rent growth will pick back up in the coming years? Let’s dig in. Where Rent Growth Stands When we talk about rent growth in the U....
Aug 11, 2023•8 min•Ep. 1031
Real estate investors want to avoid unnecessary taxation, and while there are many clever ways to reduce your effective tax rate, it can be difficult to simultaneously achieve robust asset protection. That’s because accountants and attorneys each have knowledge gaps that prevent them from seeing the full picture, according to Riley Neilson, real estate investment manager and founder of Flying ‘N’ Group. His business brings together lawyers and CPAs to help his clients achieve the delicate balanc...
Aug 10, 2023•11 min•Ep. 1030
Commercial real estate is melting down fast. Home values next.— Elon Musk (@elonmusk) May 29, 2023 That’s what Tesla and SpaceX founder Elon Musk tweeted last week in response to a stream of tweets from venture capitalist David Sacks. In that series, Sacks claimed that Fed rate hikes and the increased borrowing costs they led to are causing a slew of problems in the financial world, including a soon-to-be crash in commercial real estate. That latter part could certainly be possible. In fact, JPM...
Aug 09, 2023•6 min•Ep. 1029
Is it still possible to find undervalued commercial real estate investments? I believe it is, and I’ll prove it by telling you a remarkable story about a recent investment we made in a Nevada self-storage opportunity. We’re in a Transitioning Market We are in a time of transition. From a booming market to a shaky market. From historically low interest rates to the highest we’ve seen in years. From eager buyers, sometimes willing to overpay, to sidelined buyers, waiting to see where the falling k...
Aug 08, 2023•8 min•Ep. 1028
According to a recent report by Fannie Mae, there are concerns about the housing market. The U.S. housing market has experienced some ebbs and flows this year, but it’s undoubtedly been in correction mode. With elevated interest rates and tightening lending practices, Fannie Mae is forecasting a “modest” recession with a soft landing starting in the second half of 2023. Learn more about your ad choices. Visit megaphone.fm/adchoices
Aug 07, 2023•7 min•Ep. 1027
Federal eviction moratoriums lasted nearly 18 months, from early 2020 through late August 2021. Even after the federal eviction moratorium ended, many cities and states continued preventing landlords from enforcing their lease contracts. Some cities went so far as to use federal tax dollars to give free legal aid to tenants to fight lawful evictions long after moratoriums ended. And that’s even after taxpayers paid for nearly 10 million rent assistance payments, albeit months after it did many l...
Aug 06, 2023•11 min•Ep. 1026
Commercial real estate is facing a lot of stress. Many analysts and investors, including myself, expect to see significant value declines across much of the sector in the coming year. But one particular type of commercial real estate is facing the biggest crash potential of all: office space. And even if you don’t currently invest in office space, the future of this huge asset class will have large implications for the broader real estate market and the economy as a whole. The idea that the offi...
Aug 05, 2023•13 min•Ep. 1025
By most accounts, the Fed will hold steady after raising the federal funds rate by a quarter point to 5.25% at the beginning of May. A Reuters poll found that 102 of 116 economists thought the Fed was done raising rates this year, and 30 believed they would lower it. With inflation down from its high of over 9% last year to 4.9% in April of this year, it might seem like the Fed should reverse course now. But as Michael Gapen, chief economist at Bank of America, noted, “Inflation is more than dou...
Aug 04, 2023•14 min•Ep. 1024
Detroit, Philadelphia, Cleveland, and Houston. Those are the only four remaining cities where it costs less to buy a typical home than to rent, according to a new report from Redfin. The analysis compared March home values and rental estimates assuming a 5% downpayment and a 6.5% mortgage rate for the 50 most populous metro areas in the United States. Back in January 2022, an analysis from Realtor.com showed that buying a home was more affordable than renting in more than half of the largest met...
Aug 03, 2023•11 min•Ep. 1023
Your offer was just accepted on a beautiful property in Central Florida just a few miles from the coast. The income you will make from this short-term rental will fund your early retirement plans. Everything is humming along relatively smoothly—until you get your quote back for the insurance. Now, you feel like you just got punched in the gut. The cost of the insurance will certainly take a chunk out of your profits, but after talking to an agent, you count yourself lucky because had you been lo...
Aug 02, 2023•11 min•Ep. 1022
Atlanta, colloquially referred to as the “capital of the South,” is a large and growing market with interesting investment opportunities. The metropolitan area, officially defined as Atlanta–Sandy Springs–Alpharetta, has a population of over six million and hosts the headquarters of many well-known companies such as Coca-Cola, CNN, and Chick-Fil-A (all of which oddly start with the letter “C”), and has an excellent sports scene anchored by the Hawks (NBA), Braves (MLB), and Falcons (NFL). In thi...
Aug 01, 2023•8 min•Ep. 1021
Passive activity loss rules are complex. These rules prevent you from using tax losses from your rentals to offset your active income. A foundational understanding of the rules will save you thousands of tax dollars over your investing career. And knowing how to review your tax return to ensure these rules were successfully applied is an investor superpower. For instance, if you opened your tax returns, can you find the amount of suspended passive losses carried forward to next year? And can you...
Jul 31, 2023•10 min•Ep. 1020
Managing your real estate investment portfolio gives you more control over your assets and risk exposure. You can monitor the growth strategy of your real estate business so that it always aligns with your goals, which can change as you add alternative investments to your portfolio. While successful property management can vary among investors, there are key strategies that can enhance your skills as a real estate portfolio manager. These strategies can help you effectively manage your investmen...
Jul 30, 2023•18 min•Ep. 1019
Starting a real estate business can be a lucrative venture. Real estate investment provides various avenues for building wealth and achieving financial freedom, such as generating passive income through rental properties or earning profits through property sales. However, there is much to learn about real estate investing before closing deals. Real estate investing (REI) offers endless opportunities for growth and success. But, starting a real estate business requires planning, preparation, buil...
