With the pandemic affecting everyone around the world for the past few years, it also impacted the economy. A lot of people are struggling to get by every day. Kathy Fettke believes that 2022 will be different due to inflation. With a passion for researching and sharing the most important real estate and economics facts, Kathy is a frequent guest expert on such media as CNN, CNBC, and Fox News. In this episode, she emphasizes that people need to be cautious in buying and selling homes. The demand for houses is rapidly increasing, so the supply is insufficient, allowing opportunities to house rents.
Kathy, welcome back to the show. It’s nice to see you.
Thank you. It’s so nice to be back.
Thank you so much for having me on your show.
I learned so much about you that I did not know.
When you hang out with people and you get to know them, you respect them, but you don’t talk necessarily. We don’t talk about ourselves naturally. That was lovely, but thank you. What I wanted to share with my audience is what your perspective is on what to expect in 2022. Does that sound like a fun topic?
Let’s do that. It’s on everybody’s mind.
What are you expecting?
In 2020, I said I was expecting a Black Swan Event. Can you believe that? I did not know exactly what I was predicting there. 2022, we have a few factors in place that people need to be aware of. One is that we have inflation. We are seeing lots of inflation. For investors, the people who own real estate, that can be a pretty big deal. You can build some wealth. It’s not necessarily wealth because it’s inflation, but at least you own assets that are inflating. If you don’t have assets, then what you have is the higher prices. People who own assets in inflation are going to increase your net worth, and those who don’t are going to have to figure out how to get in the game.
A coin with two sides. We got to look at all the sides. What happens in an inflationary environment is the Federal Reserve will then want to slow that down. The Federal Reserve is a central bank. It’s their job to curb inflation. That’s one of the key metrics that they look at. For a long time, the Federal Reserve was saying, “This inflation was transitory.”
Many of us were saying, “We will be checking in with that. It does not look like it’s going to be transitory when you printed so much money. That’s a whole lot of money circulating. That is going to create inflation.” A lot of us were questioning that, but here we are and the Fed is now saying, “It’s probably here for a bit longer,” which means they are going to raise rates to try to slow down the economy to try to curb inflation.
This is a big mouthful. It’s a lot that I’m saying, but bottom line, when the economy is chugging along and it’s going strong, that means people are getting hired and there are jobs, there’s a strong stock market, real estate prices are going up, and people are making money. They are spending money and all that is circulating, and the velocity of money is driving prices up. When you add to it, the fact that we have so many job openings, and that’s usually common in a robust economy, lots of job openings, which means that employers have to pay more to attract good labor, and there does not seem to be the labor out there, that causes inflation.
You add all the money supply that’s out there and this issue with materials and all these issues that we are having, trying to get the materials that we need, and because we can’t get them, the costs are going up. There are so many factors that are driving inflation that it’s forcing the Federal Reserve to raise rates, which historically has slowed things down in the past.
31 is the typical home-buying age. It’s a massive, massive amount of people over the next two, three years that are just coming into home-buying age.
Unfortunately, in the past, it slowed things down to a screeching halt many times. Often, in an environment like this, it would cause a recession. What we are paying attention to is will the Fed get it right? Will they do it nice and slow that the economy can adjust to it, or will it take the air out of that balloon? Moving forward, we need to be careful and cautious in 2022, about what we own, what we buy and what we sell.
It’s not going to be 2021, 2020 or 2019. It’s going to be more like 2018, where interest rates were going up. It was back in 2018 that the Fed did start tightening and started to slow down the economy a little bit. It was chugging along pretty good back then, too. That affected new home builders. They saw a slowdown, but the real estate market, in general, did not slow down, but new homes were having a bit of a more difficult time until 2019, when that reversed.
I don’t know if you remember, President Trump had a big fight with the Federal Reserve and they said, “You better stop raising rates. Stop it. Not on my watch. You are not going to have a recession while I’m president.” It’s basically what he’s saying. The Fed listened and turned it around. I’m not sure how that all happened, but it happened.
