Can fluctuating interest rates and overinflated property prices change your real estate strategy? Join us as we explore the turbulent conditions of today’s real estate market, starting with a heartfelt tribute to the heroes who have sacrificed their lives for our freedoms. We’ll tackle the pressing question: to rent or to buy when interest rates hover around 7%? Discover the hidden costs you might not have considered and the benefits of locking in a fixed mortgage payment compared to the unpredictable nature of rising rents. Sellers, we haven't forgotten you – hear about the hurdles you face, especially when up against new home builders offering enticing incentives and lower prices.
What does it take to thrive in such a competitive market? We share practical strategies, from effective pricing and understanding market trends to the transformative role of automation in real estate. Learn how shifting from working in the business to working on it can enhance productivity. We’ll dive into daily goal-setting, time-blocking, and prioritizing revenue-generating activities. Personal stories reveal the importance of recognizing individual strengths, finding partners with complementary skills, and building a supportive network. Whether you’re battling personal or professional challenges, our insights aim to inspire you to keep pushing forward and foster lasting relationships in the industry. Tune in and transform your real estate game!
Can fluctuating interest rates and overinflated property prices change your real estate strategy? Join us as we explore the turbulent conditions of today’s real estate market, starting with a heartfelt tribute to the heroes who have sacrificed their lives for our freedoms. We’ll tackle the pressing question: to rent or to buy when interest rates hover around 7%? Discover the hidden costs you might not have considered and the benefits of locking in a fixed mortgage payment compared to the unpredictable nature of rising rents. Sellers, we haven't forgotten you – hear about the hurdles you face, especially when up against new home builders offering enticing incentives and lower prices.
What does it take to thrive in such a competitive market? We share practical strategies, from effective pricing and understanding market trends to the transformative role of automation in real estate. Learn how shifting from working in the business to working on it can enhance productivity. We’ll dive into daily goal-setting, time-blocking, and prioritizing revenue-generating activities. Personal stories reveal the importance of recognizing individual strengths, finding partners with complementary skills, and building a supportive network. Whether you’re battling personal or professional challenges, our insights aim to inspire you to keep pushing forward and foster lasting relationships in the industry. Tune in and transform your real estate game!
Hey guys, welcome back to the show. This is the day after Memorial Day weekend. I hope you guys had a good long weekend, but I also wanted to express my gratitude and thankfulness for the individuals that have sacrificed their lives for this country, for our freedoms, and for their families that have also sacrificed. So thank you, Solemn opening. But let's get right to it, Guys.
Speaker 1:
This week we are going to be chatting about several topics. One is rollercoaster ride of the real estate market mindset when it comes to business and how we can position ourselves and how I'm working through being able to move myself from working in the business to working on the business. So first all, let's learn how to speak English. First off, the real estate market the best way to describe it that I've been saying for months is a roller coaster ride, and that's just where we're at. I don't know how else to describe it because we're all in the space.
Speaker 1:
The challenges for the week that I want to talk about in this space is rates, interest and interest is in people buying and then overinflation of sales price. Interest rates keep on fluctuating up and down and they continue to go roundabout. I think at this point and it's just an educated guess that we are close to finding a spot to where people are going to understand that buying a home is going to cost them more today than it did three or four years ago. We're getting over that piece because I think rates are going to stay close to seven for the time being. A lot of the people on Wall Street are talking about there being no rate cuts this year. I agree, I've been in that camp since probably February or March, knowing that we've had hot inflation. I don't think we're going to see anything. So right now, 7% is where it's at. We all have to move at some point and we're afraid to lose that 2% or 3% interest rate on our mortgage. What about if you get another job and they have to relocate you? Well, guess what You're going to have to move and they have to relocate you? Well, guess what You're going to have to move.
