PODCAST EDUCATION

10 Markets On The Brink Of A Housing Crisis

Episode 024

John Larson and the Real Estate Cowboys talk passive income real estate investing.

Hear new episodes every Sunday morning at 8 a.m. The Cowboys talk about a recent Forbes article and the ten cities who are on the brink of a housing crisis.

Keep the #CowboyCoffee hot while listening to John, and the Cowboys talk about how to #BeACowboy and earn passive income in real estate.

Episode Transcript

Announcer: Have you thought about becoming financially free through real estate investing, but don’t have the time or knowledge to get started? Welcome to the Real Estate Cowboys podcast. Each week we discuss passive income investment opportunities in the red-hot Texas market. John Larson and the Real Estate Cowboys will show you how to leverage their team to build wealth in real estate through passive investment opportunities. And now here’s John. 

John Larson: Hey there, Real Estate Cowboys, this is your host, John Larson. Welcome to another week of the Real Estate Cowboys podcast. This week we are going to talk about something that I’ve been talking about quite a bit on the show, and I’ve been talking about quite a bit over the last couple of years. I feel definitely that a recession here is looming and a shift in the housing market is definitely upon us. I did a podcast a few weeks ago where we talked about some US cities, major US cities that are potentially on a housing bubble. Forbes just came out with a list of 10 cities that they believe are on the brink of a serious housing crisis. And it really caught my attention because a lot of these cities that they mentioned in those top 10 are cities that I’ve been worried about; a city that I used to live in.  

And in my experience over a decade in real estate, you know, I’ve been through the last recession which was just really detrimental. A really tough one. And I don’t feel like we’re headed for another recession like we had back in 2007, 08 and 09. But I definitely think we’re going to see one that is close to it. And basically, the reason is that the home prices have gone up so high and we’ve actually been in a pretty long span now of a pretty healthy economy and healthy housing market to where, you know, it’s just bound to happen. We are going to hit a situation where the housing market’s going to shift, and like I said, it’s because prices are rising in a lot of these middle-class neighborhoods and your target market who is looking to move into those neighborhoods just cannot afford the properties any longer.  

And that is what’s going to result in foreclosures and people losing their home because they just can’t afford it. And it also is going to cool the market because people aren’t going to be actively looking to buy in those areas because the prices have just ran up too high. So we’re definitely coming into a correction and and it is coming soon and it is going to really hurt the cities that don’t have the diverse economies and don’t have just the economies in general to support rising prices. Because you’re not seeing rising wages with those cities, the cities population and yet the homes are going up. The home prices are going up, so there is a correction coming, and I’m doing this episode so my listeners out there who are investing in cash flowing properties and are looking for cash flow and chasing cash flow in some markets that they wouldn’t have normally invested in five, six, seven, 10 years ago. They’re looking to invest there now because they’re chasing this high rate of return and high cash flow on paper. But you need to caution yourself that these are also the areas, these “high cash flow areas”; they’re not areas that have that stable, diverse economy and things are not going to go well there for ever and foreclosures are going to happen. Which are going to result in vacancies as well? Because I saw firsthand living in Detroit and living in the Midwest. People were fleeing the Midwest and fleeing Detroit for more thriving cities in America like Dallas, Fort Worth, Houston, Austin, et cetera. They were moving to these cities because the economies were good there. There were jobs that were more diverse and so when the economy took a shift, and the housing market took a shift, they can no longer afford their property. They were losing their homes. There were no jobs; they left. And so the cities that hit this top 10 list, it was actually quite interesting, are many cities that, if you listen to my podcast and listened to my episodes, I’ve mentioned these cities quite often as danger zones, cities to look out. Uh, cities that you should definitely maybe take a wait and see approach in the next 18 months. The values of these properties could drop drastically and then you can go in and get really good deals on homes. I feel that today you are just really overpaying for properties and some of these cities that are on this list. And so you know the epic housing bubble and crash of the first decade of the two thousands is finally starting to recede into history. However, remnants of the havoc it wrought can still be found in many cities. And so many of these places are showing some unnerving signs of the housing crisis on the horizon.  