COVID came along and then the Federal Reserve did what’s called commodating, which is lowering interest rates and flooding the economy with capital. That worked and it got things going again, and now they got to put the brakes on. The bottom line is things could slow down a little bit, which is a good thing. It’s prices can’t go up at these double-digit rates forever. We do need to pay attention to the Fed and what the Fed does.
With that said, we still have some serious fundamentals in place, which is so many young people, these Millennials, who are reaching home-buying age, and there’s not enough supply for them, many of these young people who are forming families and want to have that backyard and never want to be stuck in an apartment again. In case, there is another COVID situation where you are stuck in your apartment and can’t use the pool or the facilities. People are like, “I want my own yard,” especially when they have got young kids and they are having kids. They are the largest cohort of Millennials is 29 years old.
Thirty-one is the typical home-buying age. It’s a massive amount of people over the next several years that are coming into the home-buying age. The product is not there for them. You are going to have a tightening and a raising of interest rates while there the demand is still there. I don’t see any housing crash, but the intent is to slow down the dramatic increase of prices, which may or may not work because the demand is still there.
We have all these studies. Historically, we know what the markets do. We know how to affect and change the markets. There are specific tools that the government has used for a long time with some success or not, but it’s an unprecedented situation this time. First of all, we had COVID so we had all this money that flooded the market, but also our expectations. Up until COVID, everybody was moving more into the cities, people wanted to be closer together and condos apartments, and then COVID, now people are going back out into the country, not the country, but you know what I mean.
All over. They are going to cities, too. There’s a massive household formation.
It’s because people are getting to choose. I don’t know if this is true all over the country, Kathy, help me to understand, but in the Silicon Valley where I am, we can now work anywhere. You can move to where you can get a larger house. Even if you are paying the same amount, you are getting a larger house that might be in a different city. Are you seeing that people have so much more mobility so they can make choices that are better for them and their families?
We are seeing that, but we are also seeing a massive demand for homes in Silicon Valley. I read an article about the mass exodus out of California. I know real estate agents in the San Francisco Bay Area who cannot keep up with demand, still have multiple offer situations. None of it makes sense. I would say that there are people who are making life decisions that they maybe could not before. That life decision might be, “I might sell this house while I can get multiple offers and go live in Arizona or Boise, Idaho, Texas,” or wherever they are going, and live a very different lifestyle.
You could sell your house in the San Francisco Bay Area and have the mortgage-free if you wanted to, or have a much bigger house for a much lower payment or have maybe better schools. A lot of people are making life choices that they maybe could not make before, but what that does is open up a property for someone who now gets to buy it, even though it seems so much more expensive than it was a few years ago, but maybe not with the interest rates.
My daughter bought a house that was probably $750,000. She paid $1,100,000. That payment is the same as rent in Southern California. She’s outside of LA and half an hour from me. She was able to take on such a huge purchase because the payment is not different than the rent. What was offered out there was hideous.
She could not find anything she wanted to rent, so she bought it. I’m so proud of her. She had listened when she graduated from college and got a job in Chico. I knew that the home prices were still in the $250,000 to $300,000 range. I was like, “Please, listen to your mama. Don’t buy a car and please go buy a house.” She’s like, “Mom, I’m 24. I’m not buying a house.” I said, “Please talk to a mortgage broker.”
She did. She found out she could own a house in Chico for the same price as renting, again, amazing in California. She did it. Three percent down. She had to put $11,000 down. She had it, she had saved it. She made $100,000 on that. When she sold that house, she was able to buy this $1 million house. It’s amazing to me that it’s the same as rent. All in, she’s at $5,500 a month, and that’s sadly what the rent is, but that’s how it is in the Bay Area too.
I had the weirdest situation. We had a bidding war for a rental that I was renting out where I listed it a little bit low, which is what I always do. I like to be in the middle of the market, not the high range, and provide a good product for a little less. It was the people motivated to stay. We had a bidding war that went over market. It did not go over market. It went right about the market.
Things are crazy to even as a landlord. You are right. There are all sorts of interesting things going on. I feel like it’s hard to understand and predict. That’s causing an awful lot of uncertainty with investors. There is this the right time to do it. What would you say to an investor around us? You told your daughter to buy, so that speaks very highly about getting to the real estate market.
