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Flipping America 228, Get Trendy!

Feb 11, 2019

FAR 228

Expected Air Date: 2/11/19

Opening

The 2019 Trend Report

It’s possible there are two destinations in front of you - the place you want to be, and the place the market is heading.The general market direction is due to a variety of forces, none of which are in your control. But what if it is going in a different direction? What if the opportunity lies in an area beyond your expertise? What if your success strategy is based on certain market fundamentals but the market is behaving differently or perhaps even the opposite way for your plan to succeed?  In some ways your success in life and business is to find a path to your own ultimate destination that rides along with the market forces that are outside of your control.

Over the past few years if you have been a single family fix and flip investor and your strategy has been to buy anything in the hot area even if your margins are thin, relying on price increases to make your money, you will find that in 2019 this game is up. Starting now, or actually six months ago, you MUST buy them right - no fudging on the margins - or you will rue the purchase day on sale day.

If you are a passive investor in a REIT that owns malls and retail space, you’ve done well over several years, but the last couple of years have been a kick in the pants. Do you hang in there, knowing that the American retail market is bound to bounce back (and paying attention to the fact that many successful online retailers are now opening brick and mortar stores?).

My point here is simple and it is this: For continued success, you need to pay attention to trends and respond appropriately. Today we are going to talk about the trends we expect in residential and commercial real estate for 2019 and before the show is over, I’m going to make some suggestions about how to respond to trends in general and these trends in particular. So hang on folks...

How to contact us

www.flippingamericanetwork.com

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We now have a profile at houzz.com for what it’s worth.

Call our National Comment Line: 404-369-1018, ext 1. Leave your message or your question.

Announcements:

  • Lunch with me every Wednesday. Baraonda
  • The FAN is rolling out very soon. First quarter for sure, possibly within the next six weeks. It’s an online property marketplace for investors. Free to use with a small technology fee when you buy a property. Wholesalers no longer need to build a buyers list. Just log on and a massive buyers’ list is waiting for your property. Rehabbers can look at the deals, the pictures, the information on the property, and make a decision.  You can also reserve your zip code and get 48 hours of exclusive access to all new listings in that zip code. Homeowners - you can list your property in the FAN for free and get an all cash offer very quickly.
  • Hey would you buy me lunch just so you could pick my brain? For less than the price of that lunch, just $9.67 per month, you can have a whole month’s worth of my brain pickings by joining the Premium membership. Just go to flippingamericanetwork.com and click on the FAN. On this show I keep a pretty narrow focus on real estate and small business development. But if you subscribe to my FAN premium blog you’ll find out what I think about a wide variety of topics. I will do my best to give you a $10 or $100 idea with every post and I WILL be talking about real estate, but I’m going to weigh in on some other topics as well. Which topics? Whatever interests me. And I have a wide range of interests. Coming up in the next few weeks I’m going to weigh in on the immigration debate, I’ll be talking about the notion that “you shouldn’t listen to what anyone says, just be yourself.” (one of the more misguided ideas of our time). And I’m going to spend a little time talking about how we learn because we should be making that part of our life journey. I’ll tell you the books I’m reading, the thoughts I’m thinking and the way I’m taking my business.All for less than it would cost you to buy me lunch.
  • First Thursdays, Join us tonight at 7:30 pm on Facebook live for free. Next up, Deonna Britt, founder of LawClerk on Demand
  • March 16-17, FlipStarter, www.flipstarterevent.com.
  • It’s called the GMS Planner. GMS stands for Goals, Milestones, and Steps. It’s a system I developed for my own use several years ago and after listening to my friends and business associates tell me I should be selling it, we started producing it for the help and benefit of others.
  • Would you like to invest in the Flipping America projects across the country? Coming soon you will be able to for as little as $10. That’s right, Flipping America is partnering with Ground Floor Funding to create a crowd-funded platform where you can invest in the deals we are doing here. The fund will pay out a 6% preferred rate of return and can go as high as 20%. We have some hoops to jump through at the SEC, which is not open right now but it can’t stay closed forever, right? Once the government reopens we will be about 60 days from launch of this new venture. You can make money with me, the Flipping America Guy.
  • Flipping America App is in the app store. You can listen to the show, read the show notes, and the entire catalog of shows is now available to you. It’s a free download and there are no upsells or in-app purchases. Free to download, free to listen. Go ahead and give it a try and drop me a line and let me know what you think.
  • Want a quick analytical tool to tell you how strong a potential fix and flip deal is? Download the Property Grade app. You answer 10 simple questions about the property and the app instantly tells you what you can expect to make, your return on investment, your return on cash, and then the program gives the project a letter grade using the proprietary Flipping America Investment Property Grade algorithm.  

News:

Topic: The Trendy RE Investor

Trends:

  1. Home Prices up, but not as quickly.
  2. Mortgage rates rise, only slightly.
  3. Millenials are the majority of buyers.
  4. The RE Market is not going to crash.
  5. Opportunity Zones
  6. E-Commerce in Real Estate is a non-impact conversation piece - STILL.
  7. E-Commerce for everything else will continue to drag down retail space.
  8. Construction Costs are on the rise
  9. Technology for RE will continue to improve.
  10. Senior Living Communities will increase.
  11. E-Commerce will create more demand for warehouse space. Smart and multi-level.
  12. Online retailers will continue to open brick and mortar stores.
  13. Foreign investor demand for US properties will increase.
  14. Institutional investors are heading to secondary and tertiary markets for yield. This usually happens before a recession.
  15. Grocery chains will move further online.
  16. Office Spaces stable, shared or co-working spaces continue to be popular. WeWork will not show a profit.
  17. The Amazon HQ losers will see economic benefit from the competition.
  18. US hotels will break occupancy records in 2019. Expected to be up 66.2% this year, the 10th consecutive year of growth.

In general:

  1. Go where the buyers are;
  2. Sell what the buyers want;
  3. You’re not an artist, you’re a manufacturer;
  4. The market will not conform to your wishes or hopes. You conform to it.

Specific for 2019:

Legal and financial disclaimer

  1. Millenials are buying homes and want walkable suburbia. Let’s develop it, or focus there.
  2. Study areas saturated with single family investors and ask, “Where will they go from here?” Get there second.
  3. Early bird gets the worm, second mouse gets the cheese.
  4. Watch for the opportunity to invest in medical office space in the caribbean. Rich people are going to get the medical care they want. When they can’t get it in the US they will go where they need to. You may not like it, but why waste energy protesting? Make money accommodating the market demands.
  5. Find a use for abandoned malls and strip shopping centers and you will cash in HUGE. Here’s a hint - employment opportunities for the newly relocated millenials.

Comment Line calls and Questions

Call 404-369-1018, press 1 and leave your message!

Motivational Thoughts for the day

  • "It always seems impossible until it’s done" -Nelson Mandela