Many that read my posts know that amidst my crypto addiction I spend a good amount of time on real estate investing.
(pic of our latest completed project)
Buy'em, Fix'em, Refinance'em....
I do not flip houses, though we will occasionally do them. We buy properties to hold as rentals.
That can be a slow grind thought. Acquiring properties one by one to build cash flow a few hundred dollars at a time.
BRRRR
That is why we what is known as the BRRRR strategy, which means:
- Buy, renovate, rent, refinance, repeat
By doing this we generally are able to recycle the same working capital amount over and over as the money gets pulled out of each project that originally went into it.
This isn't the only way to do real estate, but it works for us.
Real Estate # go up....
Granted, markets don't go up forever and we have seen some price declines in many markets the past year (luckily none of which I am in).
When I look at the data, outside of 2008 there really aren't major life altering declines. Furthermore, even with a price decline of say 5%; the impact on me is nearly moot.
This is because I am holding the properties as rentals for the long-term. If the value of my property goes down in the short-term, well not much changes for me.
They Key is to Buy Right
As long when I purchase the numbers make sense. The property must produce a positive cash flow (and this is after allocating for maintenance, vacancy, etc.)
So long as it does that I am in good shape. Market can go up down or sideways. The movement in rents are not as volatile, so even if rents stayed flat or went down a bit, things are still good on the grand scheme.
The housing shortage in the U.S. certainly helps the demand side as well. This is an issue I don't see being resolved for several years. When it does, maybe then the unaffordability of the real estate market will meet it's end and the market will get dragged down.
Who knows, but in the end real estate has always worked (when done right) and looks like it will continue to work.
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i love real estate because it can help serve as asset security and help store the value of your money. but in my country, real estate is kind of a bad idea because of inflation.
The way I see it there's a housing shortage almost everywhere, except probably rural areas in underdeveloped countries.
I guess the planet has become too crowded. Maybe we need some vaccine or something to "control such growth" :)).
Congratulations on your success with this endeaver.