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231 Zillow Confirms Housing Crash! | REI - Hard Money for Real Estate Investors

Passive Income, Active Wealth - Hard Money for Real Estate Investing

Release Date: 07/22/2022

251 Plans & Goals For 2023: Real Estate Investor Show - Hard Money For Real Estate Investors show art 251 Plans & Goals For 2023: Real Estate Investor Show - Hard Money For Real Estate Investors

Passive Income, Active Wealth - Hard Money for Real Estate Investing

Bill Fairman (00:01): Hi, folks. This is the time of the year that you hate. It's called Setting Your Goals for 2023. We're gonna have more about that right after this.   (00:33): Thank you for joining us on the Real Estate Investor channel, hard Money for Real Estate Investors. We are Carolina Capital Management private lenders in the Southeast for real estate professionals. If you have a project you'd like us to take a look at, go to carolina hard money.com and click on the Apply Now tab. If you're a passive investor looking for passive returns, go to the accredited Investor tab. Oh,...

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250 Issues & Anomalies: How To Figure Your Daily Challenges | Hard Money for Real Estate Investors show art 250 Issues & Anomalies: How To Figure Your Daily Challenges | Hard Money for Real Estate Investors

Passive Income, Active Wealth - Hard Money for Real Estate Investing

Bill Fairman (): Greetings, everyone. We are live. Thank you for joining us. Wendy will not be with us today. She is currently at, I don't know, 30,000 feet on, on an airplane. So we're gonna talk about the year end review, even though the year isn't over with yet, but I don't know what much more will transpire between now and the first. So we're gonna, I'm do a, I'm, we're in a review today and we'll get to that right after. It's funny, that graphic we're showing the, the passive income gang. Yeah. With all the money flying. I'm going, that looks kinda active to me. <Laugh>,  ...

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249 Your 2022 In Review! Real Estate Investor Show - Hard Money for Real Estate Investors show art 249 Your 2022 In Review! Real Estate Investor Show - Hard Money for Real Estate Investors

Passive Income, Active Wealth - Hard Money for Real Estate Investing

Your 2022 In Review! Visit our website: Join Bill Fairman, Wendy Sweet, and Jonathan Davis, LIVE! every Thursday at 12 pm ET for the Real Estate Investor Show - Hard Money For Real Estate Investors! As 2022 is nearing its end, the Carolina Capital Management team takes a look back at the relevant real estate events that occurred this year. What have you learned and accomplished this year? What are the preparations you need to look out for in order to survive the ever-unpredictable real estate market? Be up to date, be informed. Be educated. Learn the numbers and data. Discover the best niches...

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248 Today's Market and the Non-QM Loan | REI Show - Hard Money For Real Estate Investors show art 248 Today's Market and the Non-QM Loan | REI Show - Hard Money For Real Estate Investors

Passive Income, Active Wealth - Hard Money for Real Estate Investing

Today's Market and the Non-QM Loan Join the Carolina Capital Management team LIVE every Thursday at 12 pm ET for the Real Estate Investor Show - Hard Money For Real Estate Investors! This week, Bill Fairman, Wendy Sweet, and Jonathan Davis are joined by Bryan Maddex of AmeriFirst Home Mortgage to discuss Non-Qualified Mortgage Loans! With over 20 years in the financial industry, Bryan used his experience and insight to help get financing and loan products for his clients, many of whom are first-time homebuyers and real estate investors. One of his top priorities is providing consistent and...

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247 Market Updates & DSCR Loans | REI Show - Hard Money For Real Estate Investors show art 247 Market Updates & DSCR Loans | REI Show - Hard Money For Real Estate Investors

Passive Income, Active Wealth - Hard Money for Real Estate Investing

Join Bill Fairman, Wendy Sweet, and Jonathan Davis LIVE! every Thursday at 12:00 PM ET for the Real Estate Investor Show - Hard Money For Real Estate Investors! Brett Sims, the Head of Growth of Renovo Financial, joins the Carolina Capital Management team to talk about the current market updates, especially the DSCR loans. Renovo Financial: Their story begins in 2011, at the Starbucks on Sheffield and Armitage in Chicago’s Lincoln Park neighborhood. It’s here where Co-Founders Kevin Werner and Daniel Rosen met to discuss founding a new real estate investment company. But this company would...

