Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.

---

We had this, this shortage of supply even before Covid, and then Covid kind of rolls around and sort of unexpectedly we see like this increase in demand, which is part of what’s causing this Thai inventory. Well, I’d even pulled back like it wasn’t covid that all of a sudden there was an increase in demand.

There was already an increase in demand. What would your life look like if you could replace all of your working? 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. All right, well, hello everybody and welcome to Replace Your Income with Kevin and Steve Earl.

How’s it going, Kevin? Awesome, man. We’re in the studio again together. Fantastic. Hey, uh, you’re looking a little bit tanned there. Oh, yeah, yeah, yeah. That’s because of the beach in Mexico. Spent a week on. Oh, that’s what it was. I didn’t even notice you were gone. Well, . Yeah. Most didn’t. Yeah, Just kidding. I’ll tell you.

Just kidding. . You know what’s funny is, uh, somebody made a comment to me, they’re like, Hey, it looks like you got some sun. And I was like, Well, with me it’s just like, it’s just like phases of pale, right? It’s like I’m normally like practically translucent. I’m so pale and white, and now I’m like slightly.

Pale. That’s really, I don’t tan, I just get slightly less pale. Hey, you’ve got good killer. Good killer brother . Oh, it was awesome man. Mexico was fantastic and we were talking to some of the tour guides that we were with and they were talking about how, and I didn’t know this, that that Americans can’t own property in Mexico, right.

They have to lease it. And I was like, Wow, that’s really fascinating. I just that it’s always so interesting to me when you go somewhere else that has an entirely different system, an entirely. Way that they look at and do real estate. It’s just, it’s always really interesting to me. Yeah, it is. You go to different countries around the world.

In Mexico is one of them. Um, I was down there many, many years ago and we, we actually, the tour guide took us and showed us some different available opportunities. Oh, cool. Which was interesting. And, and yeah, you, I think it was like a hundred year lease that you could do. Yes. But you couldn’t. Like actually own the property.

Yeah. Just crazy. Yeah. Well, I’m excited to be back. We’re excited for this podcast and uh, as always, thank you everybody for listening. The podcast numbers continue to go up Steve, and so thank you. That’s cuz of you. If you’re listening right now, it’s cuz of you. In fact, something kind of cool. I was sitting, uh, in the, my wife and I were sitting in like one of the communal hot tubs at this resort and this girl said, Hey, she heard me talking to somebody else in the hot tub and she said, Wait a second, my husband listens to your podcast.

So somebody at the resort in Mexico listens to replace your income. So hey, out there, whoever you are, , that’s awesome. Gotta love that you’re turning into a celebrity, Kevin. Oh yeah, that’s exactly it. Yeah, let’s go with that. Um, no, but really you guys, thank you so much for listening and today we have a topic that’s gonna be really good.

So here’s the thing. You’ve been hearing about it, I guarantee if you’re attached to real estate in any way, shape or form, we’ve been talking about it. The news is talking about it. Any real estate agent that you know of is talking about it. I guarantee you’ve heard that inventory is tight. We’ve even talked about it on the podcast, but what we thought we would do today, Steve.

Because we thought that we would talk specifically about why is inventory so tight? There are a variety of factors that are leading to it, and you need to know why. And then we’re gonna talk about not just why it’s so tight and go through that, but then we also wanna say, how is that gonna affect future prices?

Is there gonna be a crash? And then we kind of wanna wrap the episode by saying, how is that affecting DFY clients? Yeah. You know, in the real estate agenting world right now, uh, in fact they’re calling it inventory shortage insanity. In, in some markets it’s worse than others, and in most markets it’s pretty crazy and in some markets it’s just plain insanity.

I, I was reading an article earlier today about, uh, an agent who, who had a client, they were buying a, a higher price property. It was, is in the, like the $700,000 mark, so it was up there always. But they made an OR on the Bay Area. It was a little two bedroom piece of crap. Yeah, Yeah. Okay. Yeah, Just, yeah. It was an average below average property, depending on where you’re at.

So they were gonna make an offer, and they’re gonna make an offer $150,000 over asking price, which to me, that’s insanity. Right? That’s insanity. Yeah. Well, guess what kept. They got beat out by somebody who offered $230,000 more than asking price. Gosh. So, I mean, there’s some craziness going on out there, but there’s also some sanity going on as well.

