So I’m In the Market right now for a property 2 family 4-3 bed and 2 bath minimum no more 150k , and depending who you listen to you’re going to get different opinions about what to do. Some think the market is going to crash in the next 1-2 years. So I did what any rational person would do I bought a crystal ball on amazon for 20 bucks and I’ll also know what the market is going to do.
But seriously Lets talk about it, is it good to buy Real Estate right now or should you wait until the market crashes. And real estate and stocks are different, but one thing every seasoned investor would tell you is, “ waiting for the market to crash is usually not a good idea, because you don’t know when it’ll happen “
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1:53 What’s Going On?
4:33 What Do You Do?
9:05 How do you know you Can afford it
1. Whats Going on in Less than 2M
– You have more Real estate agents than you actually have real estate for sale
– You have more Buyers than you actually real estate
– Real estate went from a rational transaction to a bidding war
– A house can be worst 100k but they sell for 120k or even more, because of this bidding war
So this Means One Thing:
– We are obviously in a sellers’ market ( where the seller has the advantage )
– And people are legit making 20-30% more than they paid for the property just a year ago ( some people are just listing at a crazy price to see what happens )
2. What do you Do : To participate or Do stay out – Market are Markets
– I can guarantee without my crystal pall that the market will crash at some point and I can also guarantee you that it will recover and over the long term real estate will increase ( we know that because of history )
– But the only thing I cant tell you is When, no one can tell you when
Here is What I am Doing : I understand 2 things, a Rush deal is a Bad deal and Real estate purchases are Personal not market based
– First: if you give into the market and you buy a property for 30% more than its worth and lets say the market slows down and then crashes, now you paid 300k but the property now is only worth 150k. And you’re seeing house in your area sell for that price and you actually couldn’t even afford in the first place, this is wear you start panic. True Story Pre 2008 a doctor my aunt knows bought a fancy house and went down that much in value, but 12 years later its pretty solid now. ( you never want to rush a deal )
– Second Real estate is a Personal ( if you can afford the property and you can afford to pay a premium, and you’re going to stay their long term, then its not that bad ).
– Just don’t go to crazy
3. How do you know you Can afford it
– First off Like Robert Kiyosaki use to say
– Everything that’s not in your control, should just be a bonus
– So tax incentives, mortgage rates, or whatever else they are offering should just be a bonus on a deal
– But they shouldn’t be the reason you buy if you cant afford it
So I Follow and will Follow the 33% rule on 15 year mortgage
– It means if I make $4000 income my budget is $1,320 on a 15 mortgage
– And this budget has to be enough to cover the mortgage, maintenance, taxes, insurance and even HOA
– And before I buy, I should have No debt and also a full blown emergency account
But Tommy if I Wait to do these things, I will be priced out
– I don’t think anyone is going to be priced out in 2-3 years, maybe if you 10 years
– But buying with a bunch of debt and bills it’s a problem, increase the risk
– Buying without an emergency account is a problem, because ISH is going to happen.
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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.