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246 - How To Raise Capital | REI Show - Hard Money For Real Estate Investor show art 246 - How To Raise Capital | REI Show - Hard Money For Real Estate Investor

Passive Income, Active Wealth - Hard Money for Real Estate Investing

00:00:01 Greetings, everyone. Welcome to the show. We are going to talk about capital raising and why it's important to your deals right after this.   Wendy Sweet 00:00:34 That's funny. That's like a so funny when you see people on the news doing a news set and they say something and they just wait for stuff to happen and they wait for stuff to happen, it's,   Bill Fairman 00:00:45 Well, just so you guys know, half of our, our crew is in another country, so it's occasionally there.   Wendy Sweet 00:00:52 Two different countries.   Bill Fairman 00:00:53 Yeah. There, there's...

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245 Investing With Family & Friends | REI Show - Hard Money for Real Estate Investors show art 245 Investing With Family & Friends | REI Show - Hard Money for Real Estate Investors

Passive Income, Active Wealth - Hard Money for Real Estate Investing

Bill Fairman 00:00:02 Greetings. It's another week,   Wendy Sweet 00:00:05 Ola.   Bill Fairman 00:00:06 Lovely time in the, in the city. The big, big city of Rock Hill. South's, right? Carolina, Excuse me.   Wendy Sweet 00:00:12 Poor guy.   Bill Fairman 00:00:14 Today we're going to talk about investing with family and friends, and we will get to it right after this. Hello win. Thank you for joining us for another episode of Real Estate Investors Show.   Wendy Sweet 00:00:45 We forgot the name again. That's what happens when you're over   Bill Fairman 00:00:48...

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244 Profitable Small Dollar Lending | REI Show - Hard Money For Real Estate Investors show art 244 Profitable Small Dollar Lending | REI Show - Hard Money For Real Estate Investors

Passive Income, Active Wealth - Hard Money for Real Estate Investing

Bill Fairman 00:00:01 Hi everyone. We're right on time as usual. Sorry about that. Mike. Thanks for hanging around for an extra minute. Our theme this month has been Small dollar lending, raising capital, and investing with family and friends. Yep. And we are going to get in depth with our special guest who's going to give us some insights into her. What is it? What are we talking about today?   Jonathan Davis 00:00:32 Small dollar lending. Lending with smaller amounts.   Bill Fairman 00:00:35 And we'll do that right after this. Hi everyone. Thank you so much for joining us on The...

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243 Hot Topics In Real Estate: Small Dollar Lending, Investing With Family & Friends, Raising Capital show art 243 Hot Topics In Real Estate: Small Dollar Lending, Investing With Family & Friends, Raising Capital

Passive Income, Active Wealth - Hard Money for Real Estate Investing

  Bill Fairman 00:00:02 Greetings. Hope everyone is doing well. We are actually live with this show. Maybe you didn't know this, but last week's was not live. It was prerecorded because we were all out of town. So we're going to talk about several things today, being a small dollar lender, investing with family and friends, and raising capital. And we'll get to some examples right after this. Hi everyone. Welcome to the Real Estate Investors, Show Hard Money for real estate investors. We are Carolina Capital Management. We are lenders in the southeast for real estate professionals. If...

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242 How To Scale Responsibly | Real Estate Investor Show - Hard Money for Real Estate Investors show art 242 How To Scale Responsibly | Real Estate Investor Show - Hard Money for Real Estate Investors

Passive Income, Active Wealth - Hard Money for Real Estate Investing

Bill Fairman 00:00:00 Oh, see that. Hey, welcome back. We are going to talk about scaling responsibly. One of the things that we run into is, should you scale in a coming downturn? Absolutely. You have to scale responsibly. We're gonna talk about that right after this.   Bill Fairman 00:00:37 Welcome. We're back here with our take two or question 2.0 with Hunter Big to elevate capital. We're gonna talk about scaling responsible respons. Sorry guys, I'm actually out of town right now, so I'm a little sluggish. Let's get started off with a little bit of housekeeping. Thank you so much for...

