Billion Dollar Blind Spots

Hey there. Welcome back to Billion dollar blind spots, where we help people capitalize and recognize the billion dollar blind spots in their life and their business to this episode is actually, we're recording this in December. I had a great conversation with a guy this morning, believe it or not in the hot tub about downsizing from his house. He's in his sixties, his wife is in her fifties. And you know, they're talking about finally getting kids outs the house and downsizing and what is the plan? And I said, you know, it depends on the timing. It depends on what you're trying to accomplish. And he said, well, what do you mean? I said, you know, go to real estate when you're downsizing, you got to kind look at what's going on. If you're trying to time the market, you got to look at it from a standpoint of what cycle are we in, in the market.

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And where's it going when you look at a cash out. So for him, he has a four bedroom, two bath, and he go lives in, you know, in a, in a local town by me, you know, his kids are out and it's just him and his wife. So half of the house, they don't even see it most of the year, unless those kids come over for the holiday. So at this point, he's thinking, okay, if I downsize outs this house, I still wanna stay in the area. Cuz my wife still has a few years of working up here. Maybe we can get something smaller and take our chips off the table. He says, you know, Sean, what's the big deal. If we do it now or we do it five years from now or 10 years from. And I said, well, you know, ironically enough, real estate goes in cycles.

So those cycles are usually eight to 10 year cycles. So what are we looking at right now in December the 20th of 2021? So we're in the process of going COVID 19, we're going into another cycle. COVID 19, but we still have the likelihood of, you know, and going into the first January, things are gonna come a little bit. We're gonna go back to some sense of so, so and normalcy, we also heard that the federal chairman mentioned that they're looking to do three interest rates over the next over the next year in 2022, every time interest rates go up, prices go down. So you got to kind of look at those things and say, all right, first of all, what do I need to know? I need to know what my properties were today and today's market. Then what you need to do is lined out what your property is estimated to be worth over the next three years, five years, 10 years, depending on when you're looking at, when you're looking to cash in your chips, why do I say a 10 year cycle?

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Reason being is real estate goes in about a 10 year cycle. So if it's going up now and it starts to go down, it's gonna go down for about 10 years before it comes back again to where we are now or lower or higher. So how do we know when that's gonna happen? Well, here's a good, here's a good analogy for you. Two. You guys have heard me say this before 2008, we had 2 million people outta work with financial and real estate debacle. Most of those people went back to work. Most of those people were inspired to purchase homes by the government. But at the end of the day, during that period of time, we had, we had over 800,000 properties that were in some court, some sort of a distressed property situ somebody that I either was late on their mortgage or didn't pay their mortgage at all.

And they were in what they called the shadow inventory. The shadow inventory is distressed properties that we're not aware of because there is federal memorandums in courts that limit financial institutions from putting foreclosure actions on people that are late on their payments or in a financial distress situation. So when those got lifted in, in eight, 2008, early 2009, we actually saw that 800,000 properties come into a market, which was already depressed by 40 to 50% in sales and volume and went down an additional eight to 10% as a result of introducing almost 10% of the annual amount of sales into a market in less than 90 days. That's right. When you introduce 800,000 properties into a market that only absorbs 6 million properties a year, you got, it has to go somewhere. It's like trying to take, it's trying to, trying to put 10 pounds of poop in a five pound bag.

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It's gotta go somewhere. And the problem is when you do that, it actually deflates the value on and reduces the values of the properties. Okay. On. So in during 2008 and nine, the properties went down, you know, how long does it take for him to come back? Anywhere between seven to 10 years is about. And I usually say eight to 10 years is, is normal. Before we see when go from flat to flat, if you will, or top to top. So if we fast forward now, 2021, like this gentleman was saying to me this morning, he says, you know, my wife's still got 10 years to go. I said, you know, you may be better off just sitting on a house for now, or there's a couple other strategies that you can do. And he said, well, what do you mean by that? Sean? The reality is going into 2022.

There's a good chance. We're gonna see properties go down anywhere from five to 10% from where they are now. We're at all time highs based on just as a result of the COVID. We've had 15 buyers for every one house that comes into the market. And now that's starting to stabilize. We're actually starting to see properties, not sell. We're starting to see properties get reduced in price. We're seeing people negotiate home inspections where they didn't negotiate before they would just ignore it. So when we start seeing those signs, that's like seeing the storm coming across the ocean long before it hits the beach, you know, in New Jersey, we always joke about it. You know, the tourist actually stay on the beach long after the storm is already almost on time. Hoping them in the beach. When you see the, when you see there's a storm coming and you see the locals getting up and leaving the beach in herds, we people like all the tourists look around and go wonder what they're doing.

