Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.
So if our agenda for you is to do real estate, it’s because we know what it represents for you and for your future. And just be aware of where you’re getting your information and what the media is saying and realize everybody has an agenda. Your agenda should be your personal economic independence.
What would your life look like if you could replace all of your working income? With simple and conservative investments that could do it for you. Over the last 13 years, we’ve helped thousands of clients transact over half a billion dollars in simple and conservative real estate transactions, allowing them to begin replacing their work income with real estate investment income.
Each week, we’ll be pulling back the curtain on the ins and outs of real time retirement based real estate transac. That will transform your financial future even if you have no real estate experience. This is replace your Income with me, Kevin Clayson and Steve Earl. Roll. All right, well, hello everybody and welcome to Replace Your Income with Kevin.
Uh, Steve. How’s it going, Kevin? What’s up man? Going well. Hey, you know what, um, I was thinking. We should talk today about like a market update, right? Because I think we we’re getting questions all the time, like what’s the state of the market? And I think let’s talk a little bit about it. If you’re cool with that.
I thought we should just turn the mics on. Let’s have a conversation about what’s going on on the market. What are we seeing? What are our clients seeing? Are people waiting on the sidelines? Should they be jumping in? What are we seeing? Uh, you know, from an economic standpoint, let’s just do like a market update and get everybody up to speed.
What do you think? Yeah, let’s. So first things first, I think we need to tell everybody that there are two yes, count ’em two websites that you’re gonna want to visit right now. So, stop what you’re doing. Uh, there’s two websites that we wanna give you that you’re gonna want to check out. One is d f y, like dog, frank yellow, d f y, dash web, benard, that’s w e B as in boy.
N a r webinar.com. Now, if you go to dfy-webinar.com, here’s why I want you to go, you’re gonna be immediately taken to a registration page for our next market update, uh, monthly market update webinar. This is something that we’re starting this month and we’re super excited about, and we want to keep it going month after month, where every month we are inviting one of our market.
To come on and we’ll do a live webinar where you, you can always listen to the replay. We’ll repurpose it on YouTube. We will probably even turn the audio into a podcast right here on the Replace Your Income Podcast. But if you come live, that means you get to ask questions and you get to get real time live answers.
From the teams in the market or from us. So go to dfy-webinar.com, register for the next webinar that’s coming up. Um, I’m not gonna say what the date is cuz some of you that are listening to this podcast in a time capsule 35 years from now, it’s gonna be awkward. So I’m just gonna say go to dfy-webinar.com and register for the next one.
And we are gonna start to do these on a, on a pretty regular basis where we’ve got, especially with some of the stuff that we’ve got coming in the. We’re gonna be opening multiple markets across the country. We’re gonna have plenty of teams that could come and give us feedback on what’s going on. So go to dfy-webinar.com.
The other one, and this is super critical to what the we’re gonna talk about here today from a market update standpoint, is I want you to go to daily fastball.com. Now daily fastball.com. If you don’t know, is something that we just launched fairly recently. It’s only been a couple weeks where we right now, kind of the current state.
Is we get properties, analysis performers, we get properties that are coming in that are purchasable, that are not being purchased yet for some of the reasons that we’re gonna talk about here today. And they are available. And you could put an offer on ’em and you can get them. You still would have to get pre-approved and you still wanna work with your account executive.
But we are sending a deal up at least four times a week, most weeks, five times a week. And every day you’re gonna see a different deal from a different market. They range in price, but you’ll see the cash flow. Are kind of back to where they were, even given the current state of interest rates. And you’re gonna see what purchase prices are, you’re gonna see what the homes are looking like.
You’re gonna see what projected profits are. You’re gonna see what the 10 year projected profit is. You’re gonna see every single year for the next 10 years how that property is likely going to perform. And if you go to daily fastball.com, you can enter your name and email and phone number and you get a daily text or a almost daily text of a deal, you can go check it out, you can look at it and kind of get a fill for what’s going on in the market.