Speaker 1:
And there's other people that are renting. Where we're talking about rents increasing in most markets, Some are starting to come down. That's part of the sticking point in inflation right now is because owner's equivalent, which is rent, continues to be high in a lot of the markets. Here in Arizona it is still high. There's a house down the street. That's similar size to mine and they're still asking $2,500 a month in rent. Compared to my mortgage is less than $1,500 a month. So figure that out. It's almost $1,000 more a month. Yeah, of course you have to pay property insurance. Sorry, you have to pay homeowners insurance. We have to pay property taxes and we have to pay the HOA or the homeowners excuse me, the HOA. God, I got to learn to speak English today, guys. Sorry, but all those numbers are baked in to that rent. And I can tell you property taxes, homeowners insurance and the homeowners excuse me, the HOA is not a thousand dollars a month period, it's half of that. It might even be a little bit less. I'll have to calculate that out, but I can tell you for sure it's a half.
Speaker 1:
We need to be effective but also really strategic. When we're looking at do we rent or do we buy and I know I've talked about it multiple times You've got to sit down and look at both sides of the actual equation and put all the costs involved to owning a home to renting, and then you make a decision. The challenge is your rent has the ability to continue to go up every single year when you renew your lease, your mortgage payment when you get that fixed mortgage payment doesn't change. It continues to stay where it's at Now. Will costs when it comes to maintenance potentially go up? Yes, but you have to budget for those things. And, guys, by all means I'm not trying to convince you to buy or rent. I'm telling you to be educated on what you're trying to do and make that decision. So, with rates, we're going to continue to bounce all around. It's going to be up to you. And I want to go to jump to the third story is overinflation.
Speaker 1:
So right now, I'm still in a development that has new construction happening and there's people putting their houses on the market, and they've been sitting on the market for two, three, four or five months. And let me tell you realtors listening, I love you guys. And let me tell you realtors listening, I love you guys. But if you're putting a house up that is a existing home in a tract or within a mile or two radius of new builds, you need to go check what those new builders are offering and then figure out your pricing from there. So my neighbor two doors over decided that they had to move. So they put their house up on the market and they put it up close to $600,000. That's great if they can get it, but they're not going to get it because right up the street you actually have new home builders selling for in the fours with interest rate buy downs into the 4% range, also with $25,000 to $30,000 in closing costs.
Speaker 1:
How do you compete with that? Right now the new home builders have got the market contained. They can't build them quick enough. But with the pricing on, this is crazy. This house originally sold for below $300,000. They probably put in another $50,000 to $75,000 in their backyard because they got a pool. So let's call it. They're all in at $400,000. Just rough numbers. They then are saying they want to make almost $200,000 profit after three years of living here. I don't know if that is the homeowners that set that price or the realtor or both, but I'd love to have a conversation with the realtor and understand where they got that pricing from, Because in the end, it's just setting your clients up for failure.
Speaker 1:
Not knowing your market and not being able to price accordingly doesn't work. Because, yes, you can go about and do your price reductions, but what does that do for you? It's taking your commission away. Have you thought about a loan assumption? Have you thought about a buyer that potentially has 20% down and take that loan assumption and put it into a HELOC on the backend, to where you can assume the loan and then take out some equity in the backend to get you paid and the sellers sorry, the buyer's agent paid everybody's whole? I don't see a lot of that happening at all and that's very troublesome because we're not being creative in this existing market Cause for a while people were actually talking about this and then all of a sudden it went away, and when it goes away it doesn't work, and now we're just having houses sit on the market, sit on the market, sit on the market.
Speaker 1:
So when they came on the market about two weeks ago, at that time there was 15 or 16 properties that were between $400,000 and $600,000. There's now 22 properties in that range, not including new builds. So there's 22 other properties they're competing with. I don't think it's going to sell with a five in front of it. I don't know if it'll sell with a four in front of it, but it'll be probably closer to the three range. So we'll see where that goes. Guys, my biggest thing is let's set ourselves up for the market dynamics and be able to figure out what's going on. If you're going to put an existing home on the market above what a new build is going for, plus interest rates at seven, plus closing costs that the new home builders are offering, you're not going to sell a unit. So you've got to figure out how to play the market dynamics. Lastly, guys, I went backwards, I know, and I moved them all around his mindset.