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Bill Fairman

00:00:00

On the other. Hello, welcome. Oh, look, Wendy has shown up out in the west somewhere. Oh,

 

Jonathan Davis

00:00:10

Nice.

 

Bill Fairman

00:00:12

Her campsite. So this is welcome to this week. And as the headlines say, Zillow reports, the sky is falling in well, right after this message.

 

Bill Fairman

00:00:49

So looking for, I love it. It's like, did their algorithm tell them that? Yes. And we always believe what Zillows is. Excuse me. So thank you so much for joining us on the real estate investor show hard money for real estate investors. We are Carolina capital management. We are lenders in the Southeast for real estate professionals. If you have a project that you would like us to take a look at, go to Carolina, hard money.com and click on the applying out tab. If you are a passive investor, looking for passive returns, go to the accredited investor tab. Don't forget to like share subscribe, hit the bell, all that good stuff. And don't forget about Wednesdays with Wendy. Wow. That was quick. Okay. So Wendy books, 30 minutes per person on Wednesdays, there's a link to her calendar. Checking out. She's usually booked a couple of months in advance. Now it's three because she took a month off, sorta on a vacation. As you can see, she's at her, what do you call that? Campsite? This,

 

Wendy Sweet

00:02:01

This is a campsite we're in just outside of Sedona, Arizona in a place called Jerome.

 

Bill Fairman

00:02:08

Oh, I've heard of that.

 

Wendy Sweet

00:02:10

Yeah.

 

Bill Fairman

00:02:12

They not. Have have actual vegetation there and it's not desert. Like

 

Wendy Sweet

00:02:15

It's just a little bit, most of it's, you know, rock and like that kind of thing. I don't know if you can see all that rock, but it's and it's between a hundred to 110. It's not bad.

 

Bill Fairman

00:02:33

My first question is, does the air conditioner work

 

Wendy Sweet

00:02:37

Inside? It does. Yes. It works well. Well,

 

Bill Fairman

00:02:39

I'm assuming inside, well, let me finish this up. We are speaking at quest expo. So let's plug that real quick. Sounds like the music can't catch up with itself. So quest expo, it's a great place to be. If you wanna learn about self-directed IRAs and how to invest it, we have a, a code for discount firm and 30. And how I'm gonna say is you should go. You should go. You should go.

 

Jonathan Davis

00:03:29

Yeah. Any kind of investing, note, investing, buying real estate. What have you, I mean, even if you wanna look, I think they even have crypto and gold

 

Bill Fairman

00:03:39

And oil and gas, oil and gas. Of course it's under attack right now, but still oil and gas. If you wanna be in, you need to be in the energy sector right now. That's the one that's gonna have the most growth either way, whether it's clean renewables or awful fossil fuels that are the most efficient you need to be in energy. Okay. So Wendy, how's your vacation going? Can you hear me?

 

Wendy Sweet

00:04:10

Yeah, you're kind of going in and out for me and I'm sure it's, it's probably my problem. Cause I'm out in the middle of nowhere. I told you.

 

Bill Fairman

00:04:20

Okay. It's

 

Wendy Sweet

00:04:21

It's a connection

 

Bill Fairman

00:04:23

Stare at me. I'll just move on. Okay. Excuse me. So I, I know we did this last week. I, I I've got another person. I don't want, I, I get a lot of questions from our investors, worried about what's happening with the economy. And they keep seeing all these headlines that the sky has fallen in and you know, it, it bothers 'em and I, and I get that, but they need some help understanding what's really going on in the marketplace.

