AAA335 Think Real Estate is Overpriced? Think Again!-Bob Fraser

Jan 22, 2020


In this podcast, you'll learn

6 metrics to check if the market is looking strong right now:

  1. Mortgage Rate
    • It will stay low for an extended period of time it is primarily driven by the global money flow.
    • Money is Global
    • Money flows. Its driving down global bond rates and US interest rates
    • All interest rates flow together
  2. Inflation. Are we at the peak?
    • For the largest markets right now prices are at the peak
    • Smaller markets prices are right above the peak
  3. Price to Rent Ratio
    • Price to rent ratio are 25% below the peak.
    • The best way to buy a real estate is called a discounted cash flow basis. Look at the cash flow that you're going to receive from the investment and that determines the price you will pay.
  4. Supply and Demand
    • Multifamily massively recovered since the crisis and above where they were pre crisis
    • Single family homes shortage. It never recovered from the crisis. There are fewer single family homes.
  5. Consumer Debt Services
    • US consumer's debt service is lower than anytime in the last 30 years
    • The percentage of their income are used to pay their debts
    • Consumers are in great shape today!
  6. Mortgage Underwriting
    • In 2006 only 50% of origination are above 700 FICO score
    • Today 80% origination are above 700 FICO score
    • Underwriting is still very conservative
    • Having been to many crisis, people are now very aware and concern of not repeating the last crisis
  • "The way to make money is to buy when blood is running in the streets" - JP Morgan

To connect with Bob, visit https://aspenfunds.us/creative-real-estate/ Sponsors: (https://thinkmultifamily.com/podcast/) (https://SyndicationPro.com) Use code: Adam Adams. First month for free!

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