I was worried for her, not that she was paying $1 million for a house that was $750,000. I was worried she was not going to find a place to live, and they have a big dog that’s part pit bull. He acts like he’s a poodle. He’s the sweetest little guy. It’s hard but no one’s going to rent to someone who has a big dog, a little dog, a baby, and another baby soon. The fact of the matter is, I look at my daughter, who’s 29 and she represents what’s happening. It’s anecdotal, I often look at her and she’s always shown me what’s going on when she was trying to get into a soccer team when it was very difficult because she’s the largest group of Millennials, the 29-year-olds, most competition.
She had a hard time getting into college. She did get into college, but she was competing against brilliance everywhere, that largest group of educated people competing for houses. Watch the 29-year-olds because they are facing what we faced or I faced as a Baby Boomer, competition. It’s a massive group of people who are the most educated ever of any group ever. They have more education at their fingertips, more access to information and data. They have the highest college degree rate. Our generation did, but they have more information than our government had when we were young. It’s incredible.
I look at her and honestly, my 29-year-old has no problem paying $5,000 a month for rent. Not even a problem at all. These are dual-income families. She works at home. She’s got a tech job. She’s focused on email marketing. It’s nothing that unique but it’s needed. As more businesses go online and more jobs are needed for that and these kids know how to do it, they grew up with it. She’s doing great. I look at her and say, “How many of her are out there?” There’s a lot. If you look at the fact that there are 5 to 6 million homes that change hands every year, we think that we were looking at real estate that sells.
This group of Millennials is 80 million. It’s a lot of people. You don’t need every single Millennial to be a huge success, but there are a whole lot of them that are, and they are able to afford nowadays’ prices and especially if they are the ones who say, “I’m going to get out of these big, expensive cities and go live wherever I want.”
My daughter could, but I made sure she lived near me because I needed to see those grandbabies. It’s a hard thing for me too. At RealWealth, I’m responsible for the things that I say influence thousands of people. We have 60,000 members and they do rely on me and my research to help them make decisions of what to do next.
We syndicate. We have funds that we buy houses and apartments. I got to get it right. I can’t get it wrong. It’s a lot of pressure. For those of us who have been through something like 2008 or 2001, these times when the economy contracted, it’s scary. It’s like, “Is that going to happen again? Are we going to be buying at the peak and stuck with properties? We can’t rent.” I come back in 2009 when there were foreclosures everywhere, and people were losing their shirts.
I wrote this in my book, Retire Rich with Rentals. My mother was renting. They sold their Bay Area house and my dad died. She did not want to be a homeowner and she was renting. She was renting in Chico, California, where my daughter was going to school. Her landlord was a pastor. He was on a pastor’s salary. I’m imagining in Chico, is not a lot of money. Let’s say it’s $50,000 to $60,000.
I don’t know what a pastor makes in Chico, but I don’t think it’s a lot, but she was renting from a local pastor. This pastor was retired. When he was 30, he decided to start buying a house a year. He bought ten houses in the Chico area with his little pastor’s salary. When 2009 hit, it hit Chico too, and those houses lost value, but you know what did not lose value? Rent, because all the people that lost their houses suddenly became renters. My mom was one of them.
We need to be really careful and cautious in 2022 about what we own, what we buy, what we sell.
She did not lose a house, but she was choosing a simpler life that was renting. Here’s this pastor as an example. I wrote a bit about him in the book to show that example that during the worst housing recession since The Great Depression, that was the worst and we lived through it. This guy was getting a raise. His rents were going up.
He did not even care that the value of his asset had gone down maybe by 50%. He did not care because the cashflow going in his pocket, his retirement money, was going up. That’s all that mattered. I’m looking at this guy going, “He owns ten houses, probably free and clear. He’s retired. He bought him when he was in his 30s and he’s making $2,500 on each. He’s okay.”