 

Jonathan Davis

00:04:58

Yeah. We need to make sure we understand sensationalism and headlines and yeah. You know, like Zillow, the, you know, the housing market is crashing. That's a headline

 

Bill Fairman

00:05:08

And, and, and don't get me wrong. It's a great way to get eyes on your, on your site. It's we call it click bait. Yeah. Cause you see those headlines, people are gonna click it on automatically. So somehow I ran across this particular video from Darrell minor. He's does a lot of videos on real estate investing real estate in general. And he has a, a course there's his YouTube channel. You can check it out for yourself. And while he's a nice guy, he, he does. If you look at his, what do you call 'em little splash images. It's always, the sky has falling in versus there are a few good points on some of them with some arrows going up, but most of 'em are going down. And, and I get that. He's trying to get eyes on the, on the channel, but I, I wanna help alleviate some folks' fear based on some of the data he's getting from Zillow. Okay. So let's, let's play the first clips Scott,

 

Video Recording

00:06:13

“You waste it in the housing market is continuing, continuing to go down, down and down, but let's jump right into this. It says housing affordability hits 15 year low as prices. Mortgage rates rise May, 2022 market report. We've known that affordability when it comes to the housing situation is getting ridiculous. It's getting ridiculous. It's getting to a point where no one can afford a home because we have interest rates that are ridiculously high. And what is the number? One thing that I always say for every 2% that the interest rate goes up, you lose $200,000 of buying power. Just think of that. Currently you've lost $200,000 or more in buying power based on these interest rates. And no one wants to go down from a $300,000 home to a hundred thousand dollars home. No one wants that mortgage payments are higher than rent and 45 of the 50 largest us metros up from 22 and 2019. What did they just say?”

 

Bill Fairman

00:07:17

All right. So we're gonna unpack a little bit of that. Mortgage rates are not ridiculously high.

 

Jonathan Davis

00:07:24

If anything, they're still ridiculously low. I mean, what's, I think what is it? 7.9 is the historical average of mortgage rates and were at 5.5.

 

Bill Fairman

00:07:35

Yeah. Now when he did this video in may, the rates had climbed up to in the sixes for a short period of time. So I get that, but they they've settled back down a little bit since then, but

 

Jonathan Davis

00:07:49

Now comparatively, are they high from historic lows of 2.8? Yeah, yeah, yeah, yeah. Sure. But I mean you, if we only look at, at the market from a, a three year perspective, yeah. We can, we can lose sight really quickly of what's going on and we can get, you know, believing that we are in historical highs. But if you look back, I mean, anything under 8% is still on average low. Yeah.

 

Bill Fairman

00:08:19

And, and we talked about this before, even if you're at 6% over time, you're, you're paying dollars back that are going down in value versus rents that are continued to go up. If you rent.

 

Jonathan Davis

00:08:34

Yeah. See what he, you know, inflation, if it continues, you're using dollars today's dollars that stay consistent over the 30 year period to pay down.

 

Bill Fairman

00:08:44

Yeah. And the last thing I'm gonna say about this is my interest rate was 14 and a half percent. I know I've said this before, when I bought my first house, that was the FHA going rate. So I would've been really happy at that rate now. Yes. Prices have gone up and we need that to try and lower the appreciation rates. Wendy, you got anything to add?

 

Wendy Sweet

00:09:07

I, if I do, it's probably gonna be choppy. Can you hear me?

 

Bill Fairman

00:09:11

I can hear you fine for now.

 

Jonathan Davis

00:09:12

We just, I mean, we just love the background, stay there. Cause we just love the background.

 

Wendy Sweet

00:09:16

Listen, I'd love to stay here. It's pretty awesome. I, I agree. I think that this guy's just way over the top with him talking about the mortgage rates being so high, cuz it really is. It's like 7.81 since 1971 has been our, our average and that's pretty, that's pretty incredible. And it's way lower than inflation, right?

 

Bill Fairman

00:09:45

Yeah. Yeah. Currently.