And we’ve already, Steve, we’ve. Seen people watching that list and seeing those listings daily go, oh man, this is better than I thought it was. Let me actually jump in and, and take some action because it’s not as bad as I thought. And that’s what we wanna talk about. Steve. How bad is it out there? What’s going on?
Um, you guys know that we’re always big fans, that you should always be buying real estate. Uh, so, but we also don’t wanna just blow smoke and say everything’s perfect and amazing. So there is some things going on in the market right now that we want to talk about. Let you know kind of what are we. You know, potential recession or recession, what are we seeing with interest rates?
What are we seeing with prices and cash flows and, and just overall economic big picture, what are we seeing, Kevin? I think overall, so this would be the, probably the general statement that I would make, and that is, The dust is beginning to settle. Interest rates are settling down, meaning, you know, they were super low for, for a couple of years, and then they kind of started going up dramatically, like in months went up, you know, full percentage points to, to where we’d gone from, you know.
In the threes and fours to all the way up into the sevens. And, and now they’ve kind of come, come back down and they’ve, they’ve been settling down and we’ve been finding that, uh, our clients have been able to lock in rates in the mid sixes, the low sixes, and even in the fives in, in some instances. And so, and then that’s without any, you know, rape, buy downs and that kind of a thing.
Now you, you know, with a rate buy down, you can get even a, an even lower interest rate, which we’ve had a conversation about that in prior podcasts. Sometimes it can make a lot of sense to buy your interest rate down. You can take a look at the return on that, you know, uh, investment to buy your rate down.
But interest rates have been settling down, which is really nice. The other thing that have set that has settled down, which is really nice, Kevin, is that. Price increases, right? The price points of homes have riddled really settled down. In some cases across the country. There have been some dramatic price reductions in most of the markets.
Where we are at. Prices have just kind of settled down to where, you know, people aren’t, um, Having to make offers above asking price, right? It’s we’re we’ve been able to get closer to asking price, and in some instances, in a typical regular market, the typical thing is to offer a little, a little bit less than, than the asking price.
And in some instances we’ve even been able to do that and to get some deals accepted. And so it, the market is definitely normalizing. And at the end of the day, like that is a good thing. Yes. What we were experiencing was not sustainable, and it’s whether the market is like screaming upward or it’s, it’s dropping like a, like a tank that’s not sustainable either.
And so we’re at this place in the market where things have, have kind of, uh, gone to a fairly stable scenario and to where. Now you, you can kind of predict what to expect as opposed to this, like this crazy anomaly that’s going on. So, so that’s been a very good, a nice thing that, that our clients have been experiencing.
Yeah. You know, uh, I listen to a lot of sports podcasts and, and, uh, the sports people always wanna. Have comps, right? They want comparables of like this rookie who’s getting drafted. What’s his comp? Well, he’s like this quarterback or like this basketball player. If you guys want a comp. This, I don’t know what your feedback is on this, Steve, but I, if you wanted a comp on the current market, I would say the comp is like 2014 to 2018.
So when, when we saw the massive crash, like oh 8, 0 9 into 2010, prices went way. Right. They, there was a massive correction. Prices went way low, but interest rates then are pretty much what they are now. Right. But you were buying at, at significantly below market value. I mean, we were buying properties at well below replacement costs just from an insurance standpoint because the market had this massive overcorrection because of all the lending malarkey.
Um, I’m using Joe Biden words now. Malarkey. Um, , it, it totally shifted. Right. Uh, and, and so people were buying, but the price was. Well, as the prices started to come back, interest rates were not low and they were not high. They were kind of in this range. Cash flows were not through the roof, but they als They also weren’t negative cash flows and, and appreciation was like a normal appreciation.
It wasn’t like, you know, Collapsing or screaming through the roof or whatever, then you move into, you know, maybe you even take that up through, you know, parts of 2019, but then you shift into 2020 and that’s when everything goes bananas. Right now it’s covid, and at first everybody’s freaking out. Lending changes, uh, everything up all.
Then all of a sudden interest rates go slamming down bottom base. Bar bargain prices. But you’ve got this crazy appreciation, right? So, and that w what a crazy environment, right? Crazy low interest rates. Massive appreciation, right? Appreciation. Largely inflated and driven by the fact that there was low interest rates, which meant there was more people entering the market, which meant demand went up.