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What the, what the locals see is they see the storm coming across the ocean miles away, you know, real estate professionals can see the storm coming. So how do you prepare yourself? You know, I, I just wanna finish that concept of know in 2008, we had 2 million people out of work, 2 million people out of work in 2020 19, 2020, we had 20 million people out of work. And we were also paying people to stay home. We were paying them more to stay home than to go to work. So those people figured, you know what? I'm already distressed on my property. I already can't pay them worries, but I'm gonna stay home anyway because the government is paying me to stay home. So guess what? Early 2022, we're gonna see where the government's gonna pull back. The memorandums that are limiting people, limiting the financial institutions from foreclosing on those people.

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Once they start to take lift those memorandums, you're gonna see anywhere between 1.5 and 2 million properties that are gonna be distressed properties. So if you're planning on downsizing and you're planning on moving down, the know let's buy a down the shore or something, here's a strategy you might consider is getting an equity line of credit on your house. Now because it's at an all time high waiting in six months to a year to find the perfect home, to downsize to that one or two bedroom condo or whatever you want in this area and buying it now and renting it for as much as you're carrying it. Cuz if you're gonna, you're able to buy it cash in some cases, or you're able to buy what a substantial down payment. In most cases it's gonna pay for itself just from the rental value of that property.

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And while that property, while you're waiting for your property to, to make the decision to move over the next eight to 10 years, your property may go down in value. But over the next eight to 10 years is probably gonna come back up with the normal cycle of the market. And what's interesting is when the market comes back up, you're also gonna be able to collect. You're gonna be able, gonna be able to collect the income from that property. And when you finally do downsize, you have some place to go and you can make a decision very quickly and very easily. And you could become a, you know, what they, what they would call a, you know, highly motivated cell or when somebody makes you a good offer, you can actually just pull the trigger and say, you know what? I have a place to go to.

Another thing is you want to know is you want have somebody like myself or somebody on our website. We offer a tracking system where you could actually put your property in there and we'll send you an update of what your property is worth every six months, every year, every three days, every five days, every 10 days, whatever cycle you want to know, or our system will automatically send you a price, an evaluation of your home and an estimated value of the home. Now is that exact? No, it's an algorithm. It's a computer that generates that report, but it's gonna get you close and it's at least gonna keep your finger on the pulse of the market. If you actually align yourself with a couple of people, which is gonna be one, you're gonna align yourself with a good finance planner that can help you to look at all the numbers as a whole.

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The next thing you're gonna do is you're gonna look at finding, you know, your, your tax accountant, who may be the one in the same may not be. The other thing you're gonna look at for is you're gonna be looking for a real estate broker that, or, or find or real estate strategist like myself. That's gonna be able to give you the information to keep your finger on the market and your pulse of the market. So you'll though, if the market is gonna take a severe downturn, you may wanna sell before you may wanna cash in your chips. At the end of the day, timing, the market is probably dangerous, but the reality is you can prepare yourself and get a staff of people to help you. It takes a village, right? You've heard that. So in, in, when you're thinking about downsizing, who's the first person you talk to your financial planner, the financial planner is gonna say to you, Hey, let's look and see what your, your portfolio is worth in your portfolios, your house.

And they're gonna say, well, you know, let's go find out what your house is worth. They may even ask you what your car is worth. They may ask you what your jewelry is worth. They may ask you what, you know, if you have a, if you have a classic car collection, they may say to, Hey, what is the collection worth in today's market? And do we think it's gonna go up or do we think it's gonna go down? Are you gonna take those at a great with you? Are you gonna give 'em to your kids? Or are you gonna put 'em in some kind of a state you may also want to talk to, if you have income of over five, 10 million, 20 million in your family estate, between your stocks, your house and everything you may want to consider con talking to and estate planner, who can actually figure out if you should have a living trust or some kind of you know, a survivorship of what happens to the money when you pass.