I want to highlight this because this is a thing that people worry about when they are looking at buying and investing in investment properties. I had a very similar experience in 2008. I bought a property at the top of the market. That was brilliant. A lot of our properties dropped in value, but you are right. The rents went up. When you buy real estate in the Silicon Valley, in Northern California, you don’t expect cashflow for at least five years.
Sometimes you are going to carry negative because we are in appreciating markets. People don’t have this anymore. It’s expensive, but that’s how I have always invested, so that’s what I do. I buy these properties and I have got negative cashflow when I buy them. Suddenly we have a disaster and all my property values go down, but suddenly all my rents are now cashflowing those properties.
It’s the same thing as what are you looking at and making decisions based on what your long-term goal is. For him and for me, it was a retirement plan. I had confidence that the markets would go back up and my properties would go back up to value, hopefully, surpass. At the very least, my rents were going up.
It’s interesting. That was another disaster time like this pandemic we went through was another disaster time. It’s hard to predict what’s going to happen there. From my perspective, I love what you do, Kathy, because you are getting people into the get rich slow, tried and true path to building wealth in America. It’s like, “This is the thing that you do if you have a long-term vision.” A lot of people are twenty years out like, “I can’t think next week what I’m doing.” How do you think 20 to 30 years out? If you have enough foresight to put a little bit aside and do that, real estate performs.
I don’t invest in high-priced markets for long-term rental like you do, because it took us down. I’m telling you my story that we were about $10,000 negative cashflow during the downturn. That’s not sustainable, especially when the values have gone down too, and you can’t sell it. It’s not for me. What I decided worked better for me is going into markets where the values are lower anyway, so the risk feels lower to me. If I’m going to buy a house in Florida, that’s beautiful and maybe brand new, it is $200,000 to $225,000. That’s a lot different than $500,000 or $1 million.
If it goes down a little bit, it’s not a lot. The rents are $1,500. It’s not impossible for someone to pay versus $5,000 a month. That’s harder. I felt that for me, I never wanted to go through a negative cashflow scenario again. We look for neutral or enough cashflow in markets where it’s still so ridiculously affordable to me.
That’s what we are seeing is in these markets like Florida, Texas, Arizona, Alabama and Ohio, that other people are saying, “That’s cheap.” I could make that my primary, and then I can go on these fancy vacations or go do whatever things. I’m in good schools and so forth, but my mortgage or rent is $1,200.
To me, it felt safer to have more diversification and different markets with cheaper properties, but nice and good quality. I don’t like junk. A lot of people go into these other markets and we did for a while and to certain markets, and I won’t say which ones. We buy old junky properties and they were difficult. They are expensive to maintain. I don’t do that anymore.
I like to buy high quality not older than the 1980s. I tried to get even newer than that, and brand new if I could. I don’t mind buying retail in an area that to me is undervalued, because the locals are like, “Why are you paying retail?” A local real estate investor in Tampa might not want to pay $200,000 for a brand new property. They are going to look for the older one.
For me, that is so cheap. Can you even imagine a $200,000 property? I feel like it does not exist. It does not even exist in Chico anymore. Years ago, maybe Redding. I don’t know, but it’s, to me, there are enough people in the world who would look at this $200,000 property and think that’s a good deal. There’s enough money flooding in from all these different places. That’s what we look for, areas where even if there was a recession to me, I would not be worried about owning a bunch of brand new or very new-ish renovated properties in the $200,000 to $300,000 range. I don’t see how that could go wrong.
Let’s say 2008 and 2009 when the markets fall, when you got these lower kinds of pricing, do you see big swings in those prices also as far as the home values, or is it more stable?
I can say this strategy that I did back in 2005, I had Robert Kiyosaki on the RealWealth Show back in 2005. That was one of the best things that ever happened to me. I was a mortgage broker at the time. I should have been able to see it, but I could not and millions of people could not see it. He saw it clear as could be that the loans that were being given out were going to go bad. People lied on those loans, and I knew that. I was in the industry. I saw it every day. He knew when those were going to reset and they were going to reset in 2007 or 2008. He knew exactly when things were going to be a problem.