 

Jonathan Davis

00:09:47

Well, and also, so what, what do you all think about? He said he, I think he said, I always say this for every 2% interest rates rise, you lose $200,000 of buying power. Do you think that's true? Or

 

Bill Fairman

01:10:04

I don't know. I'd have to calculate it.

 

Jonathan Davis

01:10:06

I, so

 

Wendy Sweet

01:10:07

I think that's too.

 

Jonathan Davis

01:10:08

I think that's too simple of

 

Bill Fairman

01:10:10

If, if it's 2% on this one and then another 2% on top of the 2%, then it went up now it's 4% higher. So

 

Jonathan Davis

01:10:18

Well, so I, I think it's, that's too simplistic of a, of a, an explanation. I mean you have

 

Wendy Sweet

01:10:25

Yeah.

 

Jonathan Davis

01:10:26

Appreciation. So if, if, if interest rates go up 2% at the same time that you have appreciation at 20% on a house in a year that I think that statement might be true if you have, if you, if rates go up 2% and appreciation on homes are back at their average of, you know, one to 3%, I don't think that's true.

 

Bill Fairman

01:10:50

Well, he's probably talking about a, a snapshot in time and that that's probably credible. All right, Scott, let's go to the next

 

Jonathan Davis

01:11:00

One. Scott says we rates artificially low. Yes. 

 

Bill Fairman

Yes.

 

Video Recording

01:11:08

“Appreciation is finally starting to slow easing slightly from 20.9% annual growth in April to 20.7% in may. Yes. And why is that going to happen? Because we are inching closer and closer to a recession. And what you don't want is you don't wanna be left with the hot potato in your hand, ah, with a house that you overpaid for, with the high interest rate that is now worth less than what you bought it for. Hmm. So how does that look? You buy a house for 350,000. The recession hits and you overpaid 50,000 for, so it was really worth 300, but now it's only worth two 50. So now you're a hundred thousand dollars under now. We don't know inventory continues to recover from February lows, but it's still 50% below 2019 levels. Well, I expect that. But remember when everyone was saying inventory is so low, the housing market's gonna go 20, 30, 40%. Like it did year over year, over year, over year for the next five years, those people are crazy. There's no way that the housing market keep continued to go up that fast at that continued rate inventory is going to slow because people are”

 

Bill Fairman

01:12:27

All right. So let's unpack a couple of this, these statements. I love this man. Have you noticed how he, he was concerned that the appreciation rate was dropping from 20.9% all the way down to 20.7?

 

Wendy Sweet

01:12:44

Woo.

 

Bill Fairman

01:12:47

Again, our, the average appreciation.

 

Jonathan Davis

01:12:51

So

 

Bill Fairman

01:12:51

He over property since the fifties has been like three and a half percent.

 

Jonathan Davis

01:12:54

Yeah. So I need, I, I didn't watch these videos. I had no clue that he was, but so I, I nailed it 2% with 20% of

 

Bill Fairman

01:13:01

Yeah, pretty much. Okay. Another thing was owning a home in a recession. It's gonna drop $50,000 or it's gonna drop in value at all. Scott put up that price draft for me. All right. So here's the us price index since 1900, the year 1900. If you look at this graph, you see one place in the entire history. Well maybe two or

 

Jonathan Davis

01:13:33

Yeah, but a very major, major one

 

Bill Fairman

01:13:35

Major in 1990, but there's basically only one place where historically dropped a punch. And that was, you know, the crash in 2008, which was caused by housing. This recession has nothing to do with housing. This recession has to do with policy and energy costs being too high, which is also caused by policy. Of course, some of it has to do with the pandemic. I'm gonna give him credit for that. And the what do you call it? The supply chain issues. Yeah. This is not a housing recession that is going to be coming up. And the, the fed really has no tools in their toolbox other than to raises rates. But this is not a housing recession. Your house is not gonna go down in value. It may be harder to afford a house. I agree. Yeah. Because everything else is costs more too. I, I don't argue with any of that stuff, but you're not gonna buy a house now and expect to have it go down in value. What do you guys think?