So a recent housing study has analyzed more than 50 major US cities to determine which places are suffering from the worst housing troubles. While affordability issues are usually the most obvious sign of an impeding housing crisis, the study looked at a little bit more subtle and underlying indicators. And these were sourced from Zillow, and so these five key indicators were a percentage of homes with mortgages in negative equity, total number of homes in negative equity, total number of homes at least 90 days late on their mortgage payments, negative equity, delinquency rate, and homeowner vacancy rate and rental vacancy rate. And so in major cities across the country, the number and percentage of homes that were “underwater,” which are homes in where the amount owed on the mortgage loan is higher than the market value of the house, they’ve gotten disturbingly high.  

And so let’s use Chicago, for example, the third largest city in America with a population of 2.7 million, close to 70,000 homes are underwater on their mortgage, amounting to nearly a quarter of the homes with a mortgage. So that is very disturbing. And despite those alarming stats, Chicago isn’t even the city that’s in the most potential danger. I mean, that is an alarming stat that I just read, and Chicago isn’t even number one on this list. And so when you’re looking at increasing negative equity and vacancy, many major cities don’t just have high rates of negative equity, their percentage of homes underwater, uh, actually increase year over year. Birmingham, Alabama is a prime example. Uh, seeing its proportion of underwater homes go from 19 percent in Q4 of 16 to 30 percent by Q4 of 17. It’s an 11 percent year over year rise. That is staggering. And so high homeowner and rental vacancy rates also plague many of these cities. Birmingham has one of the highest rates of rental vacancy at almost 13 percent. Another deep south city, New Orleans, follows closely behind with almost 12 percent rental vacancy rate. It also suffers from high homeowner vacancy, too. Though Toledo, Ohio, and some cities in Ohio or even worse. So this has got to be you’re on your radar when you’re investing in properties. The last thing you want to do is go buy a home today in a market that just does not have a good stable, diverse economy. And then we go through a recession, which is looming, and you buy your property today for 80,000, 100,000, whatever it is. And the property now in the next 18 months is worth half that. It happened before it will happen again.  

So we talk a lot about on this show, the six ways that real estate pays you. It’s not just cash flow. I need my investors to be cautious, and you need to caution yourself that it’s not just cash flow. Do not go chase cash flow, because chasing cash flow is most of the time going to put you in a riskier market, a more volatile market, a market that is subject to down economic times. When we go through a recession where we go through a market re-correction. Because trust me it is coming. Oil and gas prices are going up; interest rates are following suit. That is a clear indicator for recession, and I’ve known this since early 2018; earlier this year. So it is coming. Now fast forward, we’re in September. I predicted at the beginning of 2018 that I felt that we were about 18 months away at least from another market re-correction.  

So this episode is just, I want to go through some of these cities that are on this list, and I want to just, this a warning sign. I just want to get this out in front of people so you do not make a bad investment decision moving forward because the last thing you want to do is overpay for a property, and then a year from now you’re going through a bunch of maintenance issues or you’re having a tough time renting the property because we go into a down economic time and people are moving from the city that you just invested in because there’s no jobs, right, and they’re moving out, vacancy rates are going up. You can’t keep your property leased. You want to dump the property; you want to sell the property. Well, you just paid $90,000 for it, and now it’s only worth $45,000 or 50, so you’re not even covering your mortgage in terms of what you could sell the property for.  

That is not a recipe for success. And many people will tell you out there, oh, well it’s a cash flowing property, and somebody is always going to be willing to rent it, and even if the property value goes down, it’ll come back up. Not many investors can weather that storm. If we’re going in through into a down economic time where property values are getting slashed in these major metros, there’s a good reason for it. And a lot of it has to do with the fact that the price is too high when the economy does not support these rising prices. And that’s what we’re getting ourselves into. So the last thing I want for my investors is to buy some risky properties in risky neighborhoods because the excel document said that there’s going to be super high cash flow that they can’t get anywhere else in today’s market.  