But I’m kind of, I’m, I’m quite interested to have this conversation with you to kind of just review and go through some of the reasons why this is actually, you know, going. Yeah, totally. Okay, so then let’s dive into this thing. Let’s talk about why is inventory so tight? Because this is not something that just happened overnight, right?

You were, we were talking earlier. This is something that frankly started a long time ago. Yeah. I mean, over a decade ago, right back 2008, 2009, the great recession hit and you know, builders were disproportionately impacted. Like they got devastated in terms of, Literally overnight, like their businesses went from booming to bust.

Well, because back then, I mean, everybody could get a loan. It was so easy to do, and so builders were building like crazy. So there was kind of this, this excess of inventory. There was a surplus, Yeah, that that took place before the crash. Then there was a mortgage crisis, and like you said, they got crushed overnight.

Yeah. And, and so when you talk about supply and demand, at that moment in time, there was an excess of supply. And some of the reasons why there was an excess is because loans were easy to come by. There’s a lot of people speculating. They were working with builders, They were buying spec homes. They called them spec homes or speculative, you know, new builds.

And, and so when that bubble, there truly was a bubble because there was all these homes being built and there was nobody. Occupy them. There’s nobody to actually go in and buy these properties once they were finished. And so you had this oversupply, you had builders, got a business. And then of course you had like the big, the public builders who they pulled way back as well.

You know, they continued to build a little bit, but they did not keep pace with the growing population and the changing demographics across the country and so on. So over the course of the last decade, we had this swing and there. More people available to buy properties than there were properties available to be purchased.

And so we had this, this shortage of supply even before Covid. And then Covid kind of rolls around and sort of unexpectedly we see like this increase in demand, which is part of what’s causing this Thai inventory. Well, I’d even, I’d even pull back, like it wasn’t Covid that all of a sudden there was an increase in demand.

There was already an increase in demand. Right. And that. You know, you and I sat across from these exact chairs. Yeah. This exact desk. And we were like, you know, the rest of the, kind of the, the news media and all of the experts out there were, they were predicting a crash actually. Right. Another crash. And you and I were like, I don’t think there’s gonna be a crash.

Because we were seeing and feeling and experiencing what was really going on in the market based on what we were seeing, buying hundreds of properties, or helping our clients buy hundreds of properties. You know, over the previous several years, and the fact was that there was a massive demand for properties because of the supply and demand issue that that existed.

Then it’s that covid actually, what we discovered a few months later with Covid, it actually exacerbated that the issue in terms of what began to happen with Covid, and this is another factor, is that people began to feel like, Gosh, I don’t wanna live in this high density housing. I don’t wanna live in the metropolitan area.

I wanna move out to the suburbs. Right. And as Covid continued to you, you know, move along over the course of, of 2020, we saw kind of a massive exodus. Yeah. We, yeah. From city centers to suburban areas for a couple of reasons. Right. And, and we also saw, we’ve talked a lot about this too. We’ve actually seen an exodus not just from high density areas to more suburban areas, but also people kind of flee.

Some of the more, how do we say, stringent states, right? Like California, right? California has been maybe more difficult to be in during the Covid era than other states that maybe have been a little freer. And so we, we’ve seen a lot of that too. I mean, there were people that were moving out of states where there’s, they’re very populous and they’re moving to some of these other states that were a little bit more free because they’re going, Holy cow, I don’t like somebody.

Telling me everything that I can and can’t do. Then you on top of that, even within those states where there was this higher density housing in these metropolitan areas, you’ve got people kind of flooding out of those saying, Well, I don’t wanna share an HVAC system with somebody. I, I wanna have a backyard.

I wanna be able, I can work from home. I don’t have to be in these major metropolitan areas. And so we’re seeing. Increased demand. And one other thing I wanted to circle back and say is, so we had this shortage, right? There’s this overbuilding that took place, the mortgage crisis hits, and then, you know, builders stop building, they pull back.

But, uh, they’re not even building to keep up with demand at that time. Population continues to increase. And then, you know, the last four years we, we saw actually a pretty significant step up. In terms of what the economy was doing right and people going back to work and people being able to do fairly well.

And obviously when you make a little bit more money, you feel better about your financial situation. You might be looking to upgrade your housing situation. And so that was kind of fueling some demand. But we still had a shortage in supply and then now Covid hits, and now you’ve got more people wanting single family homes moving away from higher density housing.