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I know it's a more big kind of conversation to talk about. What's gonna happen in the inevitable, the inevitable or death and taxes. You're gonna have to pay taxes and you're most likely gonna die. So in the event that that does happen, what does it look like for your you and your family and your kids? So again, let's do a little recap. If you're thinking of selling your house and downsizing. If you're looking to do it in the next one to three years, one to five years, you probably wanna do it now because you're probably gonna get more for your house now than you will in, let's say in 2000 and 2031, if you're thinking of doing anywhere between eight to 12 years from now, you might wanna wait. You may wanna wait out the market, be you're gonna have to live somewhere for that period of time. You're already

Comfortable. It'll give you time to actually get your house ready for sale. You'll also know when the market is coming. You'll have a good heads up on when to do it. It'll also give you time to plan your next step. So it's really hard. When we help people sell their house and they have no place to go, but if you have some place to go and you have a plan in place to get you to the next jump, it's always better to plan things out. We look see you on the other side. Hopefully this helps you to make that decision of if I'm gonna buy, if I'm gonna sell now or sell later. And by the way, buying something now is not a bad idea either. I would just wait until after the first of the year for you to buy something, especially if it's gonna be your vacation home or your retirement home, if you need help, what us just paying us on our website, or you can just check me out. My name is Sean sch. I'm the host and I look forward to union inside billion, blind spots, where we help people discover and capitalize on the blind spots in their life and their business. Sean Sal, your friend, your neighbor, your real estate expert. Talk to you soon.

Sean Shallis your host, the billion dollar blind spots today, we're going to talk about one of the blind spots that happens every year during the holiday season. It's December 7th. When we get on the phone, we're talking to people in the morning about selling their house or possibly considering moving or something like that. The first thing we usually hear is we're going to wait until after the holidays. Nobody buys homes during the holidays. What's interesting is when you look at the chart and you look at a year over year chart during December and January and February, we have exit much activities we do in July and August. And the reason being is because, you know, it's appealing to our blind spot. The people that actually are buying homes actually get large chunks of cash toward the end of the year. They're usually getting bonuses or they're getting their tax returns, or are they getting something that's going to help subs subsidized their down payment where the money that they're going to use to acquire that house?

It's also interesting too, is is that when people are waiting in order to put their house on the market in January, February, March, April, the funny thing is, is sales go down. I actually, for those at that particular time of year, the amount of transactions that goes down almost 10% across the, across the month over month. So what's interesting is you're going to introduce more inventory, which the more inventory you have, the less your property is going to be worth into a market where you're going to have less activity. So if you have more inventory and less activity, do you think your price is going to go up or down? Of course, it's going to go down. So, and ironically enough, when does this start to pick up again, September, October, November. So the hottest time of year to get the top dollar for your home starts and around.

So at the end of September, and it goes all the way through April and again, why does that happen is because people are changing jobs. People are getting warrants to down payments as a result of, you know, bonus season or, you know, cashing in on the stocks or trying to do something before the end of the year, before it triggers it some kind of a tax event. So if you're thinking of putting your house on the market, somewhere in the March and April and may, you're actually pushing your house into the wind. I mean, it's like you're bringing inventory, you're bringing sand to the beach. And when that happens, it actually has an adverse effect on your price. So if you really wanted to get your house sold for the highest possible price in the shortest period of time, with the least amount of stress, the time to do it is in the last quarter of the year, between September and April on our professional opinion and our experience of selling over 2,500 homes in the past 25 years. If you want to find out more about a billion are blind spots in your business and your life, give us a call, let us know if you can. One of our guests on our show, you can actually get in touch with us [email protected]. Check it out on our podcast. Thanks a lot. And talk to you soon!

Hey there. Welcome to the billion dollar wise buys where we actually help people, individuals and companies discover the wine sponsor business and their life actually fine. A way to actually change their life, change their business, and go from just getting by quantum jumps in quantum leaps in their business. If you want to find out more, stay tuned, as you're going to learn about in today's episode, we're going to talk about the real estate bubble what's going on in 2021. How's it similar to 2008. Let's find out introducing Sean, Charles, your host, the billion dollar blind spots. I am so excited. I actually talked to you today. I'm actually standing on the patio, looking at a billion dollar mark on the line when we're recording this, but I wanted to sit down and actually answer a bunch of questions that I can get from pastors and out buyers.