 

Jonathan Davis

01:14:39

No, I mean, so there is yeah, one occurrence in 120 years of, of data where, where values went down, even close to $50,000, like his example one time. And like you said, it was due to what we had the subprime market. I mean, we had, you know, we had tranches of securitizations that were falsified or a lot of data. I mean, it was, it was a housing crisis. Yeah. This is not, I don't think that, I mean, will your home lose value? No. Will it, will it not be worth as much as fast as it has? Yeah. I mean, appreciation has to slow down and inventory is picking up for housing, which will hopefully help bring that, bring that down. Interest rates rising will help bring that down. But to, to say that we're gonna lose value at this point. I, I don't subscribe to that. I don't see any data that would point to that, to that result,

 

Bill Fairman

01:15:47

Wendy.

 

Wendy Sweet

01:15:48

Yeah. The thing, the thing that's gonna hurt people is the cost of everything else. That's, that's, what's fallen from the sky is right. The cost of everything else. You know, traveling out west, we've had to fill my car up at least twice a day at $125 a pop. Wow. Well

 

Bill Fairman

01:16:11

That it costs a lot of money to tow your house around with you.

 

Wendy Sweet

01:16:14

The, the large, that would be getting eight to nine miles a gallon per gallon. But the, the cost of gas that I've seen coming across the country, the lowest I saw, it was 3 86. Believe it or not. And I've seen it over $5 a gallon. So it's been it's those things that are gonna put the serious dent in everybody's wallets, everything else, food, everything.

 

Jonathan Davis

01:16:41

Yeah. I mean, we, we said this before, I mean, goods and services and commodities like that, like they, they have to come down and value long before your house ever would. I mean, people, people are still like, I'll give you an example. My LLC bought a, bought a vehicle to buy that vehicle. It had to pay a premium over MSRP because you can't get vehicles right now. And they just increas the premium that they're charging for those vehicles over the MSRP. I think it's now like $10,000 over MSRP. Yeah. So those things have to stop occurring long before housing value will ever get touched because people will not buy cars or new cars long before they'll they'll ever say, I don't need a house.

 

Bill Fairman

01:17:35

Right. People always need place to leave no matter what. Yeah. Okay. Let's move on to the next one. There Scott,

 

Video Recording

01:17:42

“Go up guys. Incomes are lagging further behind fast rising mortgage costs leading to the most significant and affordable challenges. In the past 15 years, the latest affordability data available from April show's monthly payments taking about 28% of homeowner's monthly income dangerously close to the 30% threshold beyond which is considered a cost burden. Now we know that guys like we know that we, I did a video on that, where I talked about how close we're getting to individuals, getting to that burden cost. That point where we were in 2008, when people just gave up homes, we're 2% close to that number, guys that should scare you guys and know that something is coming around the corner. You see all of these red flags. There is no way that we're coming around the corner and you see 30,000 flags that are all red and they're all in the bucket of housing market. And you still don't think that there's gonna be a recession. Make it make sense. Although rents have soar since the start of 2021, the rapidly rising cost of a mortgage still make rent, a cheaper option. A typically monthly rent in the United States, basically $2,000. Monthly rents are up 15.9%. The pace of annual rent grows slowed for the third consecutive month. Whoa. Look at that. It's slow. Look at that. It's going down.”

 

Bill Fairman

01:19:07

Okay.

 

Bill Fairman

01:19:13

On that one. Okay. There's three things. Bill wants to talk about that one. Okay. Number one, he mentions. Damn I've already forgotten it. All right. So I'll go to number two. Wage Scott, pull up that wage graph I put on here. He is correct. Wages are not keeping up with inflation, but wages are not stagnant. Here's a graph right up through December 20, 21. Do you see any wages going down? No, they're all going up and they're actually going up more than the trend line. So they're actually going up higher than they had been previously. That little dotted line is the trend line from 2019. So they actually increased quite a bit in 2021. Same thing with 2022. I'm assuming, but I can't get the data, but they're still not keeping up with inflation. All right. You can drop that if you like Scott. Yeah. The here's the hyperbole.

