Welcome to “Tarl's Weekly Insights," my take on real estate today.
Hey there,
I have a juicy take on the market for you this week… but first, I want to invite you to an event I’m speaking at in May that you don’t want to miss…
If you’re overwhelmed by the amount of information online, secure your ticket to the REI Summit May 3-5th in Denver, Colorado for an in-person immersive education so you can be a part of the most ACTIONABLE real estate conference out there.
And unlike other online educators or events, we’re not going to sell you anything from the stage (making you feel like you need you won’t be successful without buying more before you can even implement what you’ve learned). That’s a promise.
You’ll get to network with other action-takers in the business who are serious – serious enough to make time to get to the Summit!! Imagine adding 5, 10, 20+ serious real estate investors to your arsenal of support and collaboration for when this business gets hard…
Plus, you’ll get to hang out with me, Brandon Turner, Ken McElroy, David Greene and other incredible real estate investors! Prices go up soon, so save nearly $800 off the full price ticket by locking your seat in now! And if you use my discount code, TARL10, you’ll save even more.
Get more details and lock it up here: www.reisummit2024.com!
Back to the juicy stuff… This may be your last opportunity. However running towards a fire may not be your thing...
Over the last two years, I have been meeting regularly with my friend Ken McElroy (author of ABC's of real estate investing, 10,000+ units, MC Companies) to not just hang out and catch up, but to also talk business and discuss the market.
Something we have both been discussing a lot lately is the current disruption going on in the commercial and multifamily space. Unless you are 'in it' you may not notice it.
The next two years there will be many opportunities, but will you see them?
However, on a different side of the table, the question is… what is going to happen with the single family housing space?!
Single family housing (SFH) is affected by interest rates, just like all real estate. However, the biggest single factor that moves the needle the most when it comes to SFH is Supply and Demand – Macro Economics 101 (I dropped out of college but I still remember this concept).
Recently, Ken posted a video where he goes into great detail about how supply and demand will affect the SFH (and multifamily) markets over the next two years, and what will happen afterwards (you can watch this video for his full breakdown).
In summary, 2024 and 2025 may be your best and last opportunity to find and buy 'good deals’. Why? Simple, supply and demand!
Although there are many factors at play, hear me (us) out.
Over the last 18 months (since rates began to rise), builders of SFH and multifamily have been in a tailspin trying to offload their existing inventory. In SFH, many builders are offering EXTREME concessions to 'buy down' buyers interest rates at purchase, as much as 6-9 points on their loan!
A friend of mine here in Texas that builds subdivisions, sells homes around the $600k-700k mark…
And he is giving away up to $60,000 in concessions to pay down people's interest rates and offload his inventory as much as possible right now!
But why not just lower the price of the house?
There are SO MANY factors for a builder to consider when doing this, and since I do not have the space to write a book about this in this newsletter (maybe a future one), you will just have to trust me that it is better if the builder buys down the rate vs lowering the purchase price of the housing.
Why is this important?
Rates TODAY are high, and banks TODAY are in ZERO mood to lend on NEW CONSTRUCTION. Even if rates drop a bit, lenders still want to avoid lending on risky investments today, and new construction is the RISKIEST investment for a bank to lend on.
What does this mean?
It means that NO NEW INVENTORY is being started today… none. Builders do not want to take the risk, and neither do the lenders, yet we have a massive housing shortage throughout the USA.
Between now and the end of 2025, all the new housing units being built and finished up are units that were planned and started prior to rates rising (in SFH and multifamily). Thankfully, these new units will help level supply/demand today.
With rates being high and supply going up in some markets, this will stabilize pricing (and lower in some markets).
HOWEVER… after the last of the supply is built and sold… there is no more supply coming on the horizon. It is our belief, that at that point, you will begin to see prices rise once again, and the opportunity passing you by.
In summary, think long term.
If you flip houses… think about becoming a "Recovering House Flipper" like myself, and work on keeping properties instead of selling them.
Your future self will thank you years from now.
But if you don’t know what actions to take, I recently launched a new support group called Flippers Anonymous where we work at doing just that! You get access to me in the exclusive members only Facebook group and every week live!
If you’re ready to take advantage of this market, click here to join.
That's it for this week’s newsletter! DM me on Instagram and let me know what you think about the market.
Talk Soon,
Tarl Yarber
P.S. Another reminder because I don’t want you to miss out on the fun and seeing me speak at REI Summit… You’ll save nearly $800 by locking your seat now and more by using my discount code: TARL10! Visit www.reisummit2024.com.