So all of this is kind of compounding and creating some of this tight inventory. Yeah. And you touched. As well that there’s a fairly significant exodus from some states to other states. You know, from New York to Florida, from New York to North Carolina and South Carolina, from California to Utah, to Utah and to Idaho and to, you know, And so there’ve been some pretty massive, you know, shifts in demographics, which has placed a lot of pressure on single family housing.

Now, on top of. We’re changing demographics as far as our population. Now we know that the country continues to increase in popul. But in particular, the millennials, they’re reaching that 30 ish age, uh, group where, you know, they’re, they’re starting to feel like, Hey, I wanna settle down a little bit. Right?

I don’t need as much nightlife. I want a little bit slower pace. Yeah. I want an extra bedroom. I might, I, I’m thinking maybe getting married or I got married and they wanna start adulting. Yes. Yeah. Maybe having some, some children of their own right? And so they want a single family home instead of, you know, uh, a 600 square foot apartment right in the heart of all of the excitement.

Right? Sure. They’re willing to slow things down a little, and that has been a big shift as well. Yeah. And then you add to that. So again, guys, what are we talking about? We’re talking about why is inventory so tight? You’ve heard about it. So what are the contributing factors? Well, here’s an, so we know it’s supply and demand, right?

I mean, when there’s really. Demand, but supply is low, then that causes kind of atric. Of this inventory and all of this that we’re talking about has also been fueled by record, historic low interest rates. So you have more people going, Wait a second, I can qualify for more house, or I can qualify now when maybe I wouldn’t be able to afford a payment or something like that.

All of a sudden more people are qualified because interest rates are really low, which adds to the demand as well. Yeah. Now, because of all this demand, obviously the builders, both the big public companies and you know, small builders, which actually make up the large, you know, the vast majority of building that goes online country have seen an opportunity because of the demand, the rising prices, and so on.

And so they’ve really began ramping up and it’s nothing short of incredible to see the number of housing starts, the permits being issued by cities. And here’s an issue is because of that suppliers. Like they haven’t ramped up. It’s kinda like Covid, right? When Covid first hit, you went to the grocery store and you couldn’t find toilet paper or bottled water.

Yeah. Well, it’s the same thing with building like the big builders. Guess what they’re doing? They’re hoarding the supplies. They got the big bucks. So they’re going in and they’re purchasing in massive quantities before, you know, before the trees are even cut down, they’ve got orders that they’ve locked in pricing, right?

Sure. And so they’re taking advantage. And so there’s a shortage of. On the market. And so guess what? There has been a doubling and even quadrupling in the cost of materials for homes. And what does that do? That drives up the price of homes. Now, in addition to materials going way up, there’s a massive shortage of labor.

So with all of this building over the last decade, we’ve had it like people haven’t been in the building industry. So there’s a shortage of painters, there’s a shortage of carpenters, there’s a shortage of flooring guys, all of the different subs who are required to build homes. There’s a shortage of them.

And so, There’s that issue where builders, they can’t find enough labor to, uh, build these homes as quickly as they need. Now there’s a simple, you know, solution to that. Kevin, by the way, being, you know, the, I won’t necessarily call myself a Treky Uhhuh, but I really like Star Trek , and if we could just build a replicator.

Oh, good idea. You know? Yeah. Or if we could build enough printers that we could just print a house. Yeah. Uh, then, then that would work. But I think we, we solved it. There it is. Right there. Build the replicators. So bottom line, massive shortage of labor as well. Yeah. Right. So those are all contributing factors and, and there’s more.

Yeah. Like for example, we are in the midst of this insane government spending, right? The literally the government is spending not billions, trillions, and trillions of dollars. Kevin, do you, I, I was thinking about this other the other day. What comes after a trillion? I don’t know. What does come after a trillion?

I actually, I looked it up because I had the question. Quadrillion quadrillion. Well, I think we need to spend a few quadrillion then, because the seven or 8 trillion isn’t gonna be enough. So we are printing, we are fabricating money at a remarkable pace. But what’s gonna happen there? Now, here’s the deal.

Listen, I was talking, I had these buddies that. They do a bunch of home construction stuff. They are so dang busy right now because everybody’s putting in a perilla. Everybody’s remodeling their kitchen. Everybody is adding value to their home so that they can sell their home so that they can buy another one, or they’ve got more money to contribute to a down payment to be able to go buy home.