Like I have investors that are looking in Albuquerque, New Mexico, everybody’s looking back into Detroit. They’re looking into many cities in Alabama. These were not cities on people’s radar five, six, seven years ago. People were looking to get into Dallas. People were looking to get into some of these major cities that had booming economies. Atlanta. So you know, I still like a lot of cities in the Carolinas, North Carolina specifically. I know it just got hit by a hurricane, but there’s good opportunities there, and they’re still good opportunities there. You’re not going to get as high of cash flow on paper as you would in some of these other cities, but it’s going to be more stable investment for you. There’s people moving there for jobs. The economy’s doing well, the economy’s diverse. Those are the things that you need to look for because in Detroit we go through another economic depression, in Ohio, in Alabama, for sure, we start going through an economic downturn, people are going to be moving. You have less population in those cities to rent your properties. You are now putting yourself in a really bad situation, and you’re leaving yourself open to a lot of exposure, and then it just depends to you. How long can you weather that storm? If you’re buying these properties in neighborhoods that are just not very safe, they have very high crime. You can’t leave your property vacant for a long time because I promise you it will be broken into. It will vandalized. It will have some theft. You will have problems. If you can’t rent the property out and that property is just becoming a money pit for you, just light the money on fire that you were about to invest in Albuquerque or Detroit or Alabama or wherever it is.  

I’m from Detroit. I am a proponent of Detroit. I believe there’s good opportunities in Detroit. This is not the right time to buy there. 18, 24 months from now, you can get deals again. You can get properties at a good discounted rate. Right now. you are overpaying for properties. I promise you that there’s even some areas in the DFW area that I believe are overpriced. There’s middle class neighborhoods in DFW that I would avoid at this point because the middle class population looking to invest in those areas cannot afford those properties anymore. So that’s why you’re going to start seeing some slow downs in some of these areas that were once considered middle class that now the values of the homes have risen to where it’s upper middle class. Well the middle class demographic that’s looking to move into these neighborhoods, they just can’t afford it anymore. So what are they gonna do? They’re not going to buy it there. We’re going to see slowdowns. They are not going to buy properties that they can’t afford. Smart people will not do that. So maybe they’ll rent. Well, that’s great for us as landlords, but also we’re in Dallas where 150,000 people move to a year. 150,000 people are not moving to Detroit a year. 150,000 people are not moving to Montgomery, Alabama or Birmingham, Alabama or Memphis. They’re not moving to these cities. People are moving to Phoenix, the major cities in Texas, the Carolinas, Nashville. Um, people will always continue to move to California because of the lifestyle of California. But Denver, you know, these are the areas that people are moving. People are not moving into these cities. For what? What is the draw of Detroit right now? What is the draw of Cleveland? What is the draw of, of Alabama, Montgomery, Birmingham. There is no draw. You’re not bringing in new blood. So if you have cities that are dying, cities that are really struggling in a down economic time, you are going to have more people moving out than moving it. That is not a good recipe for a landlord who wants to keep their property leased consistently.  

And so when we come back, we’re gonna take a quick commercial break. I’m sorry, I went on a little bit of a rant there because I’m really concerned. A lot of my investors, even some of my investors who I thought a little bit smarter and more sophisticated, are now, I see them reaching into some markets that I don’t think are a good time to buy in and they’re doing it because they’re chasing cash flow. They’re not considering the six ways that real estate pays you. And that is going to result in a negative experience. So when we come back, we’re going to get into this 10 city list that Forbes put together. I thought it was very interesting and I thought it was very accurate as well. So let’s take a quick commercial break. When we come back, we’ll go through those.  

And welcome back from the commercial break. This is John Larson. We’re talking about about 10 cities this week that are on the brink of a serious housing crisis and this was put out by Forbes late last month. Uh, I just got ahold of the article and I was just reading it and thinking to myself, am I Nostradamus? Because more than half of the cities that are on this list are cities that I’ve been telling investors to look out for. And I’m not bad mouthing these cities there. There are good investment opportunities. I’m just telling you, right now it’s not a good time to buy. It’s not a good time to invest there because you’re overpaying for the property and we’re coming up on a market re-correction. It is going to happen. But you’ll see that the major cities across the U.S. like DFW, like Houston, who were not affected during the last recession, which was a monstrous recession; these cities were not really affected by that recession. You’ll see again in this next recession that these cities are not as affected because people are going to continue to move into these cities. There’s going to continue to be demand for property because of the jobs, because of the diverse economy. The issue with a lot of these other cities that investors are looking at to invest in for cash flow, they do not have the diverse economy. They do not have that economic backbone that can withstand devastating economic times, okay? And we’re running into a situation where the property values are far exceeding what they should be and people are getting upside down on their mortgage and so the five key indicators that were sourced from Zillow where we’re looking at signs of a bubble signs of a housing crisis were based on the percentage of homes with mortgages in negative equity.  

