At the end of the day, I’m a practicing real estate investor. I may not spend nearly as much time as some of my brethren do, but I have been invested in the real estate business for my entire adult life.
I have owned apartments, condos, single family homes, landholdings and so much more. In addition to my considerable stake in real estate, I have helped many others invest, either directly or indirectly.
I know some folks really want to talk about “buy and flip,” “staying a day or two” and how to avoid “the bug.” But I am not getting into those matters at the moment.
To me, real estate is often the most viable investment in the world, if you know what you are doing.
As I was traveling in recent days, two common themes were happening. I was meeting many organizations that are committed to feeding the hungry. There is a soup kitchen in every major city in this country that is a lifeline for more than 9 million people in America every year. Meanwhile, I was reading about the Shill Foundation — a “regional philanthropy initiative” that helps first-time homebuyers without much money set aside for their down payment, but with the desire to own their own home.
For those of you trying to invest, but struggling, we talk about wanting to buy, but not making a lot of money (beyond what you can borrow or save).
If you are just starting to invest, I know that you have similar situations. Do you want to buy, but not make any money out of it? And perhaps you really would like to be able to buy a home of your own, but you need more money?
I believe most of us have these types of challenges.
Owning a home is a great feeling, but it takes money. And if you are trying to figure out how to “save to buy” — how to make that down payment — you have a huge challenge ahead of you.
Many of us are highly motivated to buy a home because it represents the “big picture” of our lives. We want our children to grow up in a safe and healthy environment, feel respected as Americans and associate with those who are successful. Many of us would like to retire into a home where we can spend a great deal of time each day with our families.
However, there is no longer a 30-year mortgage available in the United States for new mortgages. It has been this way for a while now. Also, the ability to borrow against the equity in your home is limited to those with good credit. This means you can borrow one-third of the value of your home, up to a maximum of $625,500 for a new mortgage.
In all of my years in real estate, I have never seen such an atmosphere of inflation and disenchantment with real estate as we are today.
For those of you who have become excited over the potential of equities as a way to invest in the market, you might want to reconsider, as investments continue to become more expensive in relation to historic averages. No longer do you need to wonder if the stock market can reach a new high.
The real estate market is getting pushed around in an environment of deteriorating net-worths, interest rates at a historic low, and a lack of homebuyers out there. No doubt this confluence is causing a “wait and see” attitude.
What we are really looking at is the long-term consequences of a broken country’s housing market, where too many people don’t have enough money for the home they want, and instead are only interested in the ability to live where they can qualify for a mortgage.
Even though it will be hard to satisfy all of our real estate dreams, there are still many people with their hearts set on buying their first home. If you are one of them, understand that it will be harder than ever to make your way into the market because of the way the stock market is today.
If you can make it this long, you might want to consider moving from home to home in search of the best opportunity in the country.
In the meantime, I hope you can find some inspiration from the single mom looking for a down payment for her son. It is always a possibility in today’s market, and she is telling her story in a way that shows it can happen for everyone.
D. Todd didn’t need a home or a mortgage to live her life. The Money Coach had to save up to own that smart car she drives. Then she took a $45,000 position in Yandex NV, a Russian Internet search giant that trades on Nasdaq under the ticker symbol: YNDX.