Going into 2019, we need to talk about how you need to set yourself up for success in a macro sense. You need to know how to look at what happened in the last year and make the right changes that will affect your entire year of 2019.
A great example of micro and macro planning is a day trader vs a buy and hold on the stock market. The buy and hold in the stock market might take a plunge and that person will lose money, but the day trader (who isn’t looking at the macro trends) will make money because they are only worried about what happens from
Real estate investing is the same idea. A person who purchases a property to hold will have different trends and goals in mind than the real estate investor who flips houses for a living.
We are looking at the macro trends and views because I know there are a lot of real estate investors out there buying and holding properties and their goals are different from my wholesalers and flippers.
According to the news in December of 2018, the stock market is declining. 2017 was an amazing year for the stock market. Everything was up and there was a 20% increase. It crushed it. Now, in December of 2018 these last few weeks have basically cancelled everything out that happened in the 2018 stock market. This could be either a good thing or bad, depending on how you look at it.
There are those who are very savvy in the stock market and they have some idea on how to continue on for next year and get the gains they are looking for. If you have no idea how to recoup your cancelled out stock market year, I can help.
The knowledge of how a stock market works will help you know how the real estate market is going to look. Right now (December 2018), people are upset with how the market had no gains and they are taking their money out to invest in other things. They are putting their money in treasury bonds and some are investing in gold again. The housing market is going to see an increase too– in the short term. How much will it increase? I don’t know and no one actually knows, but it will happen. People are worried about the stock market and are going to start diversifying their investments by pulling money from stocks and putting it into something long-term like real estate. If you are one of the people who wants to pull out from the stock market to invest in something for better yields, contact me. Let’s talk about it because there are a lot of opportunities out there for people like you.
Be warned: there will be a correction in real estate. It won’t happen right away, but it will happen because of all the people suddenly investing in real estate. For those who are already doing real estate investing and have some properties, the next few months are going to be really strong seller’s markets for real estate investing. The seller’s market could last for longer than a few months, but we will just have to feel it out as time goes on.
What Does It All Mean?
You might be wondering what the stock market, market bubbles, and people pulling money from the stock market to invest in other opportunities means for a real estate investor. It means a couple things:
- It is not the end. You still have time if you would like to invest in real estate to obtain the yields you would like with little worry.
- What this means for those who use private lending: we generally have exit strategies, but there will be a time where the bank is going to stop lending. It will be hard to get institutional money, no matter your credit score. This means that you need to get your debts restructured now before this starts to happen. Don’t get caught up because you waited too long.
- Have exit strategies. You might not want to be a housing developer or have your money tied up in long-term projects. Maybe switching to wholesaling for a while will keep you from losing money. Be ready.
- It’s much better to be too early than too late. You might do everything I suggested by July 2019 and see that the market is still doing fine. Come December, the market might crash and you were a little early in preparation. But you will be in a better situation than someone who waited too long.
There is a lot going on right now and there can be serious tunnel vision when it comes to investing. I totally understand, but its great to get advice from people who have been in the real estate investing game for a while and have been tracking the trends and cycles. Remember: it is way better to be prepared and early than late!
If you love the returns of real estate investing, but don’t want to deal with any people, you have the option to be the bank. You can be part of a trust or a fund. Right now, I have a fund set up for accredited investors with over $5 million in assets. The fund has preferred interest and 70% profit sharing. Visit me at investwithdrmatt.com to find out if you have the opportunity to invest with us.
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