Total number of homes in negative equity, total number of homes, at least 90 days late on their mortgage payment, negative equity, delinquency rate, and homeowner vacancy rate in rental vacancy rate. So those first four things, those are all key indicators that there’s going to be a lot of foreclosures hitting the market. When the market is flooded with foreclosures, it greatly decreases the overall value for these for these areas and these neighborhoods, and if you’re buying C class properties in these neighborhoods, and these major Metros, there’s a good chance that your property is going to be on that list that is going to see significant decrease in value and your vacancy rate is going to go up.  

And the chance that you keep this property lease consistently is going to go down, which is going to increase the likelihood that the property is vandalized and broken into. So I’m just warning everyone listening to this episode. Be careful about some of these areas that you’re investing in today. You can get good deals in this market when we come out of the next recession, when the housing market corrects itself and we start over, we hit the reset button. There’ll be great opportunities in these markets. There is a time to buy in these markets. I stopped buying in Detroit in 2013, five years ago. That’s been in my rear view mirror. Five years ago I stopped and I still invest in markets like St Louis and Kansas City, and I’m not saying that these are recession proof cities either. Kansas City’s usually a city that is kind of on the tail end of the trends.  

Okay? so when recessions start popping up in Detroit and Cleveland and all these other major cities in the Midwest, Chicago, you’ll see Kansas city kind of coming up on the tail end of it. It’s not usually one of the first cities that’s going to get depressed or is going to run into a correction. It kind of lags, but these are also, St Louis and Kansas City, are cities that are susceptible to down economic times. And you’ll see vacancy rates go up and you will see situations where property values are inflated and they need to be corrected. That’s gonna happen. Kansas City market got real hot. Lot of investors there, lot of turnkey providers there, popping up because the numbers look great on paper. And and you know, Kansas City’s economy has gotten a little bit better. You’ve got about 20,000 people moving into that city on a year over year basis. But not enough to support the market where it’s at right now. It’s hot. Prices are high. Foreclosures are looming. They’re coming. In Dallas, I don’t feel like that. I feel like there are some areas in Dallas that were middle class where now I feel like the values have ran pretty high where middle class people can’t afford properties in these areas. And you may see some corrections in some of these suburbs in Dallas. But overall the city of Dallas can be fine. There’s enough jobs here. The most corporate headquarters in America are here. Dallas has added almost 720,000 jobs since 2010. No other city’s done that.  

That makes me feel pretty good and safe about my investments in Dallas. My investments in St Louis and Kansas City, probably not as good. Um, but I have a nice balanced portfolio that I can withstand some vacancy in those markets because I know I’ll still be able to consistently keep my properties leased out in Dallas. You will all see it all looks good and rosy on paper and the idea of buying rental properties in these markets sound good until we hit a crash,  

Until the market shifts, until the economy is not chugging along like it was, and people are moving from those cities in droves again. Then you will see the real picture of, oh shoot, man, I should not have bought that property. Or man, I bought that property at the wrong time. I was a little late to the party on that one. And this is just advice that’s coming from somebody that saw it firsthand. My family saw it firsthand. Other investors that I work with and talk with, other turnkey providers. I know just about everybody in this business. I work with the Kathy Fettke’s of the Real Wealth Network of the world. I work with the Real Estate Guys, Robert and Russ, I work with all these groups, used to work with Fortune Builders. All these groups that are guys that are smarter than me that have done more deals than me, and they’ve all told me the same thing. You know, they’ve experienced when the market goes down and it’s, it’s rough. You know, if you’re putting all your eggs in one basket where you know you’re buying properties in all these “cash flow markets” that, those markets cannot thrive where the values are right now, they don’t have the economies that support, it just doesn’t happen. So those are going to be the ones that get corrected first. So let’s get to the list.  

