Be Thankful for the Market You’re in, And for the Lessons You’ve Learned

23 Nov Be Thankful for the Market You’re in, And for the Lessons You’ve Learned

I’ve been a full-time real estate investor for two decades, and I’ve heard this from so many people through the years: “The market’s too tough. You can’t find a deal.”

Is the market too tough? Or are you not pivoting, adapting, and making enough offers?

In 2004 to 2006, many people complained that there were too many buyers competing for properties. The market was “too hot.” Wannabe investors complained that there were too many bidding wars. Yet I bought numerous properties, by myself and at other times with partners and private lenders. I learned about buying with Realtors, buying at auctions, buying in depressed areas, buying pre-foreclosures, and bidding at foreclosure auctions. I bought rental properties that I kept for many years.

I purchased my first home – a fixer-upper duplex – for $49,820 in 2004. The appraiser for my loan pulled me aside and told me that I was paying too much for the property. I bought it anyway. The duplex later appraised for $130,000 in 2006. It appraised for $70,000 in 2012. I sold it for $160,000 in 2021. Plus I collected rent for 17 years! Not once in all that time did a tenant fail to pay rent. Most importantly, I learned valuable lessons in working with contractors and tenants.

In 2007 to 2011, people complained that banks weren’t lending and that there weren’t enough buyers. In the Great Recession, the housing market declined dramatically as inventory piled up, banks curtailed lending, housing prices declined, and many borrowers faced foreclosure. During that period, I did over 200 deals. I learned about lease purchases, lease purchase wraps, owner financing, no money down deals, short sales, make whole pre-foreclosure sales, wholesaling, whole-tailing, and subject-to deals. Most of the deals I did involved no money of my own. I obtained my real estate license in 2008 and added commissions as an income stream.

From 2012 to 2019, the housing market was steadily recovering. I heard wannabe investors complain that they should have bought in 2011 and were waiting for the market to go back down. There were complaints that lumber costs and gasoline prices were too high. I heard landlords complain that all the good tenants were choosing to buy their own home. For the first three years of that time, with a business partner and team members, we built a short sale negotiation company that closed several hundred deals. I also negotiated a loan modification on my first home (the duplex mentioned above) to lower the interest rate from 6.875% to 1% for three years and 4.65% for the next 37 years. My wife Amira and I leaned into making money through real estate commissions. We bought slight fixer-uppers in desirable neighborhoods that could easily be rented. I heard some wannabe investors state that they were waiting for the housing market to “crash.”

From 2020 to 2023, the residential housing market went on a tear. In 2020 and 2021, mortgage interest rates went to incredibly low levels as the Federal Reserve, federal government, and state governments injected liquidity into the markets. Many more homebuyers, especially from urban areas, elected to purchase in suburban or rural areas. Lack of inventory and high demand created a buying and selling frenzy. My wife and I studied everything we could about the BRRRR Method (https://investandtransform.com/brrrr-is-like-flipping-except-you-get-to-keep-the-house/) and did a number of BRRRR deals. Many investors complained that prices were too high. In 2022 and 2023, investors claimed that interest rates were too high. My wife and I made dozens of offers in 2021 and 2022, and we acquired a number of detached single-family homes that we rented. Even though prices and interest rates were rising, we adapted by making more offers. In those two years, we bought more houses than in all other years combined!

You can have reasons or results, but you can’t have both. The best time to plant a tree was yesterday, and the next best time to plant a tree is today. Markets shift. If you’re serious about building wealth in real estate, you have to embrace the market of the moment. Work to learn, not just to earn.

Keep finding a way. Take action, make mistakes, and fail forward. Your future self will thank you.

Tai DeSa is a graduate of The Wharton School of the University of Pennsylvania.  He became a full-time real estate investor in 2004 after serving in the U.S. Navy.  Tai made colossal mistakes in investing (and learned some things along the way).  Tai has coached hundreds of entrepreneurs, real estate investors, and real estate agents on how to increase their income and net worth. He has helped hundreds of homeowners avoid foreclosure through successful short sales. Check out Tai’s books on Amazon.com. Tai may be available for coaching and speaking engagements on a variety of real estate topics.  Send an email to tai@investandtransform.com.