My crystal ball broke back in 2008, so I have no idea what exactly will happen. I can however, talk with my brain trust of master mind real estate gurus located through out the country and see what is going on in their markets and I can be ready should the sky fall again.
The pendulum always swings back and forth so a correction is inevitable. I don’t know that I would use the word plummet to describe our future pricing but a stall and maybe a slight decrease in some areas surely will occur.
If you live in a bubble market where prices are shooting up, then you are more likely to see a drop, where if you are in more steady non-volatile market, then you are more likely to witness a stall or slight correction and maybe no change at all. The way to protect yourself it to make smart choices and work in the affordable home market. People will always need a place to live.
Carolina Capital is a hard money lender serving the needs of the “Real Estate Investor” and the "Small Builder" borrower who is striving to build wealth and generate income for themselves and their families. We offer “hard money rehab loans” and "Ground up Construction Loans" for investors only in NC, SC, GA, VA and TN (some areas of FL, as well).
As part of our business practices, we also serve as consultants for investors guiding them to network with other investors and educating them in locating and structuring transactions. Rarely, if ever, will you find a hard money lender willing to invest in your success like Carolina Capital Management.
The pendulum always swings back and forth so a correction is inevitable. I don’t know that I would use the word plummet to describe our future pricing but a stall and maybe a slight decrease in some areas surely will occur.
If you live in a bubble market where prices are shooting up, then you are more likely to see a drop, where if you are in more steady non-volatile market, then you are more likely to witness a stall or slight correction and maybe no change at all. The way to protect yourself it to make smart choices and work in the affordable home market. People will always need a place to live.
Carolina Capital is a hard money lender serving the needs of the “Real Estate Investor” and the "Small Builder" borrower who is striving to build wealth and generate income for themselves and their families. We offer “hard money rehab loans” and "Ground up Construction Loans" for investors only in NC, SC, GA, VA and TN (some areas of FL, as well).
As part of our business practices, we also serve as consultants for investors guiding them to network with other investors and educating them in locating and structuring transactions. Rarely, if ever, will you find a hard money lender willing to invest in your success like Carolina Capital Management.
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Bill Fairman (00:04):
Hi everyone. Bill Fairman here with Carolina Capital Management.
Thank you so much for joining us on the show today. I want you to please like
and share us with your friends and get the word out. We also have archive
videos. They are either going to be at the top of the page, at the side of the
page, or the bottom of the page, depending on what platform you are on. So,
another frequently asked question that we get is about the market. You know,
they want us to use our crystal ball. You know, I have been in the business for
30 years. None of us know what is going to happen, but you need to prepare
yourself for the worst. You always need to look at what is the worst thing that
can happen. And one of the things that are true, actually, there is two things
that people need. And I always say the same thing over and over again.
Thank you so much for joining us on the show today. I want you to please like
and share us with your friends and get the word out. We also have archive
videos. They are either going to be at the top of the page, at the side of the
page, or the bottom of the page, depending on what platform you are on. So,
another frequently asked question that we get is about the market. You know,
they want us to use our crystal ball. You know, I have been in the business for
30 years. None of us know what is going to happen, but you need to prepare
yourself for the worst. You always need to look at what is the worst thing that
can happen. And one of the things that are true, actually, there is two things
that people need. And I always say the same thing over and over again.
In any economy, people need two things. They need food and
they need shelter. And when you are in the real estate game, whether you are
fixing and flipping or whether you are buying and holding, or investing in
multifamily, or investing in commercial property for that matter, you are always
looking at what would be the most liquid of the groups of real estate and what
would be the most valued by the most people. So if you are looking at the
luxury market, there is only so many people that can afford to buy a luxury
home. And when the economy, those take a dip, you know, obviously those luxury
homes lose a lot of value because you are limiting who can buy them from you
when you sell them. At the same time, commercial properties are very similar.
If you have a, what we call a special purpose or a single purpose type of a
property. And I will give you an example.
they need shelter. And when you are in the real estate game, whether you are
fixing and flipping or whether you are buying and holding, or investing in
multifamily, or investing in commercial property for that matter, you are always
looking at what would be the most liquid of the groups of real estate and what
would be the most valued by the most people. So if you are looking at the
luxury market, there is only so many people that can afford to buy a luxury
home. And when the economy, those take a dip, you know, obviously those luxury
homes lose a lot of value because you are limiting who can buy them from you
when you sell them. At the same time, commercial properties are very similar.
If you have a, what we call a special purpose or a single purpose type of a
property. And I will give you an example.