Ten, 10 cities and number ten on the list is New Orleans. That’s one that I talked about in my last episode where we talked about cities that were on the housing bubble. Um, and the reason being, you know, you have total number of homes underwater, almost 5,500; percentage of homes with mortgage in negative equity, 13 percent; percentage of homes underwater year over year over year change, almost two and a half percent. So, New Orleans, that’s also pretty much a city that we all know. You’re a sophisticated investor, you’ve been investing for a while. New Orleans is definitely a city that when the economy isn’t doing very well in the US, and we see a market correction, that’s definitely a city that’s, that’s hit pretty hard.  

Number nine on the list, Cleveland, Ohio. You have over, you have almost 14,000 homes underwater. Um, the percentage of homes with mortgage in negative equity is 30 percent, and the percentage of homes underwater year over year over year change. Actually it went down a little bit. Number 8, Memphis. You know, these, these cities that I’ve mentioned? Great cash flow markets look great on paper; affordable housing, lower tax to where the numbers look really good, but when things go bad, things are not going very well in these cities. So Memphis,; Tennessee total number of homes underwater ,over 14,000; percentage of homes with mortgage negative equity, 17 percent; Uh, Columbus, another city in Ohio is number seven. Total number of homes underwater, over 8,900; percentage of homes with mortgage in negative equity, 26 percent; year over year change is almost four percent. That’s alarming. Baltimore: total number of homes under water, over 25,000; percentage of homes with mortgage in negative equity, 30 percent; year over year change, over five percent.  

The city of Detroit hit number five right here in the middle. Total number of homes underwater, almost 5,000; percentage of homes with mortgage in negative equity, thirty eight percent. Just reading this, this is deja vu for me. This is exactly what we were seeing right before the last recession. And now I know a lot of investors, I have friends that produce properties in Detroit. I’m not trying to bash Detroit at all. It’s my hometown. I love it, but guys right now is a bad time to invest there. I’m just telling you, you’re overpaying for property. The percentage of homes with mortgage in negative equity is 38 percent. I guarantee some of those are investor-owned homes. So you have to be on the lookout for that. Chicago number four. So we talked about Chicago earlier in the show. Total number of homes underwater, almost 70,000; percentage of homes with mortgage in negative equity, twenty two percent. So this is just stuff that you have to take into consideration. We’re at a tipping point right now in the market. You’re either gonna, kind of do a wait and see approach, alright, or you’re going to continue investing in markets. Swallow your pride. You don’t need the cash flow. If you’re somebody that doesn’t need the cash flow, you still want to take advantage of the tax benefits. You still want to take advantage of the fact that these are cities with high vacancy, right? Or I mean, sorry, low vacancy. These are cities with low vacancy, so you know you can keep your property leased and why is there low vacancy? Because there’s jobs. So you’re going to continue to invest in the cities with jobs which is going to drive population growth. And even if we go through a market re-correction, sure, your property might not go up in value during that period, but it sure as heck shouldn’t go too far down in value. Alright? 

So if you’re an investor that wants to take advantage of the tax benefits, still wants to take advantage of leverage; people are still giving loans. The interest rate’s a little higher, but it’s still below seven percent. Still can get loans. Still get put business professional tenants in your properties if you’re buying them in the right neighborhoods and the right markets, keep them rented out consistently. You can still have that tenant paying down your mortgage. So it still makes sense to buy properties. You’re just gonna have to kinda, like I said, swallow your pride. The cash flow that was there five years ago isn’t there today. And don’t go chase markets just for cash flow. Because all those markets that I’ve been mentioning and that investors have been mentioning to me that they’re buying in for cash flow? They’re on this list, so we’re gonna take another quick commercial break. When we come back, we’ll finish off with the top three markets that are about to experience a housing crisis or are predicted to experience a housing crisis. We’ll be right back.  