So listen, it’s actually a bit of an artificial inflation. Of someone’s ability to buy, which is also having an impact on demand because we’re fabricating, we’re managing all this money into existence, which will have an impact on inflation, which by the way means that materials go up in cost. Labor goes up in cost, Prices go up in cost.

And so in general, you’ve got a lot of inflation that you need to be expecting that you. See, but you also, the thing is we don’t look at it and go, Oh my gosh, there’s all this magical money in the economy. We should maybe pull back. Instead we go, Oh my gosh, I have more money to spend. Let me go add to the demand.

I wanna go buy a home. I wanna go upgrade my home. And so you may not think that government spending would have an impact. And obviously the government spending is gonna have a long term impact. We’re talking, this is more short term right now, but it is something that’s significant because people are getting seven and $9,000 checks in their mailbox.

From the government for the third stimulus payment, and then they’re going and spending it on things like housing or finally saying, You know what? That’s the last little bit I need to go and buy a single family residence. Well, and it’s not necessarily even that they’re spending it on housing, but when you have excess funds like that and you go buy stuff, well, that puts demand on other manufacturers, which takes away from raw materials, which are required for housing type materials.

Sure. It’s a ripple effect. And so it’s a, it’s a total trickle down ripple effect of. You know, the prices of things going up. So kind of, you know, one of the, the big questions, if I was sitting on the other side of this microphone listening right now, and in fact I’m on the other side of the microphone listening to myself, , and I have the same question, but I have some philosophical ideas and some theories as to, you know what I’m gonna, uh, pose an answer to this question that I have, and that is, so are we creating a bubble, which is going to create a.

Of crash at some point on that. By the way, that’s a question I literally hear almost every day. Yeah. Is, is when Covid first hit, I had a lot of people that were saying, Okay, well, is now a good time? Like, is everything gonna crash? Like, I’m so worried about it because all the brilliant prognosticators said that there was gonna be a crash and then there wasn’t one.

And so now, We have to look at the economic factors and go, Whoa, hold on. Is this fueling the potential for a crash? And I know that’s a question that’s on a lot of people’s minds. Yeah. And you know, I’m gonna put out my disclaimer. You know, I broke my crystal ball long ago, as I mentioned. Yeah. Fell when we moved to this new off as I drafted it, it shattered actually.

Well, and I lost my taro cards, , uh, and so I can’t, I can’t, I can’t use those anymore either. So I just wanna be careful that, you know, I could be absolutely a hundred percent wrong, but this is my thought process, Kev, and, and that is, I, I still don’t see like a crash, so to speak. I don’t see a bubble. I, I don’t see empty houses.

I don’t see. Fake inflation. Like people are buying properties, they’re moving into ’em and they can afford them like it is. Right. Like money has never been cheaper. Right, Right. As far as rates and that kind of a thing, but it’s never been more difficult in the history of this country to get a loan Practically qualify.

Yeah. To qualify like the, the rules of anything. They have become even more stringent through covid, like to get a loan these days. Like it, it’s, it’s an excruciating process. Yeah. I’ve bought a couple properties recently. And it was kind of excruciating up until the very moment that I signed Kev. Like I thought I had like approval of the whole thing and there’s kinda like, Oh, just kidding.

We need an additional thing. Like they just wanted to make sure that, you know, I could still produce a piano, in fact. Sure. They just wanted a receipt showing that I had bought something. Through my business to, to prove that I was actually still in business . Gosh. So it was, you know, essentially, So like I say, it’s never been harder.

So there’s not people qualifying for loans and getting into loans. And typically down payments are higher with people paying over asking price. Like people are vested in these properties and they’re not going to just walk away from them. Okay. So there’s lots of different factors that I’m not including in kind of my analysis of why I don’t think that there’s this massive pending crash of real estate that, you know, in the next year, next 24 months or 36 months, there could be.

I think that there definitely, there has to be kind of a flattening out of, of this curve, kind of a correction. Think Yeah. You know, to some degree, but all indicator. The shortage of labor, the shortage of materials, the fact that, you know, there’s trillions of dollars being pumped into the economy. The fact that raw materials are in great demand across the board for all sectors of the economy, which affects housing because you know, like all of these raw materials are things that are needed for homes.

