Main Event 5:00 Free light dinner and Networking in the Round: Table Topic Discussions 5:30 Break Out SessionsAsk The Pro Real Estate 1016:20 Guest Session - a "Must Attend" for non-member Guests.06:45 Main Event - Why 2024 Will Be the Year of the Small Real Estate Investor with John Burley
Why 2024 Will Be the Year of the Small Real Estate Investor
As we begin 2024, as a fellow Real Estate Investor, I am extremely excited. Here is why:
Rising Interest Rates; Prices Dropping; Limited Inventory; Properties on the Market Longer; Wall
ST and I-Buyers on the sidelines (just taking a breath really); Money Supply Drying up for
wholesalers; Investors with flawed models dropping out and quitting like crazy; and FEAR
throughout the market, FEAR.
So, you may ask, why is this all good? Because these are the exact market conditions where
the Great Investors make their money and, more importantly, keep it! Most people like to do
what everyone else is doing. Especially in RE Investing. Just a year or two ago, how many
people were flipping and wholesaling? How many people were clamoring to do hard money
loans? How many people were lining up and over bidding for the privilege of paying more than
ever before for properties? That’s right, lots…and lots…and lots.
Now, it has all changed, people are afraid of what the market and interest rates and the
economy will do. So, many are paralyzed and stuck in fear. Yet now, is when the high-end
professional investors are moving in. I have been doing this since the late 1970s. I have been
through 5 full cycles of the markets moving up and then down. I have invested with interest
rates at 18%. There is very little I have not seen, nor done, while completing thousands of Real
Estate Transactions. And if there is one thing I have absolutely learned and integrated into my
Real Estate Investors Soul, it is this:
Contrarian Investing is the way to go!!!
Right now, we are at the precipice of one of the great Real Estate Investing Opportunities of
your lifetime. The only question is what will you do with it? The great investors of history. The
ones who actually make money in not just up markets, not just flat markets, but also down
markets, have one thing in common. For years, and then decades (I am over 40 years in the
game now), is that they look at it from a contrarian point of view. When RE is in favor they are
scaling down, paying off bad debt and building up a war chest, you know, like all real
businesses that succeed for the long-term do.
When RE is out of favor they are jumping in with both feet. BUT they are not doing what
everyone else is doing, nor are they running the traditional RE Education Models. No, they run
it like a business. And for that they understand that by far (not even close) the most important
thing in Real Estate is not Real Estate. It never has been, nor will it ever be. The Most
important thing in Real Estate Investing is MONEY. With Money and the ability to Borrow, Real
Estate is very easy. Without Money and the ability to Borrow, Real Estate is very hard. Yet
almost every RE Education Program avoids the truth and spends most of their time trying to
figure out how to do Real Estate without money, even though everyone knows it takes money.
We cut right through the nonsense and the noise. Rather than do what everyone else is doing,
we address the Big Truth of Real Estate Investing Head On. We work on raising money, lots of
money, first. We will show you exactly how to Raise It with all the details. And since my
background is from the World of Wall ST, I show you exactly how to Raise the Money, Get Paid
to Place it (we get paid $10,000 upfront on every property), How to Buy it, How to Maximize
Returns for the Long-Term and how to Monetize to the point where realistic expectations are
that you will earn back the price of the property in its entirety within 10 years. For example, on a
$300,000 property, we make over $300,000 over 10 years. I will show you that in detail on
Saturday Afternoon!
In the “Burley Model” our Cost of Money is just 4%, and that can be
your new reality. Can you make money at 4%?
But John, aren’t we going to have another Big Crash like the news and all the YouTube and
podcast gurus are saying? The answer…an emphatic NO!
The 7 Major Reasons why we are NOT about to repeat 2008:
1) Great Crashes only happen once every 60-90 years. They happen not because of
wars, or great economic turmoil. They primarily happen because the people who went
through them the last time are now dead. Their children and grandchildren ignore the
lessons and thus they repeat yet again, a Great Crash. It is not that history, perse,
repeats itself, rather it is that most people forget history and thus they repeat the
mistakes of the past. And while there are charts that go back thousands of years that
vet this out, here in the US, since 1765 we have had only 4 Major Crashes. They were
in 1790, 1872, 1932 and 2008. Way too many people who have a major hand in the
game still remember 2008 and its history. Thus, we are not set up for another
Depression, or Great Recession as the politicians liked to call it!