Jul 29, 2023•13 min•Ep. 1018
Starting a real estate business can be a lucrative venture. Real estate investment provides various avenues for building wealth and achieving financial freedom, such as generating passive income through rental properties or earning profits through property sales. However, there is much to learn about real estate investing before closing deals. Real estate investing (REI) offers endless opportunities for growth and success. But, starting a real estate business requires planning, preparation, buil...
Jul 28, 2023•14 min•Ep. 1017
The real estate industry is dynamic and ever-evolving. Market conditions are constantly influenced by factors like supply and demand, interest rates, and economic cycles, to name a few. Any of these factors can cause your property values, rental income, and investment opportunities to fluctuate. Before real estate investment trusts (REITs) were established in 1960, only ultra-wealthy investors could invest in high-income-producing properties like commercial real estate and apartment buildings. N...
Jul 27, 2023•19 min•Ep. 1016
A sound understanding of how to calculate debt-to-income ratio is critical to your overall financial health. Rather than guess and hope for the best, this blog post breaks down everything you need to know about the debt-to-income ratio. What is a Debt-to-Income Ratio? Debt-to-income ratio (DTI) is a financial metric that shows how well you manage debt repayment in relation to your total income. In short, it’s the percentage of your gross monthly income that goes towards paying your monthly debts...
Jul 26, 2023•7 min•Ep. 1015
Are you considering selling a rental property? If so, using the right strategies can help you profit from the sale of an investment property and reduce your tax liability. Marketing the rental property, deferring capital gains taxes, and having a robust sales strategy are a few ways to sell an investment property for the best price. Investment properties can be a reliable source of income to build personal wealth and enjoy recurring cash flow. However, circumstances change, and you may need to s...
Jul 25, 2023•19 min•Ep. 1014
Every journey begins with a single step, and real estate investing is no different. Now that you’ve gotten your feet wet and learned a few lessons from your first investment, it’s time to grow your mindset andportfolio. Whether you’re an active investor looking to achieve financial independence or a passive investor wanting to earn extra income, expanding your business requires changing your goals. If you just want to earn a little money and call it a day, that’s fine. However, if you’re interes...
Jul 24, 2023•15 min•Ep. 1013
Just because you own real estate doesn’t mean you have a real estate portfolio. It takes time, and you must be intentional about your real estate investing. A solid strategy guiding your buying and selling habits can help you build your portfolio and track your results. Once you have a strategy for buying an investment property and have created a real estate portfolio demonstrating your ability, you can scale your real estate business and achieve your financial goal. Your real estate portfolio p...
Jul 23, 2023•17 min•Ep. 1012
Deciding when to sell an investment property can be one of your most challenging decisions. The problem is that real estate markets are constantly changing. Selling a rental property too soon could mean missing out on a property boom. However, holding on to a dud property may result in significant financial losses. When is the best time to sell an investment property? It all comes down to timing. Market conditions, tax breaks, property appreciation, investment goals, and personal circumstances c...
Jul 22, 2023•18 min•Ep. 1011
The 1% rule is a real estate investment guideline indicating the minimum monthly rent you must charge to break even on a rental property. The rule states that your rent should be at least 1% of your property’s sale price. While the 1% rule can be a helpful metric for investment properties, it’s meant to be more of a filter than anything. You should take it with a grain of salt, especially when accounting for current home prices. This post will detail the 1% rule, what it doesn’t account for, and...
Jul 21, 2023•9 min•Ep. 1010
News of a potential housing market correction often causes many Americans to be concerned about the global economy, but this concern may be unfounded. A correction isn’t necessarily a bad thing. It may help to improve housing demand and inventory when property values increase faster and higher than the norm. Housing market corrections impact people differently, and there are both pros and cons to consider depending on whether you are buying or selling. For the real estate investor, a market corr...
Jul 20, 2023•14 min•Ep. 1009
There are plenty of platforms that short-term rental real estate investors can use to market their space, but two of them make up the lion’s share of the industry: Airbnb and VRBO (Vacation Rentals By Owner). While their primary functions are similar, Airbnb and VRBO have many key differences in the types of properties available, target audiences, fees and commissions, and much more. Let’s match Airbnb vs. VRBO to determine which platform best suits your investment strategy. Learn more about you...
Jul 19, 2023•14 min•Ep. 1008
If you’re wondering how to grow your real estate business, you must learn about some of the most successful strategies for scaling your investment portfolio. Taking the time to educate yourself on the real estate world and what others have done to achieve success is a good first step. But to take your real estate portfolio to the next level, you must implement scalable techniques with proven results. When you create a well-defined plan and take action, you’ll witness substantial growth and progr...
Jul 18, 2023•19 min•Ep. 1007
Did you know you can add a layer of privacy to your entire portfolio through anonymous ownership on public filing for your assets? Holding property in your name makes it easy for anyone to find you through a simple public record search, exposing you to potential frivolous claims from upset tenants. However, by adopting anonymous ownership strategies, you can make it more difficult for them to identify and target you, providing a level of protection against such lawsuits. In this post, we’ll talk...
Jul 17, 2023•14 min•Ep. 1006
Are you looking at a real estate purchase agreement and trying to decipher its essential elements and terms? If so, that is understandable. A purchase agreement for buying or selling property involves complex legal expressions and procedures. So, it’s easy to get confused with terms like disclosures, sale inclusions, contingencies, and earnest money deposits when talking about real estate transactions. Understanding the key elements and terms in a real estate purchase agreement is crucial for bu...
Jul 16, 2023•16 min•Ep. 1005