He was saying, “Sell everything in the high price markets, where there was an abundance of these loans because the only way anyone could afford California at the time was lying on their loan.” He’s like, “Sell everything in California,” because he knew how many bad loans were out and going to reset. He said, “Buy in Texas because they were very strict on their lending laws.” They did not allow that because they had gone through the financial crisis of the ‘80s, the S&L crisis. They had already had their banking system go down. They were like, “We are not doing it 100%.” Back then you could have a no money down loan and get money back.
That was not happening in Texas. He saw the lending environment being stronger there and there are so many jobs going to Texas. It all made sense to me. There were jobs going to Texas, population growth, pretty strict lending laws for the most part, and affordability. I was like, “This makes sense.” We went. I found a real estate agent back then and she seemed to understand what to buy.
Rich and I bought fourteen brand new homes that were retail. We got them slightly under, but we were paying between $120,000 and $150,000 for brand new homes that rented for about 10%, so basically like $1,200 to $1,500 a month and it cashflowed. It was like, “Let’s do that.” I could do as many as I wanted. It was so easy to get loans back then. That made sense to me.
When the market crashed, those homes did not go down in value. They did not go up, but they did not go down, but the rents went up. Here we were in the middle of the greatest recession and I was experiencing the same thing my mom’s pastor had experienced was rising rents. Unfortunately, I had kept a couple of California properties that took us down. You got to be careful of the weak links.
A couple of bad decisions took the whole thing down, but the good decisions were what I did. I bought quality properties. Since then, those properties in Texas have tripled in value. Unfortunately, I sold them before that happened. Someone else benefited tremendously. I was like, “Maybe people are right. Nothing ever happens in Texas,” so we sold them. We were cashflowing. It was not a reason to sell them. It’s so dumb.
Even the very best of us make wrong decisions.
Live and learn. That’s why I’m here to share all the stories that will help you not make those mistakes.
It’s true. I wanted a little bit more of that deeper information because I have seen this. I talked to somebody else, who is investing in Alabama and he was saying that, “You don’t see the appreciation.” Like in Texas, you are seeing the appreciation too. That’s an interesting market, but in Alabama, they don’t see the appreciation. They do see the rents going up. They see a little bit of appreciation. It’s not stable. It’s happening. When the market goes down, it does not have these huge dips that you get, for instance, in Northern California, LA or something like that.
It’s because it’s still so affordable. Part of our game plan is to only buy things that the average person in that area could afford. That left a very large group of people that, if things did turn, they would still be able to afford it. I did not want to go too cheap and go too high-end. It was right there where the average person could afford. That’s pretty easy to figure out.
You can go online. CityData.com is a great place to get data. You can find out what the average income is of the area, and that will tell you what the average home price should be. It should not be more than 2 to 3 times the average salary. That’s certainly not the case in California. In California, if you buy right, you are going to do well. That’s the bottom line. You have to have the stomach for that because you are going to make the most money in California. There’s no question. The first property I bought in California, our first home went up $100,000 every year for ten years. You don’t get that in other places.
It feels safer to diversify in different markets with cheaper properties but in nice, good quality.
It depends on your strategy. I’m thinking about what is cashflow going to look like for me. We don’t do that in California. Cashflow thing does not happen here. You going to figure that whole thing out. The other thing I wanted to ask you, I have never asked anybody this online. I always recommend the easiest real estate to get into is your primary residence, because there’s a lower down payment.
You have to pay rent anyway, why not pay it to yourself? I always say, “Get your primary residence first then you can use the equity from that either to buy something else, or you can start to save for something else, but at least you are not making another landlord rich. You get the benefits of it and for very little down often.” Do you agree with that?
Yes. Kiyosaki says your home is not an asset. That’s one area where I differ from him. For our home, we have a guest house on it. When we Airbnb it, it pays for the entire thing. The money we get from that rental pays our entire mortgage and landscaping. Your primary these days can be an asset. I have got friends who are going to come to stay with us because they rented their house out and Airbnb and I’m like, “You use our guest room.” What is our term? We will use yours. People are using their primary now to make money. I’m close enough to LA that I will rent my kitchen out for cooking shows and stuff, and I’m like, “I love making money. I will do it anyway I can.”