So over the past six months or four months going through COVID-19, without a lot of people asking us about what's going on in the real estate market and what has, you know, the swelling down is speeding up and it's still crazy. It's still 15 buyers for every one listing. Well, let's back up a little bit. Let's look at, let's look at the blind spot. That's actually happening right now in the real estate opportunity. So what do I mean by a blind spot in the real estate opportunity for those people out there that are saying, Hey, Sean, how do I get a view on how do I buy it? When I hear these stories about these guys that bought things on the 10 cents on the dollar. Now, all of a sudden they're selling them for a million dollars. I want you that well, you're going to be in a good situation for the next six to four months in my professional opinion.

Why do I say that? Well, if we back off a history repeats itself, okay, we go through cycles and those cycles are anywhere between eight to 10 years, 12 years. In some cases from peak to peak is what it's called. When you talk to analysts, I've studied it. And when I studied at NYU, I was in real estate analytics courses and it takes anywhere from eight to 12 years, you're going to have a cycle [inaudible] and in real estate, because we're such an inefficient market. If something starts to happen, now, it takes anywhere from 12 to 18 months for an actual to hit the papers are actually for us to recognize it in the news. So it's almost kind of like when you hear the, in the stock market, they talk about why in the rumor and soul news, same principle. So our cycle was a lot longer on a cycle than the cycle of your words.

I can tell you that, Hey, the stock went up 50% in the past hour. You can actually look at the ticker-tape and see it instantly. But this is with the real estate market. It's an education business. So in order for you to see the market shifting, you have to actually be in the market a hundred homo, the pulse of the market, or you have to be really close in tune with somebody like myself or another real estate professional. That's doing real estate on a regular basis. Now, when I say doing real estate on a regular basis in a real estate professional, I'm talking about somebody that's doing more than 15, 20 transactions a year, and not the average realtor in your neighborhood who doing what the five transactions is by the way, in the United States of America, the average person, the average realtor is doing anywhere between one to five transactions as a professional

Full-time realtor. What's interesting about that as you're representing it, in most cases, the representing 75% of those sales are representing a buyer. So they're really not on the marketing side or the sales side. They're more on the introduction and the, what I call them, you know, the Mary Kay side or the van await side of the industry, you know, they're basically showing and selling the properties. So let's take a deep dive into why am I saying there's a billion dollar opportunity right now coming in the next six to 12 months? Well, ironically enough, we go backwards in time and go back to 2008 and nine, 2008 and nine. We actually opened a real estate office, which is on [inaudible] it's in hole building a company. So I decided to keep going forward. We opened our doors in 2008, probably September, 2008, something like that instantly after we opened the doors, like six months later, the market had gone down 40% in sales.

45% was the average sell price, went down in volume. So we actually went through probably what I would call the financial, the bottle and the financial crisis of 2008 and nine. And during that period of time, we had one buyer that was qualified to buy a home at 15 houses on the market. Then when we were trying to sell the vast majority of those jobs were distressed situation. They were either upside down or short-sale pre-foreclosure or foreclosure. What's interesting is what we didn't know at the time was and what we do as professionals. But a lot of people didn't see it or didn't know it was, there was what they called the shadow with inventory. So what is the shower or the shadow inventory, real estate or properties that are actually out there in the market that people live in that are either 69 or 120 days leave, except that normally in an all market, the bank or a financial institution would actually file.

What's called a LIS pendens under 60 days late, which is basically a court action or a court letter. And depending on if you're in a shape where the real estate process is done by court order and somebody sheriff sale depends on which one you're in, but either one they have to, after 60 days, they're going to notify that person that, Hey, you're late on your mortgage. And if you're continuing to be late, we're going to foreclose on you. We're going to take your house. You know, what's interesting is we can ship track. Those what's called lose credit is being filed across the country. And it's a very, it's a very ambiguous, it's an important indicator or task of the market's income. What's interesting. During 2018, we have about two headlines. People go out and work in the financial model over there and showing off over the next two years, 24 to 48 months, those people, most of them went back to work.

So it wasn't, it wasn't that bad. Most of the people went back to work. Let's fast forward to 2020, 2019, 2020, the high Tacoma. What happened there is two 22 million people where I work again, 22 million people went out of work at the height of COVID. A lot of those people weren't going to work, whether by choice or because they didn't have a job offered to them. What do we mean by that? Well, during the period of time, a lot of these people actually got paid more, actually stay home than they were making when they went to work were slightly different. So they said, you know what, screw it. We're just going to say [inaudible], let's just say [inaudible], what's funny is a lot of people, not people back from work, we're going to still have these properties. The interesting thing is though, is the reason why we don't see that in the market right now is because we have memorandums.

