My Plan To Profit From Big Changes In The Real Estate Market
A few years ago, when my wife and I bought our first home together, I joked with friends and colleagues that we must be near the top in the real estate market. In other words, if I was buying a home, the real estate market was sure to collapse.
You see, this was actually my second home purchase. And to say I was nervous about our first home purchase together would have been a gross understatement.
That’s because my first investment in real estate turned into a complete disaster. I bought an “investment property” in 2006 with one of those nifty mortgages where the first 10 years was interest only. And as they say, the rest is history.
The whole experience was financially crippling. The value of my home collapsed by more than 50%. I wasn’t just underwater in my home, I was at the bottom of the lake, knee-deep in mud. I had tenants who wouldn’t pay their rent, I had a property manager who ended up fleecing me for a few grand, and I had to evict my last renter.
The place was trashed. The roof was peeled back in one section and I had water damage. The yard was overgrown. There was a tree growing at the base of my foundation and clogging up my sewer line.
And I was living 1,500 miles away.
I hated that house, and I hated real estate. Just over 11 years later, I ended up selling the house. I cut my losses. Instead of getting a check after closing, I had to bring money to closing. In other words, I had to pay someone to buy my house.
It was a painful and expensive learning experience. I ended up losing more than $65,000 on my “investment.”
Of course, I’m sure I’m not the only one who has a story like this. The housing collapse in 2008 was devastating to millions of Americans. And I bet many people vowed to never invest in real estate again (outside of their own home).
A Shift In Sentiment…
But about a year after my wife and I purchased our first home, my hatred for real estate started to dissipate. I soon became pretty bullish on the housing market in general.
I even recommended home-builder NVR, Inc. (NYSE: NVR) as one of my Top Stocks for 2019 in a research report that I issue each year.
While 2019 was a stellar year for the market overall, NVR did even better…
As you can see, my homebuilder recommendation went on to trounce the overall market, delivering a 56% return in 2019.
Big Shifts In Real Estate
I remain bullish on the housing market in general. We have record-low mortgage rates, low inventory, and the largest generation (Millennials, at 90 million strong) entering their home-buying phase.
But here’s the really interesting thing. Like many industries, this year has brought on some massive changes in real estate. Some of these shifts were already happening – with Covid-19 serving as a massive catalyst to accelerate these trends.
You’re probably already familiar with Zillow (Nasdaq: Z), for example. You may have even used its app before to scout for homes in a neighborhood you like – or to compare prices to similar homes in your area.
But if you’ve needed to buy or sell a home in 2020, the app has been a godsend.
I could name several more examples like this, but today I’ll just touch on one…
You see, as the real estate market has heated back up, the number of real estate agents has also spiked.
After a dip in the number of licensed agents — post-financial crisis — we now have a record number of real estate agents across the United States. More than 1.4 million to be exact.
And with the advancements in technology — along with a Covid-19 boost — the way real estate agents work has begun to shift. No longer is the big fancy office (a brick-and-mortar location) a necessity. They are capital-intensive with significant overhead costs. Plus, in today’s remote and social-distancing world, many of those offices are sitting empty.
Despite all that, when buying a home you hardly meet at your real estate agent’s office anyway. Most of the time you’re meeting at one of the houses you’re looking to buy, or other prospective homes. Most communication and paperwork is done via email and DocuSign (Nasdaq: DOCU).
Similar to the current work-from-home environment, real estate agents are also looking to shore up overhead costs and move tasks to the cloud, which can then be accessed from anywhere.
My most recent pick over at Maximum Profit is leading the charge in this space. It’s a real estate brokerage firm that utilizes cloud-based technology to help agents grow their brokerage without the burden of physical brick and mortar offices and redundant staffing costs.
And while I can’t share the name of that pick with you today, here’s what I want you to come away after reading this…
There are massive shifts happening in our economy. Right now, as we speak, they’re changing the way we work, the way we live, and the way we do business.
You don’t have to like it all. It’s happening either way. The question is, what are you doing to position yourself to profit from it?
That’s where my colleague Dr. Stephen Leeb comes in. He’s just released a groundbreaking new report called “Reset 2020” that goes into this idea in detail.
I can’t stress enough how important it is to prepare yourself for what’s to come – and that’s why you should check out Dr. Leeb’s report right now.