A hundred percent, there is no excuse. I’m going to say this right into the camera. There’s no excuse for not owning real estate because you can buy something with 3% down and maybe even less. If You are a veteran or in the military, you better own real estate. That’s all I can say because the opportunity for you to get low-interest rates on veteran’s loans, you can do it. The FHA loans or conventional loans, you can get a fourplex for 3% down. You can live in one unit and rent out the other three units and probably live there for free and or even cashflow get paid to live there.
You might have to sacrifice a little bit. You might have to live somewhere where you don’t want to live forever. That’s okay because you don’t have to live there forever. That’s the important thing that a lot of people don’t understand, and my daughter, even with this house is a $1 million fixer that she bought. I’m like, “This is not your forever house. This is your inn. That sounds crazy. That was the cheapest house in the neighborhood, but in a nice neighborhood with the best schools. It does not have to be your forever house, even if you are buying it as a primary residence with a primary loan. It’s a loan as your primary home. There’s nothing in that documentation that says you have to live there forever. You can get that 3% down primary residence loan and rent it out in two years.”
We think about the way Americans are. We move every 4 to 5 years anyways. No matter how much you love that first home, you will find something you like better, even if you think it is your dream home. That first home that you get into does not need to be perfect. The mistake that we make is that it has to be the perfect home, or you don’t want to move into it.
Would you do that with a rental? “It has to be the perfect rental or I’m not going to move in.” You would not do that, and you are paying somebody else to own that home. Instead, do that for yourself because it does not need to be perfect. It needs to be good enough that you will enjoy it for the period of time that you choose to live there. You are not marrying this house.
In my opinion, the deciding factor would be, “If I found something better, could I rent this out, and would it cover my payment?” In the case of my daughter, her payment is $5,500 a month. There’s nothing in the area for less than that. That’s what I said, “It may be not perfect for you, but it’s good enough. If you something better, you can rent this out.”
What I found is when you are busy and you are raising children, ten years can go by real fast. When they first came down to be near me. When they found out they were pregnant and needed mom around to help, I said, “You are going to be shocked. You get a two-year rental because you are not going to believe how fast two years go.” Sure enough, the lease is up and there was nothing for them to rent, if you want the security of knowing that no one can kick you out and that your mortgage is going to stay the same.
That’s your key. If the mortgage is going to stay the same. No landlord is going to raise your rent. Nobody’s going to sell the house from underneath you. It’s yours.
You can fix it up and everything you do to it is improving it, increasing value, and I guarantee, I can almost say, even though legally I should not, but I guarantee if you stay there for ten years, it’s going to be worth more. Even if it’s not, you have spent ten years paying down that mortgage and you have paid towards it.
If you live in San Jose, California, you might not be able to do it. I understand that. Maybe you are going to have to move to Milpitas. You are not going to maybe, “Milpitas might be too expensive. Maybe you are going to have to move to Stockton.” “I don’t know.” Whatever it is, if you can’t do it in the Bay Area, I understand that it’s pretty hard to get anything there, but it might be for a period of time, you live somewhere else.
There is this whole thing about your primary residence that is not your asset. You made some good points that you did Airbnb, and you rent out your kitchen and all of that stuff. My husband always says, “Does that mean that my stock portfolio is not an asset? Does that mean that whatever this and that my savings account, making 0.02%?” That’s not an asset.
The thing is that all of those things are part of your net worth. It’s also depending on how are you accounting as an asset, just because it’s not making you money that you are writing off against or whatever does not mean that it’s not an asset. The big thing to remember is that instead of making somebody else rich, you are putting money towards your own future. There are a lot of cool things that you can do with that.
It’s your own. It will never be sold from underneath you, all of these things that we talked about. You can rent out a room if you need to. When I first bought my very first place, we could not afford it. We rented out a room so that we could. When we lived in Mountain View, I rented out one room. Airbnb and it paid for the mortgage and so much of our lifestyle because we were right next to Google. We were making a huge amount of money on one room. There are interesting things that you can do.