Speaker 1:
So for the last several weeks, I think I've shared that I'm working on getting out of working in the business to working on the business, and I'm doing several things. One I'm looking for automation, and automation comes in the form of cold calling, but also some of the automation aspects that I'm doing on a daily basis, whether it be social media, of editing this podcast, also being able to pull data out off of the market and understand what's going on. But the challenge is is my mindset? I have a limiting excuse me, a limiting mindset, and what that truly means to me is I'm so worried and anxious about the future and making sure I have what needs to be done instead of focusing on the now and being able to make crap happen, and that's where I'm at. So I'm testing right now AI making outbound calls versus a cold caller and I want to see how that goes. I might use a combination of two. I think there's some really cool things that could be done there. Both of two. I think there's some really cool things that could be done there both.
Speaker 1:
And then I'm working with a guy off of Fiverr to where I'm going to automate my weekly true talk. So every Wednesday I put out a true talk, which is a video. I want to take the video and extract out the audio and turn the audio into social media posts but also a newsletter that can be sent out and attach it to an email and send it out to my realtors, to our home buyers, to whoever. But today that takes multiple steps and to be able to find a way to make that work has been a daunting task for me, and I'm sure I'm not in this boat or a camp alone and I'm sure you guys are struggling with it. But some of the tips and ideas that I'm working on that I want to share is putting out larger goals on a daily basis. So I write them down and then I look at my daily goals or these bigger goals and break them down to even smaller steps and then I take the ones that I want to focus on the most and I think can make the biggest impact. I put them down in my journal, but now I'm writing them on my mirror in my bathroom so I see them on a daily basis. So I don't just see them in my journal, I'm seeing them in the morning when I'm actually getting ready. Has that helped? I think so. I'm about three weeks into this and I can't tell you for sure, but it's helping me focus, that is for sure. The other aspect is blocking time in the morning to make sure I'm focused on these things is helping.
Speaker 1:
I still have FOMO and being able to worry about if the phone rings or someone texts me. That I don't respond back quick enough is still. It's still bothering me, it still haunts me. But I can tell you guys this the only way I know I can get better is to continue to focus on the things that I know that need to get done, that are revenue generating steps, and make it happen. I saw a social post several weeks ago, or maybe longer, where someone says I need to create a business that has overhead that doesn't allow me to fail. In a sense, that's pretty crappy, because then you have to worry about those bills. But if it's just human capital or tech that's running it, then you can really focus in on your skill set, and my skill set is closing.
Speaker 1:
I'm very good at building the rapport and closing. I hate cold calling. Can I get better at it? Sure, but why do I want to spend my time doing that when I can find AI to do it or someone else to do it for me and really focus in on closing calls, closing deals, putting loans on the books, selling houses, working with investors those are all the things that need to happen. The other aspect that I'm focused in on is I need to find somebody that compliments me in the business, that he or she has a vision, like I do, in how to grow the business but is a compliment when it comes to skill sets. He or she's really good at the sales and marketing aspect.
Speaker 1:
They want to be out in front. I don't particularly want to be out in front. I can do it. I'd rather be in the background, closing deals, building relationships. That way People, a person that wants to be able to go and spend a lot of time in these rooms that I'm not in to get more volume coming in the door, you fish it out. I will actually make sure we cook it and clean it or, sorry, clean it and cook it and we'll put it on the dinner table, Because if we don't eat.
Speaker 1:
But, guys, in all of this, the one thing that I've not forgotten is I know that there's other people struggling too, and if you're struggling, feel free to reach out. The more people we have around us that have the mindset of we're going to get through it and we're going to blow this thing up is huge. But getting into a room that's larger than you, where these people have already gone through that and now are on another path, is even better. But you can't just give up on your dream because it becomes hard. I've been living hard for the last seven years and the persistence and consistency is keeping me where I need to go to make it all happen, and I'm on this last push to open up things and make things happen. So, guys, if you're struggling, mindset whether it be personal or professional keep pushing through. Do things that set your mindset excuse me, mindset up for success, but also stay positive and surround yourself with people that support you have a good one, guys. I'll talk to you later.