 

Bill Fairman

02:20:18

What do what you, he's talking about with getting up to that 30% of housing costs. This is for new buyers. This is not for people that are already in their houses. There's not gonna be a housing crash for people that currently own their house with the ridiculously low rates that we have. These are people that haven't bought the house yet. This is why it's not affordable. And I get it. There are gonna be people that can't afford houses, but that happens in every market cycle. There's people that are new, new home buyers in that range, they can't afford it. They're gonna have to get their debt down in order to do it. And E even if their debt is complete, their debt free and their housing costs are still at 30% of their total income. They're not gonna qualify for a house unless they borrow less money, put more money down, borrow less money, or find a less expensive home. All that said again, this guy is not falling in.

 

Jonathan Davis

02:21:20

Yeah, no. I mean, I think did he, did he say that rents are higher than the average

 

Bill Fairman

02:21:28

Mortgage? Oh yes. In a lot of these cities,

 

Jonathan Davis

02:21:30

That's not true.

 

Bill Fairman

02:21:31

Rent rent is higher. And then look all, let's talk about that. Well, if your mortgage is stagnant, but they're still higher than rents, do you think rents are going to go up or down over time?

 

Jonathan Davis

02:21:43

Correct. They're gonna go up, but maybe I'm wrong here, but I'm pretty, I'm pulling from, from my, my brain here from something I read before, but I thought the average mortgage was $1,800. I don't in the United States. Yeah. I

 

Bill Fairman

02:21:58

Don't know where he

 

Jonathan Davis

02:21:59

Got. I'll have to go look that up because if he's saying the average rent is 1927, then the average mortgage is not over $2,000. Now, like the average mortgage in the Northeast probably is if you wanna break it down to regions. But I think if we wash it all together, that's that, I don't think that's a true statement, but let me, let me research that and we'll get back.

 

Bill Fairman

02:22:22

But yeah, if you're telling people that rents are, it's better to rent because mortgage payments are too high. That's only temporary. If you still buy a house and your mortgage payment is slightly higher than the average rent for that area, eventually the rent is gonna be higher than the mortgage payment cuz the mortgage payment is fixed. Correct. All right, Wendy.

 

Jonathan Davis

02:22:45

Yeah.

 

Bill Fairman

02:22:46

All right. So she's just nodding.

 

Jonathan Davis

02:22:49

Yeah, but I mean, so rents have risen very quickly over a short period of time due to a lot of factors that we've already discussed, will they continue to rise at that rate? No, they, they will not. I mean, I think there's a lot of people and, and I'm, I'm one of 'em they've kind of hit their peak for a little while. I don't think we're going to see, you know, 10 and 15% rent and growth. Sure. Over the next few years, I mean, I don't think that's gonna happen. I think it's gonna be way, way smaller. Sure.

 

Bill Fairman

02:23:21

And rents don't have to go up quickly, but they will. If you're a smart landlord, you're gonna make sure that your good tenants can stay into place. Yeah. And as inflation continues to go up, I mean, there's, there's some costs that can be passed through. There's some costs that can't be. So you may have to have a little bit less of a margin, but the same holds true the value of your property as the landlord is going up and hopefully you've got your loans locked in. Now it depends. If it's a commercial loan and you have to refinance after a certain period of time, then you're kind of outta luck there. But yeah, people don't wanna evict folks unless they're tearing the place up or not paying. Yeah.

 

Jonathan Davis

02:24:09

You know, I, I saw an interesting, some data on a graph. I think it's a couple days ago it was showing the trend line between wage growth and housing, you know, value, growth. Right. So from 19, I think it went back to 1980, from 1980 up until 2000 and oh Lord, what was it? It was like 2018, 19. They were pretty consistent. It's only after 2019. The, you know, when we have the pandemic, everything where you see it actually separate where housing values are rising at a much higher trend than, than wages. So it's a very new phenomenon. And what we know about new phenomenons is we don't know. Right. Is it gonna be a trend that continues probably not.