That, that I just don’t see like this massive fall in. I also see interest rates being, you know, they’ve been kind of fluctuating right over the last several months, but based on where we’re at in the economy, it seems reasonable to think that rates will remain low for the foreseeable future. Maybe they won’t bottom up like they did a few months ago, but they, I think they’re gonna be pretty steady.

Because that’s what helps to stimulate an economy and, and politicians are vested in a growing economy because Right. That’s kind of how they get reelected usually. Yeah. And so there’s a, all of the, everything seems to point, you know, in that direction. Now, having said that, there are some great minds out there, experienced minds who, who do think the opposite, who think that there’s some, you know, crazy thing that crash is gonna come up.

I just don’t, I don’t see. From my more practical, less theoretical, philosophical thinking. Like I just, I think very, you know, kind of logically and theor and, and practically, And so from my standpoint, from my viewpoint, I think that things could continue to go up for the foreseeable future. And then maybe we see some flattening out and maybe there’ll be some correcting in the pricing, but I just, I just can’t see a massive fallen value.

It’s so different than it was in the run up to, you know, The 2008, 2009 explosion because, or implosion, whatever, the disaster, because you’re not getting people that that shouldn’t qualify that are qualifying. So back then we had a lot of bad loans and we had a lot of bad loans being packaged with additional bad loans, and it was a whole bunch of bad stuff.

And then it caused this massive crisis. And, and we’re not really seeing that, Right. It’s not that that’s not the same situation. And so I’m kind of with you and going, Look, I don’t know. I will tell you this. I feel like if you’re gonna be investing in anything right now, it should be something that’s different than maybe the conventional, sort of traditional assets.

Yeah. It should be physical assets or, or maybe even cryptocurrency, right? Or something like that. I have no idea, but I something. Gold, silver real estate, you know, something that send this back, that that’s back by physical asset. Yeah. That has real value in it. That’s not just paper value. And so, you know, we are not really anticipating a crash.

We don’t know if one’s gonna come, but here’s the beauty of real estate. Even if there is a crash, Cause we talk about this sometimes too, even if there is a correction, you know, real estate, not only is it slow to kind of be impacted by that, like if you own a property and then there’s a correction, you bought the property for X, Y, or Z, but you’ve got a tenant in there and they’ve, they’re renting it and you’re cash flowing a couple hundred dollars a month.

Even if rents do come down, which we’ve seen rents continue to go up and scale up with pricing. And we’ll talk about that in a. But even if you tenant moves out and you see rents come down a little bit, I mean, you’ve got some buffer with the properties if you’re buying ’em the right way, so that rents could come down and you might still be cash flowing.

Prices could come down and you’re still gonna have equity. The house that my wife and I moved into this last year, I mean it’s already. Grown in like six months, like $50,000 of equity. Right. And it had equity in it when we got it in the first place, just cuz of what we put down. And so, you know, you look at that kind of thing and you go, okay, well there’s some of those factors that even if it does correct, even if there is some sort of a crash or maybe not a crash, but a correction or whatever, Real estate should be a little bit slower to be impacted than maybe some other sectors that can be impacted kind of overnight.

Well, and the great equalizer is rent. Yeah. Right. And typically, historically rent stays pretty steady in some instances, you know, there, there’s a slight, you know, fall in rent, but typically it’d either stay steady, it goes up, you know, at the rate of inflation, basically. Yes. And so the nice thing again about, you know, the type of real estate that we do is it’s very conservative in the sense that you’re getting.

30 year fixed payment. Right. And rents typically go up, Hey, the value your, your house could fall dramatically, but most likely your rent is not. And so you’re gonna continue to cash flow. You can just be patient, you can collect that monthly dividend Yeah. If you wanna call it that, and wait for the market to kind of correct itself again.

And barring like complete, total international implosion Right. Of, of everything. Real estate is pretty darn reliable. And well, and then that brings up the question, right. Okay, so, So we know that inventory is tight and we talked about why demand is high, why inventory is tight, why supply is low. We talked a little bit about that, but then it kind of comes back to the question of, okay, is there gonna be a crash?

So we kind of addressed that, but now look, even if we don’t know that there’s gonna be a crash, we don’t think that there’s gonna be. What’s happening in the market is still having an impact on DFY clients, right? On people that are buying real estate right now, you will see an impact given this. So you’ve got really tight inventory, you’ve got really low interest rates.