But supply was low because C O V D had us in. Situation where people couldn’t get homes and people couldn’t get supplies, and there was a shortage of labor and all of this insanity. So the economy is struggling. Jobs come to a screeching halt, but people still need a place to live. It was this weird environment.
So you had these low interest rates and this massive appreciation. Well, we’ve been wondering for months now, right? Since we kind of came outta Covid mask mandates have largely been repealed. We were kind of like, okay, well what’s going on? Well, here’s. Scene, right? Interest rates were still staying low, and then appreciation was still going crazy.
Then all of a sudden, there was all of this news and we’re realizing, holy cow, there’s all this inflation, and the federal government has just decided to print all of the money for all of the people everywhere, and then as a result, everything’s costing more. And now I’m paying $5 for a gallon of milk instead of $2 for a gallon of milk, and it’s hard to get beef and whatever, right?
We had this weird economy. And now what we’re seeing is the job situation is actually decent. Right? Jobs have been increasing. Uh, that which has been good. Prices have been normalizing. Right? They’re still appreciating, right, Steve? But they’re not going through the roof. It’s not, my home was worth 300,000 last month and this month it’s 600,000.
We’re not. Seeing that and with interest rates, we’re seeing lenders still want 25% down, not 20% down, but we’re seeing, you know, between that five and a half and six and a half percent fluctuation, it literally fluctuates daily. Right. It l the interest rates are literally fluctuating daily, but now we’re seeing, okay, well we kind of know interest rates have found a home appreciation has kind of found a home.
The dust is settling, it is normalizing, and that to me says, Well now, but here’s this other aspect that I want you to talk to Steve. The dust is settling, but what has happened with demand? Well, so that’s an interesting question, Kevin, and and I would answer it with. The inventory scenario, the low levels of inventory that has not changed, there is still low amounts of inventory, less homes than are needed exactly now, which means there’s still massive demand.
But here’s what’s going on, is that the demand is pent up. People have been waiting. They’re waiting to see what interest rates are gonna do. They’re waiting to see what prices are gonna do. They’re waiting to see what inflation is gonna do. They’re waiting to see what the economy is gonna do, whether we are going to fall into a deep recession or a depression.
And so as the dust is settling and people are beginning to see some normalcy, and as they’re beginning to understand that, hey, the sky actually isn’t completely falling here, life continues. My job continue. I’m still able to eat and feed my family. Like things are more expensive than it was, but we’re still doing it.
people are, are still finding a way and they’re moving forward that now there’s all this pent up demand and what we’re seeing. If you’re, if you’re looking at some of the data that’s coming out, Is refinances have even ticked up because of the, the lowering interest rates and the number of purchases has been, uh, slowly increasing.
And so that’s what I would continue to expect, Kevin, is that this pent up demand is gonna begin to break loose. I don’t think we’re gonna see pandemic level type demand where, you know, 15 people are vying for one property, um, or making offers on one property or 50 or whatever, you know, the case. But we’re gonna see increasing demand over time as people get more and more comfortable with what’s going on and more willing to take that jump into a property.
Yeah. I kind of feel like it’s, it’s like a, it’s like a pent up demand paradox, right? It’s kind of like this weird situation where it’s like, okay, so I know I need to buy and there’s, there’s not enough home, so there’s demand, but I’m kind of waiting because I don’t really know what’s gonna happen. So I, there’s demand, but it’s pent up.
It’s go, it’s kind of like I, I feel. Uh, like if you ever had a pair of running shoes, Steve and you. Pounded these things, right? And you’re starting to see some holes and the soul’s not great, but like you maybe know like there’s a sale coming up soon and so you just keep like running on the shoes and you’re like, I’m not gonna buy yet.
And then you just kind of wait and you’re like, the shoes are still good enough. But I think what if there’s a sale? I don’t know. There might be a sale coming up and so I kind of wanna wait to buy cause I don’t have to buy, but I kind of need to buy. I feel like that’s kind of what’s going on, right? It’s like.