I have rented out my driveway. I’m near LA and we have a big driveway. That’s rare. They wanted to do a car commercial. I have had people want to rent our backyard for weddings, just for the ceremony, because I did not want drunk people in my yard.
Each market that you are in is going to have different things. Keep your ears and eyes open. She lives in LA and she has access to all these different things. I had lived in Silicon Valley. I have different things that people are asking for, but every place has its own little things. Each community has its things and you can take advantage of those things.
What I would want to leave with your audience is that we are in an inflationary environment. The Fed is going to try to slow that down and it will probably slow it down a little, but they are in a difficult situation where they can’t raise rates high because of the enormous amount of debt that would be impossible for the government to pay. It’s a difficult situation for the Fed to try to slow down this inflation.
What we know for sure in the housing world, in the US housing market, is that there’s not enough new supply for the amount of demand that these Millennials are creating. That’s a huge group of people that are now home-buying age. Add to it that you have got more people buying investment properties, having second homes, Airbnbs, people living longer, staying in their homes, the supply continues to diminish.
At the same time that we have got massive demand and low-interest rates, we don’t have the supply. This is going to be a problem moving forward for a while, and this is why across the US, you are seeing the same problem. Huge demand and not enough supply. If you are looking to protect yourself against this massive inflation, it’s important that you acquire real estate.
I can’t say that enough. You are going to get left behind. It’s only going to get more expensive. If you are waiting for that foreclosure crisis, you might be waiting for a while because there’s simply not enough supply. If somebody can’t make their mortgage, they are going to put it on the market. They are not going to sit around and wait for the bank to take it from them.
They are going to put it on the market and get their equity and sell it, and it will sell quickly. These foreclosures are not looking like that’s going to be an issue any time soon. If you can save your money and find parts of the US where there’s high demand, Austin, Dallas, Tampa and Jacksonville. The Southeast is the fastest-growing part of the US and homes are still cheap there, yet it’s attractive and there’s job growth.
You can still buy properties for $200,000 or less. If you want a fancy property in a class neighborhood, you pay $300,000. What are the chances that you are going to lose money on that? It’s slim. You are going to be all in around $1,200. There’s an incredible opportunity and a $200,000 house, that’s a $40,000 down payment. You do need to save your money, but if you don’t want to wait, then buy your primary because that’s only 3% down.
You have been on the show a few times and you have talked about the RealWealth Network. I want to make sure that I highlight that to my ladies. Kathy knows what she’s talking about because she helps you to buy properties all over the country or her team does. We have met Leah before on the show. She’s our own exclusive coach with RealWealth Network.
Live and learn. Listen to other people’s stories so you can learn from their mistakes.
If you want to find out more about what Kathy is talking about in these different markets, you can go to their website. The URL to remember is BlissfulInvestor.com/RealWealth. That goes directly to a page where you can sign up for a consultation. It’s free with Leah and then will also guide you to the link to go see Kathy’s amazing website, where they have so much education and all of that amazing stuff. Ladies, I want to let you know that Kathy and her team are amazing. You need to connect with them. Go to BlissfulInvestor.com/RealWealth.
Thank you so much for saying that. We have solid relationships with builders and property managers nationwide. We have known them for years and they take care of our people. They become close friends and they don’t want to let us down. I mean that sincerely. There were times in the early days of RealWealth that sometimes, they were not the highest quality, but we have learned through the years.
These relationships are solid and they set aside properties for us. You don’t have to do the bidding wars. You don’t have to fight for this stuff. They don’t raise the prices just because ten people want it, you go on the waitlist. It’s a nice relationship. A lot of them are in business. They don’t have to be. They could be retired, but they want to keep helping our members. We have a tremendous amount of trust and faith in these people.
I have been in those markets for a long time and you have these relationships, you have relationship leverage too. When things go wrong, because it’s a part of a community, they want to make things right. Not that they would not anyways.