You’ve got really high demand. So what is happening for our normal, kind of average every day DFY client that’s acquiring properties on a regular basis? Let’s talk a little bit about that. Yeah, that, that’s a really good question. And the question is, is like, should I be, you know, buying right now, right?

Should I wait for a correction? That kind of a thing. And then the big question is, is like, Where are we getting inventory if inventory is so tight, right? Like, are we in situations where we’re having to, you know, bid against other people? The answer to that is yes, uh, we are, but the nice thing is that we’re in markets where we’ve been for many, many years.

Yeah. And so we have great suppliers. We have builders that we, we work with, or smaller builders. Typically we do work with some of the larger builders. But we have access to properties that many other groups simply don’t have. We, we have some exclusive arrangements with, with builders, which has been very helpful for our clients.

But, but also, and for the most part we just have, you know, agents who, who work with us who are just very skilled. They’re very known in the market. And here’s, here’s the, the main answer to your question, Kevin. We delivered more properties to our clients last. Than we’ve ever delivered before. Yep. We are getting deals now.

Having said that, uh, we also tell our clients that you have to be just a little bit more. You have to be a little bit more thick skinned. You might have to make, you know, offers on, on several properties before you, you get one. But we know how to go about getting them, that you don’t have to be a cash buyer.

If you talk to a lot of, uh, different groups or other investors, they’ll flat out tell you if you don’t have cash to buy, you can’t get a deal in this market. Yeah, well, it, that’s not true in our case, Fortunately, although it is more difficult, we do have supply, we do have inventory. We do have. Skilled people that we’re working with that, uh, on, you know, on a daily basis, you know, we are putting homes under contract and we’re getting them closed at a higher rate than we ever had before for that matter.

But now that being said, look, if you were considering jumping into real estate six months ago and you’d had, you didn’t. You are gonna pay higher prices today. That’s right. Plain and simple. Prices have gone up. Your total out, you know, we always look at it in terms of what does it take to get into a property.

We use the term total out of pocket expenses, which for us is, you know, the down payment and the closing costs and the teams fee that our clients pay to done for you real estate. And, you know, some of those items we say, Look, that’s gonna be your total out, you know, some of the rehab expenses. That’s your total out of pocket.

So total out of pocket has come up, you know? Yeah. A d what, 10? 12 grand over the last, you know, six months prices have kind of moved into, squarely into the two hundreds over the last, But you know what’s awesome, Kevin, is that prices have gone up. But you know what has happened in the markets where we’re at that hasn’t happened in prior years, is that rents have been scaling.

That’s the, with the increase in purchase price. And so that’s what’s cool, right? We, we get asked sometimes, Why don’t you continue to buy in in Phoenix or in Las Vegas? And the answer was, prices went up and, and. Largely did not scale right. But what we’re seeing in the markets that our clients are purchasing in right now is prices are going up, total out of pocket expenses are going up, but rents are scaling with it.

So you’re still cash flowing and you’re still getting these low interest rates. And so it’s been kind of an interesting thing. And to your point, Steve, This the, the kind of the question of are our clients able to get inventory? I mean, we’ve got some exclusives. We have great suppliers who know this inside and out, and we’ve got some exclusive relationships that allow us to maybe get inventory that maybe others wouldn’t be able to.

Yeah. Yeah. And that, and that’s the key. And that’s, that’s the power of working with a group like ours who’s been in business for, you know, we’re in our 14th year now. And, and working with really experienced, seasoned and expert professionals in the property management arena. You know, they’re, they’re getting, like I say, higher rents and there’s higher demand.

So one of our, uh, property managers who I was talking to just last week, he. We have more properties under management today. They, they’ve got about seven, 700 plus properties now. They literally, last week they had six available properties. Holy cow. Like, like that’s just kind of unheard of, right? Yeah. That, that’s, that’s kind of like, you know, the unemployment right today, you know, in Utah, um, and in different parts of the country where like, It’s hard to find people to come work for you if, if you’re hiring because there’s just not very many people looking for work because, you know, so many people are, are employed in many areas.

Now, having said that, there are other areas that are, have been impacted significantly, and they’re struggling still to get back on their feet. But anyways, that, that, that, that’s the analogy that my goodness, six, you know, less than about six homes available. Out of over 700. That’s crazy. Yeah. Properties under management.