I kind of need to buy, but I don’t know if I wanna buy, and I’m not sure if there’s gonna be a sale or not. Well, here’s what we’re here to tell you is what we are seeing is, I don’t know if everything’s gonna go, like people have been wondering like, is it gonna be a massive, is, is the economy, is real estate gonna go on sale and it’s just gonna, you know, Prices are gonna go crashing.
We do not see any data that indicates that will be the case. Now, we have seen a few more homes start to come through, and if you sign up for the daily firstname.lastname@example.org, you’ll be able to see. Sometimes we’re finding homes again under $250,000. They’re still homes that are around the $300,000 mark.
I would say the vast majority of. Seen and what our clients are actively purchasing day in and day out. It’s right around that $250,000 mark. But for a while we were feeling like that $250,000 mark was like almost not low into the spectrum, but, but certainly on the lower side of the spectrum right now, that isn’t the fact that homes are seen like dramatic price reductions as much as it is just this normalizing, right, the high prices and being able to ask for high prices and the kind of artificial inflation.
Of prices is not sustainable. And it was not necessarily a true indicator, I think, of property value, although real indicator of property value is what somebody’s willing to pay for it. So you can make that argument, but it’s kind of this pen up demand paradox where it’s like, we know there’s demand, there’s still a limited supply, but people are kind of fearful, but they’re kind of waiting.
But they might still go by. And I think what we’re gonna see, this is just, this is pure, like I don’t have a crystal ball, but if I did, I think this is what I would see is that. In the very near future, people are gonna start to go, okay, interest rates are not going back down. Prices are not going crazy.
I’ve been sitting on the sidelines for months, but now I’m realizing if I’m gonna buy, I better just get, I better go buy because, and then if all a bunch of people start to do that again and everybody starts to reenter the market, who. The market, it is gonna have a little bit of upward pressure on pricing, but again, we don’t anticipate that it’s gonna go like through the roof.
But I would still say that every day that you don’t take action is the day that you are missing out on potential cash flow and potential appreciation. Understanding that pent up demand paradox and what is likely going to be happening in the near future. Well, I think you kind of just described the typical D f Y client who has been with us for a while, who have bought, you know, one or more properties where it’s been really interesting to.
Them really see and understand and have that confidence, right? They’ve already been the market. They’ve already, they’ve been buying and so they, they, I think that they get it maybe a little bit better than others who haven’t quite jumped in. And so it’s been pretty fun, pretty interesting to see, um, our clients continue to take steps forward and to put homes under a contract and, and to close ’em and get ’em rented and, and continue to move forward and to just execute on their plan and them seeing, being able to see like the bigger picture, not get this tunnel vision of like what things are doing in this exact moment.
Understanding that real estate is real estate and it does what it does and it has such a. History of what you can expect over time that, uh, they’ve been able to, to continue mo moving forward with, you know, a fair degree of confidence. And, and it’s been fun to see even just in the last few weeks, uh, the greater number of people who have jumped in and, and called their account executive and are taken those steps to move forward and, uh, and get set up in, in a market moving forward, looking for that next property.
Well, it’s funny, you know, we, we had this massive email campaign right after Christmas that was like the 12 days of Christmas where we were making an announce. About, you know, kind of property management moving forward. By the way, the next podcast episode, we’re gonna dive deep into that kind of situation and what led to that.
Um, but James, who, uh, along with me, welcomes a lot of new clients into the company. We’ve been getting emails from people that have been sitting on the sidelines for months, and they’re just going, okay, all right, I think I’m ready to go. Right? And we’re getting, I get feedback every day from people on the daily fastball who are like, Hey, I’m loving.
I’m gonna keep watching. You know, some people are like, all right, I’ve seen enough. I’m ready to move forward. And so I think that the, the idea here is get your finger on the pulse of the market. You could do that by going to daily fastball.com and by signing up for the webinar that we’re gonna start to do every month by going to d f y-webinar.com.
But I think that what is important here, Is to not lose sight for any of us of the bigger picture. Right. Uh, I had an experience this morning that, that made me think a little bit about this. So I, uh, my, we, we have my daughter keep her cell phone upstairs. It doesn’t go in her room. She is the only occupant of the basement.
