Posted by David Marden on Tuesday, November 15, 2022 at 2:55:10 PM By David Marden / November 15, 2022 Comment
Saying 2022 was not a good year for Crypto and Tech Investors would be a gross understatement, while many investors saw a good chunk of their portfolio wiped out, or some of their assets even disappear altogether. Do you know what doesn't disappear? Real Estate is a physical asset that generates passive income and appreciates over time, and you won't have to worry about your real estate investment vanishing into the cloud. Learn why buying real estate in 2023 could be a smart investment!
Real Estate Tech Companies
As property values began to rise across the United States during the Covid Pandemic, many tech start-ups and I-buyer programs begin to lure investors with promises of above average returns, but unfortunately they could not deliver on their promises. The article I wrote last year (November 2021), "Why Big Tech Will Fail in Real Estate, " predicted the financial struggles many of these tech companies actually faced in 2022. Therefore, Real Estate investing is a long term stratgy that remains very accessible to first time landlords and investors that are willing to invest in 2-4 Unit Properties to build up their portfolios.
Real Estate Investing Versus "Flipping"
For the puporse of this article, I want to make a clear distinction of the value real estate provides as a long term asset to build wealth and generate a passive income. While some investors may do well flipping houses, the long term strategy of buying and holding real estate has proven to much more successful during almost any extended period of time across the United States.
The Best Stratgey for a First Time Real Estate Investor: 4321 Hack
The 4321 Hack Strategy is probably one of the most proven methods to acquire multi family real estate investment properties and you can buy your first property with only 3.5% Down through an FHA Mortgage. The 4321 Hack strategy begins with an investor purchasing a four unit property, then a three unit property, then a two unit property, and finally a single famliy residence.
Where is the Best Area to Buy 2-4 Unit Multi Family Properties?
The Chicago area has many neighborhgoods that have strong rental markets and a good stock of availble mutli family housing units for sale. Plus, Chicago will continue to provide a steady rental market as a result of the many professional opportunities, access to public transportation, and culture. Search Chicago 2-4 Unit Multi Family Properties Here.
Where Can I get Approved for my first 4321 Hack Mortgage?
You can get approved for your first multi family property mortgage with 3.5% Down at HERE, or with any FHA Approved Lender.
FAQs
The current market conditions are ideal for investment
What is the US real estate outlook for 2023? ›
While rent growth in 2023 should slow from 2022's scorching pace, it will stay elevated. With such strong demand, new properties are increasingly getting larger to capitalize on market strength. Roughly 20% of projects under construction are larger than 500,000sf, compared to roughly 5% of existing inventory.
Is house flipping still profitable in 2023? ›
The gross-flipping profit on median-priced home flips in the fourth quarter of 2023 was $65,000, down from $68,154 in the third quarter but up from $59,900 in the fourth quarter of 2022. The latest figure represented a typical 27.7 percent return on investment (percentage of original purchase price).
Why is real estate often a great investment? ›
The benefits of investing in real estate include passive income, stable cash flow, tax advantages, diversification, and leverage. Real estate investment trusts (REITs) offer a way to invest in real estate without having to own, operate, or finance properties.
Is 2023 a good time to invest in real estate? ›
Buying real estate in 2023 can be a good investment due to the potential for property appreciation and rental income. However, investors should be aware of the risks and challenges associated with real estate investments and take steps to mitigate them.
What are experts saying about the housing market? ›
Experts overwhelmingly say that the housing market isn't going to crash anytime soon. The last housing crash helped cause today's lack of supply, which is what's keeping prices from falling. Mortgage rates, however, are expected to fall this year. This will help make homeownership more affordable.
Should I invest in real estate in 2024? ›
The combination of high mortgage rates, steep home prices and low inventory levels are lining up to make the 2024 housing market a challenging one for both buyers and sellers. But rates have cooled a bit — if that continues throughout the year, as some experts predict, then market activity should heat up in response.
Is it still smart to invest in real estate? ›
Real estate typically outperforms other assets in terms of value appreciation. Furthermore, it is not as susceptible to short-term volatility as the stock market. Whether you rent out an apartment or a business property for income or buy a home, you obtain a physical, usable asset.
Is real estate the most stable investment? ›
Is real estate less volatile than the stock market? Generally, yes. It depends on the particular stock and real estate investment (there are numerous ways to invest in real estate and they're not all equally risky), but real estate is typically less volatile than the stock market.
What is the 70% rule in house flipping? ›
Basically, the rule says real estate investors should pay no more than 70% of a property's after-repair value (ARV) minus the cost of the repairs necessary to renovate the home. The ARV of a property is the amount a home could sell for after flippers renovate it.
The Best (and Worst) States to Flip Houses
Louisiana is the best state for flipping houses in the U.S. with a score of 41.1 out of 50. This is largely due to the state's high house flipping ROI of 55.6%. Fixer-upper homes in this state are also priced reasonably at $196,763.
What is a good ROI on a house flip? ›
An average ROI, on a real estate fix and flip project has traditionally been between 50 and 100 percent. Of course, flipping a house won't always offer such a high return. Expected ROI from house flipping can fluctuate based on the current economy too.
Why real estate is no longer a good investment? ›
Key risks include bad locations, negative cash flows, high vacancies, and problematic tenants. Other risks to consider are hidden structural problems, real estate's lack of liquidity, and the unpredictable nature of the real estate market.
Do most wealthy people invest in real estate? ›
Investing Only in Intangible Assets
Ultra-wealthy individuals invest in such assets as private and commercial real estate, land, gold, and even artwork. Real estate continues to be a popular asset class in their portfolios to balance out the volatility of stocks.
Is real estate a better investment than a CD? ›
CDs Vs Real Estate
real estate, investors may notice several of the same tradeoffs regarding bonds vs. real estate. Real estate will yield higher returns but with more risk than CDs. Real estate will also benefit from tax policies and inflation more so than CDs.
Will home prices drop in 2023 United States? ›
Even as buyer demand has slowed, extremely low supply has kept home prices from falling. Prices increased a bit in 2023, and they'll probably go up in 2024, as well. Most major forecasts predict that home prices will end 2024 between 2% and 4.8% higher than the year before.
What is the outlook for real estate in 2024? ›
“Home prices are expected to rise roughly in line with consumer price inflation and wage growth over the next two years.” NAR predicts that median home prices will increase 1.8 percent over the course of 2024.
What is the outlook for the real estate appraisal industry in 2023? ›
The US real estate appraisal market is expected to be worth US$9.27 billion in 2023, witnessing growth at a CAGR of 4.24%, over the projected period.
What is the best state to sell real estate in 2023? ›
What are the best states to be a real estate agent? The best states include Washington, Florida, South Carolina, Texas, Georgia, Nevada, Virginia, Tennessee, Delaware, and Wyoming.