It’s crazy. That’s, But what that does is that drive, that helps drive up, you know, again, it’s a supply and demand issue. Yeah. People are willing to, you know, pay a little bit more for a single family home today to rent it. Then, uh, they were even six, seven months ago because of the, the shift in what’s going on in the country.

So here’s the deal guys. I mean, you know, this whole conversation is to say, Okay, why is inventory so tight? We know that it is. Why is it so tight? Well, look, just to kind of recap, we were talking about there was already a shortage of housing that that was in existence. You know, leading into kind of what’s been happening recently.

Builders haven’t been building for a number of years. They just kind of. Got back into building. So there was already a shortage before this demand increase took place. And now there’s been a demand increases. So there’s even more of a shortage. And you’ve got these low rates, these low interest rates that are fueling demand.

You know, we we’re seeing that you’ve got these millennials that are finally wanting to settle down and purchase properties. You’ve got people that are moving out of high density areas, out moving out of certain states and into other states, which is kind of fueling demand. You know, you’ve got, because of the Covid situation or people realizing that they can live in a single family residence and they don’t have to live in, in a high density housing.

You know, there’s a labor shortage, there’s material shortages, There’s all of these things that have created this kind of incredible inventory constriction. But yet this really incredibly high demand. And what that’s doing is it’s fueling purchase prices and we’re seeing that rents are scaling in the markets that we’re in.

And so at the end of the day, is it gonna lead to a crash? We don’t know, but we don’t think so. Right? We look at the economic indicators and we think we’re probably gonna be okay. You never know. We never know what’s gonna come. But it’s not like, it doesn’t feel like, it doesn’t look like the data doesn’t support, you know, saying there’s gonna be a crash.

Like it pointed to the potential of one back in 2008 and back in 2009. And then you add that to the fact that we’ve got suppliers and we’ve got teams in the field that are winning deals and putting properties under contract and getting properties leased out in this incredibly. Yet high demand sort of marketplace, and it says, Look, we really should continue to move forward.

This is a great market to be investing in. Even with prices coming up, it doesn’t matter that much from the standpoint of, yes, it may require more out of pocket in order to get a property, but you’re also gonna be seeing higher rents and you’re gonna be seeing cash flows that are gonna be important to you and your financial life.

And so we just wanted to do this episode and. Why is inventory so tight? Here’s some of the reasons. Why is demand so high? Here’s some of the reasons. What do you need to know? What should be the functional takeaway? It should be, if you’ve been sitting on the sidelines for the last six months, it’s time to at least dip your toe in the pool, right?

Take some steps, get preapproved and see if you can get your hands on some of this very tight inventory, because we always know, we say it on the podcast all the. When inventory is low and demand is high, you wanna be on the right side of the supply and demand curve, not on the bad side of the supply and demand curve.

You also don’t wanna wait 12 months from now and look back and go, How much e, what was my opportunity cost? How much equity did I miss out on? How much cash flow did I miss out on even though prices were rising when I bought? How much would I have missed out on had I not jumped in when I did? And so the encouragement as always is just take some step to move forward and take advantage of kind of what’s going on.

Yeah, absolutely. Well said Kevin. Great recap. Obviously we’re, we’re big believers in real estate. We’re big believers in the housing market and in this, you know, conservative approach to investing in real estate. And, uh, gosh, you know, it’s great to, to talk about these things, but, but it’s, it’s even greater to do what you just said, which is to cautious.

Optimistically and, uh, with a little bit of, you know, trepidation, meaning do your homework. Yeah, do your due diligence. Make sure that something like this, you know, makes sense for you, but you’re never gonna take a step forward if you don’t, you know, do the initial research. And so, you know, as always, our invitation is to, you know, contact us, send us an email, ask us any questions that you want, and, uh, take a look at the website.

D fy dash real estate.com and, and perhaps you have an opportunity to chat with Kevin and, and see if something like this makes sense for you. And there’s great resources on the website, about 10 31 exchanges or, or LLCs and, and links to past podcasts that we’ve done that talks about some of these things that self-directed IRAs, and there’s all kinds of resources there available to you.

So thank you so much for tuning in. Please, as always. Follow, share the podcast. We appreciate you guys so much, and we will see you next week. Have a good one. 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 income was, Simple and conservative real estate investing done for you.

Visit DFY 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.