It’s, she’s got a great concrete slab. Uh, we throw bread crust down there. She does awesome. Right? Just kidding. No, she has a beautiful room. It’s the largest bedroom maybe in the. And it’s in the basement. And so, uh, we don’t let her take her phone downstairs. Right. We keep it plugged in at night upstairs.
Part of that is so that I can just, you know, uh, creep her phone and see what she’s saying to her friends. But I, you know, my daughter, she is almost 14 and she’s an amazing human, but she is very teen. We, at our house, we call it Teenagery. She’s very teenagey sometimes, right? Sort of sassy, sort of back talks, sort of like testing her boundaries.
And there’s times that my wife and I look at each other. What kind of a monster did we create? How did this happen? Right? And and sometimes in those moments when my daughter maybe isn’t acting all the way the way that we want, we get a little frustrated, right? And we lose sight of the bigger picture. And then something happens like what happened today?
That’s the bigger picture. Her phone’s upstairs, it buzzed or something. Her, my kids don’t have school today. So, uh, her, her, uh, alarm went off to remind her to go to the bus. And so I go to her phone and I turn off her alarm and I see her wallpaper on her phone. And it is this picture of Jesus Christ, this painting, hugging a little girl.
And I don’t know, you guys not getting emotional, but I just had that thought like, If that, my teenage daughter who goes to school every day with, dude, the world is nuts. The way kids think, the way kids talk, like it’s bananas, what kids are exposed to. And in the midst of all that, if my daughter has a picture on her phone of Jesus Christ, I, I thought big picture.
We’re okay. And I hope that continues, but it was just like, you know, I really, I thought about that, like how often do we lose sight of what the bigger picture is? And I think from a real estate standpoint, Steve, we do it all the time because when we’re looking at deals, And I don’t mean you and I necessarily, I think we keep big picture in mind, but I think as individual investors, you know, I’ve mentioned this on the podcast before too, going back to our shoe analogy, I used to sell shoes and, and man, if you came in and you wanted a pair of shoes and I.
Find out, you know, what your heel strike looked like and how you’re wearing your shoes. And I’d maybe look at the way you walk and run and then what your price range is. And I could give you all the options and say, try these on. I could help you find the perfect running shoe. But then when it came to me finding a running shoe for me, I’d be like, I don’t know what to do.
Right. And I think this. Sometimes we can look at the world and be an expert, right? We’re like an armchair quarterback. But then when it comes down to us throwing the pass, we’re like, I’m not sure what my, what my read is and what my checkdown is and where I should throw. And I think from a real estate standpoint, it’s very similar.
If we can. Focus on the big picture, but then understand if we move things to a more granular day by day situation, that we may want to be reactionary to the market. We may want to be reactionary by not moving forward or by not buying, but if we can look at the big picture and go, okay, where were we?
Where are we? Where do we think we’re headed? And if I look at the big picture, does it really matter what’s coming down the line? What matters is, Property. I get up to 10 properties and I hang on to them for a while so that I can gain all the benefit from real estate. And you and I have said this multiple times, I don’t know if we’ve ever had a client in the near 15 years that we’ve done this that’s ever looked back at their property and said, man, I wish I would’ve waited.
Three more months to buy that property, or man, I’m the probably, if anything, they’re like, man, I wish I would’ve bought that property three months earlier. Right? But I don’t think anybody goes, man, I wish I would’ve waited to get that property. It’s really rare, right? Maybe there’s a rare occurrence where if market prices slam down in a month, they’re like, dang it, I missed out on that opportunity.
But generally speaking, after a 10 or 15 year timeframe of owning a property, when you go and look back, you won’t really care what the purchase price. Or maybe even what the interest rate was initially because you’ve used that property over this long-term big plan perspective to where it has generated significant revenue for you.
And I think that that’s kind of the message is like the market’s gonna do what the market’s gonna do, right? The market’s gonna market. Like that’s the economy’s gonna economy, right? It’s, it’s gonna do what it’s gonna do. It’s up to us to take action for us, as opposed to just kind of continuing to wait on the sideline and deal with this kind of pent up demand paradox and where we’re gonna land with it.