Like they didn't 2008, the government stepped in and said, oh my God, this crisis was not people's fault. Let's give them a break. And let's put a memorandum in place that says we can't foreclose on these people, the bikes and the finance students get foreclosed on fully wet after they opened up the gates. And the whole back in 2008 months, not only the price has been a 45% and the volume of sales go down 45%, just from the financial model. It went down to the additional 5% in most markets in most markets in the primary areas like the tri-state area or the Metro areas like Metro markets. We saw prices go down anywhere from eight to 12% when those property came with the market. Now how comb, like you're talking in 2008, we had over 800,000 properties come into the market as a result of the shallow inventory.

So he heard a thousand properties. What does that end up in the grand scheme of things? When you're only selling 7.5 million home in the United States on a given year, these are already thousands of big chunk of property. What's interesting is if we do simple math, right? We had 2.2 0.5 million people out of work with 800,000 people that were in receivership or in some kind of distress situation that came into the market. So that's a pretty good, that's a pretty good chunk of people. Okay. Fast forward, 2020 19, 2020, we have 22 million people out of work. A lot of them not going back to work. What do you think the odds are that we're going to have anywhere between 1.5 to 2 million properties that our demand, some kind of a receivership or some kind of a distress situation. Now I'm not saying, hurry for them. Say when honestly, I mean, I'm sorry that snack, and then isolate.

I want to see a robust, healthy, real estate market. But if you're asking me where there's a blind spot, where you can have an opportunity capitalize on Morton and my professional opinion, that market is on its way. It's going to be anywhere between 12 and 16 months from now, 12 to 18 months probably is a better number where we're going to start to see those properties coming into the marketplace. We've already started that with the memorandums, but it takes time for those properties to go through the process. How long does it take? They're probably people in there and try and get them back and right the ship over the next 30 to 60 days after the memorandum, once they figure out that that doesn't work, then they're going to start to file some kind of legal action, which is a list pendants file. Well, they filed Elizabeth is that's going to be a 30 to 60 day window of time that that's going to give the bank before they can now go in and try to foreclose on them.

That process is going to take any work. I would say [inaudible] the amount of workloads that are going to hit the banking system and also hit the court system. So, you know, and then the jurors in a state where they do. So it's going to take the sheriff that whole, the process. So if you're looking for an opportunity in the real estate market, if you wanted to capitalize on the market, now, here's what I'm telling most of our customers, the people that are thinking of selling and wanting to find yours are better suited to sell that property. Now take the money off the table, put it on the silos because bear in mind during COVID-19 only 2008, where we had one buyer in 15 properties, where when you have that situation property to work-wise in COVID, we had one house for sale. 15 Myers is all prices up 15, 20% more than the rework intrinsic value of the home is even more.

So if you're the list that you're, you're smart and you hide a, see the, you see the storm coming across the, across the ocean before anybody else, if you're thinking that you want to sell that house for the next one to five years, selling now put the money on the sideline, wait, anywhere between 12 and 18 months, you can probably buy your own house back with 10 to 15% less than you're paying for now. That's right. In my professional opinion, you're going to see the market dip about five to 10%, depending on where you are, as you're on the outskirts of haves and your resort communities, you may see a bigger jump in prices, but again, you we'll get for an, the goal would be as you sell your house on the market and wait for the market to correct in the next 12 to 24 months, and then have the cash on the sidelines and be able to buy out the property or to actually ride the wave again, and then ride it for another six to eight to 12 years for that property.

Appreciate it again, and then go resell it. So again, if you're looking for a billion dollar blind spot, whether it's in your personal life, your business stay tuned on this point. Guess we're going to talk about holes in businesses and holes in your personal life that you just took. One little thing, one little tweak. You were able to change it and you can change your life. Change your ways in your business, your personal life. Hey, I'm Shawn shells. I'm your host at billion dollar mine blind spots, where we actually help you to discover the blind spots in your business, in your life to make the huge impact that help you to go from where you are, to where you want to be. Except we're going to shortcut the process and we're going to make a quantum jump in your business in your life. Look forward to talking to on the other side, Sean,