 

Bill Fairman

02:25:05

Well, this is part of market forces correcting themselves. Yeah. And this is something that's ne needed. So I'm gonna summarize today what we're talking about. Don't, don't pay attention to the headlines. They're generally it's noise. You need to get into the meat of the data. We need a slowdown in the market. We have to, because what has been going on is unsustainable. We need to have at least six months worth of inventory. And I think through most of the country, we're still working on one to two months worth of inventory. And that's why the prices went up so high. They will eventually come back down and we

 

Jonathan Davis

02:25:45

Don't. They already are. Yeah. We we're already seeing soft. Like we're seeing softening in price points that you don't even, we, we didn't, I didn't even expect we're seeing softening in under two 50 price points. Right. Like I didn't expect that. Well,

 

Bill Fairman

02:26:00

That that's a little unusual. Yeah. But key is getting, I got something for you. What about the last word? This is for Wendy. Did you see

 

Wendy Sweet

02:26:20

The graph? Let let's hope it. Yeah. That's really cool. Let's hope it comes across so you can, can you hear me?

 

Bill Fairman

02:26:27

Yes, I can.

 

Wendy Sweet

02:26:28

Okay. So shoot. I forgot what I was gonna say now. It was really good. The

 

Bill Fairman

02:26:35

Graphics blew your mind.

 

Wendy Sweet

02:26:39

No, we did a, a special show last week on sunrises, where we were talking about the days on market and the number of houses available. And we still only have a little over one month supply in the Charlotte area, which is really low. And somebody was on there from Virginia saying the same thing that their supply is the same. It's it's still at one month where it should be six, six is normal.

 

Jonathan Davis

02:27:08

Yeah,

 

Wendy Sweet

02:27:09

That's it. And

 

Bill Fairman

02:27:09

This is why the trend line that Jonathan was talking about has kind of veered off where the affordability based on income is off, off the track because there was not enough inventory. People were buying stuff up. We have to get it normalized in order to sustain this. And, and the market will fix itself. Eventually. Is there gonna be a little bit of slow nests in the market? Is there gonna be a little bit of pain for a first time home buyers? Absolutely. So, but just hang in there. It's not a market crash. This guy is not falling in. I'm not wearing a helmet.

 

Jonathan Davis

02:27:47

Well, and I, I just wanna say it's, you know, it's something that I tell my, my nine year old daughter, some, you know, when she wants me to give her an answer, instead of her thinking through it, if, if you want someone else to think for you and give you the answer, they always will. They always will. But what we need to do as savvy, I is not get our information from one source, get our information from multiple sources and use people, industry professionals, or friends or whatever, multiple sounding boards and you know, and pull that information through funnel so that we can pull out the important pieces because yeah, you can watch of a YouTube video and think, well, my house is worth a hundred thousand dollars less than it was two months ago. I'm screwed. That's no, no. Look in, you know, find multiple sources and think through these things and align yourself with people like Wendy or bill, you know, to, to sound, you know, to use as a sounding board, Wednesday with Wendy's with Wendy is a great tool. She is a great sounding board for anything to do with real estate. So utilize those.

 

Bill Fairman

02:29:07

Absolutely. All right. Well, we're running overtime. Thank you guys for so much for joining us. We are the real estate and investor show hard money for real estate investors. We are Carolina capital management. If I can remember our name,

 

Jonathan Davis

02:29:22

They put it there on the screen.

 

Bill Fairman

02:29:24

We are lenders in the Southeast for real estate professionals. If you have a project you'd like us to look at, go to Carolina, hard money.com. Click on the apply. Now tab, if you are a passive investor, looking for passive returns, click on the accredited investor tab. Don't forget to share like subscribe hit the bell. And don't forget about Wednesdays with Wendy. We will see you guys next week. Hope you enjoy your vacation, Wendy. She.