Anything you wanna add to that? No, I think that’s very well said, and that’s a good synopsis, good summary of where we’re at in the markets right now. Now understand that a lot of what you hear, you know, in the news media is still, you know, doom and gloom chicken. Yeah, and it’s because like they’re looking at like the overall market, like everything combined including, you know, markets on, on the west and the east coast and, and some of the different markets where there has been significant massive price reductions and so on.
But we are speaking specifically to the markets where we have hand put, picked, the areas, even the zip codes where we’re buying for the reasons that we’ve discussed here over, over the, the past couple of years. And so our take, our general take. Is that the market has settled down, it’s pretty much where it’s gonna be for the next, uh, for the, for the foreseeable future.
And, uh, all data, you know, indicates that uh, this is a fantastic time to be jumping in and continuing the process of building your 10 property portfolio and working towards that economic independence. And, you know, I would just say, I was just looking at some headlines. If you wonder, uh, we, we have a little term that we’d like to throw around.
Um, uh, we like to call kind of the, the real estate armchair quarterbacks a tiny pocket brigade, right? Because they’re not bigger pockets folks. They’re like, yeah, I’m just gonna, I’m gonna tell you what you should do because I’m too scared to do anything myself. And if you look at the media, A lot of ’em fall into a very similar category.
Okay. They are quarterbacking based on what will get them clicks and reads, not what’s right for you. If you were to ask, uh, the authors of so many of these articles, how many individual, single family properties they own, uh, my guess is it would be none. Yeah. None. Right, exactly. Will I own my own home?
Right. And, and so this is the key. And understand, just from a marketing standpoint, right. The news programs are going to give you the headlines that will drive fear, and the headlines that you see on your Google feed or on your Facebook feed will drive fear. And here’s the reason why. There’s two headlines side by side, and one says, what top economists think the economy’s going to do and what the downturn will look like, right?
Versus investors feel good about the future, right? Like, which one are you gonna pick on? You’re gonna, what are the that’s gonna collapse? It’s just human nature, and so pay attention. To that, realize that everybody that’s feeding you information, including you and I, Steve, have an agenda. Our agenda is we want you to do real estate because we know what it means for you over the long run.
Some of the tiny Pocket brigade and some of the the news media, their agenda is clicks and eyeballs, and fear gets more clicks and eyeballs. Just watch the evening news. There’s a reason why 95% of the news is bad news, bad news, bad news, bad news. We’ve been conditioned to click and look. The good news though, is that the market, if it is normalizing, Opportunity that is abounding with additional opportunity coming.
And so if our agenda for you is to do real estate, it’s because we know what it represents for you and for your future. And just be aware of where you’re getting your information and what the media is saying and realize everybody has an agenda. Your agenda should be your personal economic independence.
And the question you have to ask is, am I taking a step further towards my economic independence by sitting on the sideline and doing. Or away from my own economic independence by sitting in a state of fear. So if you’re not sure, go to daily fastball.com. Take a look at the deals that are coming down the pipe on a regular basis.
Go to dfy-webinar.com. Get the information from sources that may have an agenda that want you to move forward because we want you to get your income replaced. That’s a whole reason we do the podcast and we know what it can mean for you, for your family, and for your. Anything you wanna say before we sign off, sir?
Steve Earl, c e o of done for you real estate. Ready to sign off. That was great, Kev. Thanks. Awesome. Thanks everybody. We’ll talk to you soon. Thanks for joining us on Replace Your Income with Kevin and Steve. Do you wanna learn more about our company done for you real estate and to see if you qualify right now today to begin replacing your.
Simple and conservative real estate investing done for you. Visit D F y-intro.com. Click the orange button, watch our super quick webinar, and fill out the little form on the right side of the page. You’ll know within 60 seconds if you qualify to begin replacing your income. Right away. As always, please rate, review and share the podcast with friends and family.
And until next time, just remember income replacement for you and your family may only be one property away. See you next week.