And welcome back from the commercial break. John Larson here with the Real Estate Cowboys. Thanks for tuning in. We are talking about 10 cities that are on the cusp of a market re-correction. Uh, this was put out by Forbes. And we are on the final three, the third one here on the list, Birmingham, Alabama. This is one that’s somehow gotten popular with investors over the past few years. Obviously affordable housing, which is resulting in high cash flow on paper. Um, you’ve seen some prices go up in this market though, just like we have all over the entire US in a healthy market that we’ve had in this span of a healthy market has been longer than most. Um, but in Birmingham, Alabama, same, same results. You’re dealing with property values going up. The demographic that’s looking to buy in these neighborhoods or rent in these neighborhoods, they’re getting to a point where they can’t afford these areas. They’re getting upside down on their mortgage. This is going to result in foreclosure. So total number of homes underwater, almost 8,500; percentage of homes with mortgage in negative equity, 30 percent. So about one in three. Uh, percentage of homes underwater year over year change, 11 percent. That’s the highest on this list, Birmingham, Alabama. Number two on the list. This is the third city in this state that made the list, that is Toledo, Ohio. Uh, total number of homes underwater, over 12,000. Percentage of homes with mortgage in negative equity, 26 percent. That’s uh 2.2 percent year over year change. And number one, as we talked about earlier on the show from the, uh, article, total number of homes under water, 5,000. And percentage of homes with mortgage in negative equity, thirty two percent. So that actually now that’s actually the highest. Sorry, I thought it was Birmingham, Alabama as the highest. It’s Newark, New Jersey. That is number one on the list. And so New Jersey, it’s already a market that’s pretty overpriced, you know, historically. But then they have a full report here of the 54 cities most in danger of a housing crisis that Forbes referenced. Amazingly, not one city was on this list that’s located in Texas. Not one. No Dallas made the list. No Houston, San Antonio. Austin didn’t see that on this list at all. I saw many cities in California, uh, Seattle, Omaha, Nebraska, Denver, Portland, Nashville, Honolulu, Boston. Many of these cities I mentioned on my show, month or so back. Uh, they’re also on this list. Minneapolis, Louisville. Every major city in California is on this list. Charlotte, North Carolina did make this list. It could be because Raleigh, North Carolina, these have been hot markets for awhile now as well.  

Uh, it could be that it’s just gotten to the point where these markets are also getting pretty inflated. And the people that are moving there and that live there, they just, that are that true middle class, they can’t afford the properties any longer. DC, Baton Rouge, Richmond, Phoenix, Tucson, Tulsa, Oklahoma, Orlando, Oklahoma City, Pittsburgh, Atlanta. Yeah, I mean, you’re definitely gonna want to check out this list. I’ll have a link to this list on the website, RealEstateCowboysDFW.com. Uh, I mean St Louis and Kansas City made this list, like I just talked about, and those are cities I invest in. Um, but you know what I was getting great, great deals in those markets five years ago. Like that was when I was heavily investing personally in these you know, these “cash flow markets.” I just feel like the time has run out. Kansas City, you can’t even get the cash flow you used to get there. You know, St Louis, you’re still getting pretty strong cash flow, you are. You’re still able to achieve that one percent. But it’s also a city that, you know, has shown in down economic times you see vacancies, you see foreclosures, okay. But yeah, miraculously did not see one Texas city on this entire list and I’m just going through it again. Albuquerque, New Mexico, Tampa, Buffalo New York, Philly, Indianapolis, who’s become a very popular one among investors as well. I was hot on Indianapolis 10 years ago, 8 to 10 years ago. No longer today. Birmingham, like we mentioned, Baltimore, Jacksonville, Hartford, Connecticut. That made my list on the last episode that I did. So be careful. Be on the lookout for these cities that are just not thriving cities. They don’t have the diverse economy to support these rising prices and it’s going to result in a housing crisis.  

It’s going to result in a bubble. It’s going to result in vacancies. It’s going to result in foreclosures. I just hope that you as the investor, do not make a mistake buying there today and overpaying for a home. So if you want more information on some of the markets that we invest in, that we still invest in, even in today’s market, because I’m telling you it is tight, I understand your frustrations out there as an investor, the cash flow just is not there like it used to be. And now I just, like I said, I see investors that usually only like to buy A and B properties now buying Cs because they’re trying to chase that cash flow. I see investors that really only liked to invest in thriving markets with diverse economies. Now they’re telling me that they’re investing in Birmingham, Alabama. I don’t understand. They’re contradicting themselves. They’re chasing cash flow. They may make a mistake.  

Judging by this list, it looks like it could be a mistake. These are all the same cities that I myself had been preaching are going to go into a correction and is going to happen sooner rather than later. And like I’m just, I wasn’t even shocked to see that there is no Texas cities on this list because Texas is a booming economy right now and a very diverse economy, and there’s just so much growth moving into the market. So if you like what you hear today, thank you for listening. Thank you for all my loyal listeners. Anybody that’s invested in these cities, or are thinking about investing in these cities. Don’t take this the wrong way. I’m not trying to beat up these cities and not trying to beat up other providers that work in these cities. Everybody needs to make a living. Um, I just think there’s a time, and a place to invest in a lot of these cities, and right now is just the wrong time to do so.  