2) Wall ST. Wall ST in modern history has bought and funded the good debt (government
insured loans). This is good. In the early 2000s they got greedy and jumped in with all
the other (fools?) and bought the bad debt, the results were catastrophic. This run, Wall
ST got greedy again, but instead of buying debt, they bought the asset! Completely
different, they are in, but now they are owners not lenders. This automatically adds
stability and raises the bottom. The toxic loans, in large numbers, that were
commonplace in the 2000s simply no longer exist in any substantial number.
3) Debt-to-Equity. The debt-to-equity numbers in America have never been better in
modern history. The average home debt to equity ratio is just 42%. That means there is
over One Trillion Dollars in Equity. Massive record levels, the exact opposite of 2008.
There is no large number or “The Tsunami” of foreclosures that so many “Influencers”
and “Seminar Land” people are always talking about. The factual “distress” numbers on
loans simply do not match the all too common “doom and gloom” of the prognosticators.
4) “Mom and Pop” Real Estate Investors. In 2006, it was normal for a small RE Investor
to have 5 properties in a place like Las Vegas. They had a total of $10,000 all in for 5
properties. High Interest, High Leverage, “Liar” Loans. A normal scenario was
$1,400/mo. PITI and $1,200 rent and 3 were vacant! This was an easy walk away as
they had no “skin in the game” and were losing money every month while being
underwater. Today, that same Investor would have $400,000 real money as “skin in the
game”. Their payments are $1,200/mo. PITI and they rent for $1,800/mo. and they are
all rented! A very different scenario. Like Wall ST long term positions the small RE
Investor is not walking away from their “skin in the game” cash and positive cash flow,
just because the value goes down. They will sit and wait for the market to recover, while
cash flowing. Again, nothing like 2008.
5) Supply. In the mid-2000s we had a glut of oversupply. Massive overbuilding and
speculation by poorly trained Institutions, Investors and Homeowners who let their
emotions get carried away, led to such a large inventory that it was not a question of if,
rather when, it would all come tumbling down. Today, it is the exact opposite, most
areas have a housing shortage and are vastly undersupplied. One of the big reasons
why it took so many years for prices to correct after 2008 was the oversupply of
properties. There were simply not enough families to occupy the properties at any price.
6) Homeowners. This is the bedrock of the housing market. Well over 60% of all homes
are owner occupied. As they go, so goes the housing market. Before the Big Crash of
2008 they were as a whole, overleveraged, many had “toxic loans”, interest rates, for
most were in the 7-8 to 10 percent range. And many, many loans were made without
proper due diligence or underwriting. The end result, families had financed far more
than they could afford or pay for which of course resulted in the “Tidal Wave” of
foreclosures and short sales in numbers never seen before or again. Fast forward to
2024 and the homeowner, as a whole is in an entirely different position. Most are sitting
on record levels of equity. Their loans are in the 2.5-4% range, with many paying them
off on 15-year rather than 30-year models. Their payments are lower than rent, and they
could not afford to buy today what they already own. Stable and secure would be the
two words that best describe where most American Homeowners are today in relation to
their Home, payment and debt situation.
7) The Economy. Most of America is currently in a “soft” economy. Inflation is up, interest
rates are higher than they were a couple of years ago, although they are actually still
below historical norms. For middle class America there is virtually no unemployment.
Because really, if you are middle class, there is no shortage of jobs, just a shortage of
people who want to work. A softening in the economy, certainly, a decrease in the
standard of living for “normal” people, absolutely. A Great Crash? Quite simply, there
are no indicators that justify such sensationalized “fear mongering”. It simply is not so.
Because of these 7 Major Reasons I do not believe we are even vaguely looking at a 2008
repeat. Equity Markets, such as residential Real Estate have always trended upwards.
However, they do it in a natural, repeatable cyclical manner that generally runs from 10-14
years. They go through growth, prosperity, recession and then depression (if a politician
says the “R” word, it is probably a depression). Repeating over and over. The new highs
are generally higher than the old highs, and the new lows are generally higher than the old
lows.
This is why seasoned veterans, like me, who have not just been through the downturns and
survived, but actually thrived, like we did in 2008-12 during the “Great Crash” look at this as
a tremendous “window of opportunity.” Now is when we begin to raise the money, earn the
$10k placement fees, make our cost of money 4% and find the great deals and remarket for
big profits.
At the evening programs we will show you the exact presentation we and our students have
used to raise and place billions of dollars. This is a proven model that we have been using
for over 30 years.
On Saturday we will dive much deeper and do even more Q &, A. I guarantee that you will
walk away with far greater skill sets and tools to make 2024 your best year ever!
I look forward to working with and meeting you at the upcoming events.
Thank you.