These people would, but there are a lot who won’t. If you are one investor who’s got a property manager is taking care of you, but that got 5,000 other properties, you don’t have a strong voice, but with us, they don’t want to let us down. It’s because we have had this long-standing relationship and we have thousands of people that they take care of. They would not want to lose that business.
I loved our conversation, Kathy. Thank you.
Thank you. It’s always fun to talk to you.
Do you want to do our three Rapid-fire questions?
Let’s do it.
Tell us one super tip on getting started investing in real estate.
I know this sounds basic, but talk to a mortgage broker. We have got 3 or 4 on our website that works specifically with investors. That’s important. You don’t want to just go to your local BMA. You need to go to a mortgage broker who specializes in working with investors and find out what you can buy because you might be shocked to see that you can qualify for more than you thought.
That’s important for your audience because they are used to having to qualify for a million-dollar property, and then all of a sudden, they find out, “This is like qualifying for a car.” It’s shocking. I would say talk to a mortgage broker and see what you can do. If you are not in a position to buy it, they will tell you why, and they will give you reasons on what to work towards. That to me is one of the first things, and, of course, educating.
What is one strategy on being successful in real estate investing?
The more you learn, the better. I interviewed the cutest NFL guy on my show, Devon Kennard. He’s with the Arizona Cardinals. He was darling. When he’s training for football, he’s listening to podcasts. He’s constantly learning. There’s so much free information out there.
What would you say is one daily practice that you do that contributes to your personal success?
Exercise. I have to. I carry a lot of duress from what I do. If I don’t exercise, then it gets in my body. It gets out when I go work out. Especially in nature if I can go paddleboarding, hiking or something like that.
Thank you. This has been amazing. Thanks for all that you offered in this show. That was amazing information.
Thank you so much. It’s always a pleasure.
It’s always nice to hang out.
With a passion for researching and sharing the most important facts on real estate and economics, Kathy is a frequent guest expert on such media as CNN, CNBC, Fox News, NPR, CBS MarketWatch and the Wall Street Journal. She is the author of the #1 best seller, Retire Rich with Rentals, and is host of The Real Wealth Show – which is a featured podcast on iTunes with listeners in 133 different countries.
Kathy received her BA in Broadcast Communications from San Francisco State University and worked in the newsrooms of CNN, FOX, CTV and ABC-7. She’s past-president of American Women in Radio & Television.
Kathy became a certified personal coach through the Coaches Training Institute in San Rafael, California. In 2001, she took the coaching process to television and produced a cable show called “DREAM” which followed the process of 6 people going after their dreams over 90 days. Kathy noticed a theme on her Dream coaching show: most people didn’t have time for their dreams when they are spending all their time at work to make money to pay the bills.
Her show sponsor was a real estate expert and the segments they produced changed her life. After interviewing dozens of real estate millionaires, Kathy discovered their best strategies for creating passive income streams. She and her husband bought numerous investment properties and since then learned the highs and lows of investing that can only come from hands-on experience.
She is passionate about learning more and sharing that information with the members of RealWealth and the listeners of The Real Wealth Show. Kathy loves the freedom that real estate investing can bring. She is an avid traveler and enjoys hiking, rock climbing, skiing, figure skating and surfing. She lives in Malibu, California with her husband, Rich, and their two daughters.
To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com
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Moneeka Sawyer is often described as one of the most blissful people you will ever meet. She has been investing in Real Estate for over 20 years, so has been through all the different cycles of the market. Still, she has turned $10,000 into over $5,000,000, working only 5-10 hours per MONTH with very little stress.
While building her multi-million dollar business, she has traveled to over 55 countries, dances every single day, supports causes that are important to her, and spends lots of time with her husband of over 20 years.
She is the international best-selling author of the multiple award-winning books “Choose Bliss: The Power and Practice of Joy and Contentment” and “Real Estate Investing for Women: Expert Conversations to Increase Wealth and Happiness the Blissful Way.”
Moneeka has been featured on stages including Carnegie Hall and Nasdaq, radio, podcasts such as Achieve Your Goals with Hal Elrod, and TV stations including ABC, CBS, FOX, and the CW, impacting over 150 million people.