A drive-up a fast food restaurant, like a Sonic for
example. I mean, what else does that property going to be if that Sonic goes
out of business? You are going to have to do major remodeling. You are probably
going to have to knock it down and put up some other type of structure. Again,
you are limiting who is going to be interested in buying that. So not only are
you going to have to discount the price quite a bit, to unloaded it quickly,
but you are going to have to hold onto it for quite a bit of time without
getting any income on them. So this is why I have always tried to focus on the
affordable housing market. Now, every market is a little bit different, but in
our area, in the Southeast, you are single family, you are looking at, you
know, around 300,000 or under, that is going to be your affordable housing
market.
example. I mean, what else does that property going to be if that Sonic goes
out of business? You are going to have to do major remodeling. You are probably
going to have to knock it down and put up some other type of structure. Again,
you are limiting who is going to be interested in buying that. So not only are
you going to have to discount the price quite a bit, to unloaded it quickly,
but you are going to have to hold onto it for quite a bit of time without
getting any income on them. So this is why I have always tried to focus on the
affordable housing market. Now, every market is a little bit different, but in
our area, in the Southeast, you are single family, you are looking at, you
know, around 300,000 or under, that is going to be your affordable housing
market.
And then in your multifamily space, you are looking for
units, you know, one, two, three bedroom units that are going to be somewhere
in the 150,000 per unit or under in a price range. And why is that? Well, as
markets go up, people in the rental space are going to want to start buying
homes. And they are going to be buying homes that are, you are going to have to
be in the lower price range because if you have been renting you typically,
while your payments are gonna be lower, you typically do not have a down
payment or at least a high enough one and you can still get down payment
assistance and still be in, you know, affordable spot with the single family
homes. As the economy starts to go down, economies are going to do that, I mean
everything is circular. And eventually, you know, right now we are doing well,
I expect us to do well for going forward.
units, you know, one, two, three bedroom units that are going to be somewhere
in the 150,000 per unit or under in a price range. And why is that? Well, as
markets go up, people in the rental space are going to want to start buying
homes. And they are going to be buying homes that are, you are going to have to
be in the lower price range because if you have been renting you typically,
while your payments are gonna be lower, you typically do not have a down
payment or at least a high enough one and you can still get down payment
assistance and still be in, you know, affordable spot with the single family
homes. As the economy starts to go down, economies are going to do that, I mean
everything is circular. And eventually, you know, right now we are doing well,
I expect us to do well for going forward.
But you know, you are going to have a downturn and you
could always have what is called a Black Swan Event, some kind of political
unrest or something that causes a downturn in the economy. But that said, you
are going to capture people on their way down from the luxury market and times
that are tougher and you are going to capture people going up that are
improving in up markets. And that affordable housing space is always going to
be full. Same thing with self storage. It is kind of a hedge against itself.
You are capturing people on the way up. They are buying more than they should
because we are very, our consumer economy is we keep buying stuff and we have
self storage places because we run out of place to put our stuff. We do not
want to get rid of it. So as people are moving their way up, they are filling
up these self storage units. The other is true when the economy goes down and
you are having to downsize. You are getting these units to store stuff that is
not going to be able to fit in your new, smaller house.
could always have what is called a Black Swan Event, some kind of political
unrest or something that causes a downturn in the economy. But that said, you
are going to capture people on their way down from the luxury market and times
that are tougher and you are going to capture people going up that are
improving in up markets. And that affordable housing space is always going to
be full. Same thing with self storage. It is kind of a hedge against itself.
You are capturing people on the way up. They are buying more than they should
because we are very, our consumer economy is we keep buying stuff and we have
self storage places because we run out of place to put our stuff. We do not
want to get rid of it. So as people are moving their way up, they are filling
up these self storage units. The other is true when the economy goes down and
you are having to downsize. You are getting these units to store stuff that is
not going to be able to fit in your new, smaller house.
I laugh about that because I have a storage unit myself.
We talk about $500 worth of stuff that most people keep in a storage unit for
three or four years paying, you know, $100 a month for their $500 worth of
stuff. But my $500 worth of stuff, it was really special. It has to be in a
heating and air conditioned space. So I pay more for it. But my $500 worth of
stuff is nice and comfy in all temperatures. So again, no matter what industry
or what space you are in, whether it is rental or fix or flip, you want to just
concentrate in the affordable housing space and you do not have to worry about
booms or busts that you are going to go through. Your downside is much lower than
it would be in some of these other spaces. Okay. So, thanks again for joining
us. Do not forget to like and share, we have a video archives again in
different places above, below, or beside of us, depending on what platform.
Have a great day. Bill Fairman, Carolina Capital management.
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http://thealternativeinvestor.libsyn.com/bill
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We talk about $500 worth of stuff that most people keep in a storage unit for
three or four years paying, you know, $100 a month for their $500 worth of
stuff. But my $500 worth of stuff, it was really special. It has to be in a
heating and air conditioned space. So I pay more for it. But my $500 worth of
stuff is nice and comfy in all temperatures. So again, no matter what industry
or what space you are in, whether it is rental or fix or flip, you want to just
concentrate in the affordable housing space and you do not have to worry about
booms or busts that you are going to go through. Your downside is much lower than
it would be in some of these other spaces. Okay. So, thanks again for joining
us. Do not forget to like and share, we have a video archives again in
different places above, below, or beside of us, depending on what platform.
Have a great day. Bill Fairman, Carolina Capital management.
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