Um, right now in general, even me as a single family investor, I’ve cooled a little bit on my buying, um, and my acquisitions, just because I’m kind of taking a wait and see approach right now. And I think a lot of other savvy investors are doing the same. We want to see what’s going on with the market. I think a lot of investors, a lot of people that live in these cities that are listening to this show are probably already getting some indicators and some signs that the market is shifting; that properties are sitting on the market a little bit longer. You’re not getting multiple offer situations anymore. And that’s going to happen as the interest rate continues to spike. And more increases in interest rates are coming, and they’re coming soon.  

Uh, it’s just the way that we have to balance out the market. It’s too hot for too long. So if you like what you heard, you want to listen to past episodes, you can subscribe to us on iTunes, all the major resources out there to get podcasts. You can also visit our website RealEstateCowboysDFW.com. Got great information on there. And for those of you that are looking for cash flow, we’ve talked about this. I talked about this a lot. If you’re looking for cash flow in today’s market, the best thing to do right now is become a private money lender. Become a hard money lender, lend money in booming cities. Cities that are growing by 150,000 a year like Dallas because developments are still going to be in demand there. New single-family homes, new office space, new retail space is still going to be in demand as long as these cities continue to grow, and guess what?  

When a recession hits and the economy isn’t doing very well in a lot of these other cities in the US as a whole, people start leaving those cities, and they start moving to the thriving markets. And that’s why I believe that Dallas really wasn’t affected in the last downturn because you know, you didn’t see prices going up at that time. You did start to see development slow a little bit. But people in Detroit and Cleveland, in Memphis, in Kansas City and St Louis, were moving to Texas for opportunity. So even in a down economy, as long as people keep moving into your city, the demand for homes is going to be there. The demand for office space is going to be there. So that’s why I moved my company here. That’s why I moved to Dallas. I love Detroit. I love the four seasons. I love all the stuff that comes with Michigan, and my whole family’s there, but I knew it didn’t make sense for my business model.  

So if you’re looking for cash flow though, you want a consistent rate of return, you want a check that’s sent to you every month that you know what you’re going to get. You know there’s no vacancy involved, there’s no theft involved because your property has been sitting vacant for too long. There’s no, you know, new roofs that need to be replaced and so on and so forth. If you just want a guaranteed check that comes in each month, become a private money lender. Look into it. Go to our website, RealEstateCowboysDFW.com. If you’re interested in learning more about projects that we’re raising for right now, we can get that information to you. You can also go to my company, American Real Estate Investments website. We just put out a brand new website. It looks beautiful. I got to give my marketing team a lot of credit. And that’s AREI which stands for American Real Estate Investments USA.com, AREIUSA.com. Visit our website, speak to a member of our team, we’re actively raising money for deals as we speak in the Dallas and Houston area. I believe these markets are gonna hold strong even through the next recession, which is looming. So if you like what you heard today, you want more information, visit the website. Also, check out my book. You can get it on Amazon. You can get it from either website, The Passive Income Guide: What’s Your Return on Life. Foreword was written by my good friend, Keith Weinhold, who has Get Rich Education podcast and Get Rich Education. He’s a super intelligent guy. Learn a lot from Keith, a lot. He wrote the foreword for the book, so check it out. It’s still pretty cheap book, very easy to read, and it’s great for investors who are looking to get started. How do I start earning passive income through real estate? This book is a great way to start. There’s a lot of good stuff in there and an easy read for you. So thanks again for listening this week. We’ll catch you next week. I’ll see y’all later and always remember what’s your return on life. 

Announcer: All opinions expressed by the host of the show are the opinions of American Real Estate Investments LLC and do not reflect the opinions of guests or sponsors. No personal or professional advice on this program should be considered an endorsement to follow a real estate financing or investment strategy. Before acting on any information, seek advice from your financial tax, mortgage or real estate advisor, as the information is not guaranteed and investment strategies have the potential for profit or loss.