Have you considered becoming an investor? Have you ever considered investing in real estate? If you are looking to take your first step into becoming a professional investor, then you may want to consider trying real estate investing before you dive into the stock market. Real estate investing has many potential benefits over other forms of investing, but recent changes in the market have some new investors spooked. This article should serve as a primer for anyone who is at least somewhat interested in real estate investing, and reassurance that 2022 is still a great year to invest.
Recently, a Reuters article reported that “the central bank’s overnight interest rate went from near zero to a level between 2.25% and 2.50%.” So, does that mean that real estate investing in 2022 is DOOMED? And that it is now impossible for new investors to break into the business?
NO! Of course not.
Pretty much everybody has heard that the federal reserve has increased interest rates. Obviously, Mortgage interest rates are going to rise with it, which is not great news for new home buyers, and could potentially be bad for investors as well. Now, because of my no BS policy, I’m not going to pretend that increasing interest rates isn’t a problem. What I am going to do is show you why 2022 is still your best year to get into real estate investing.
Here are three real estate investing tips for anyone who is thinking about becoming a real estate investor in 2022.
Tip #1: Rising Mortgage Interest Rates
Increased mortgage rates sounds bad right? Maybe, but it’s just a matter of perspective. Sure, it’s going to be harder for buyers looking to find a home to get a loan from a bank, and you’re probably thinking, obviously, if less buyers can qualify for a mortgage, that means that demand is going to go down.
Lower demand means less opportunity for investors, right?
But that’s too simplistic. You have to re-engage with the idea and pivot when there are changes in the market. Instead of looking for fix and flips, you maybe need to start thinking about getting into rentals. When mortgage rates go up and buyers are pushed out of the market, what do you think they do? Some stay where they are, and maybe some move in with their parents, but the most obvious conclusion is that they are going to find a rental in the short-term, and either wait for the market to flatten out and interest rates go down, or wait until wages increase and they can afford the new interest rates.
This is just one example of how you can effectively pivot your business strategy and alter your mindset to accommodate a fluctuating and dynamic market. Do your research and try to figure out where those buyers are going. Because they’re somewhere, and as an investor you need to find out where they are and be there ready to meet their needs.
Tip #2: Dealing With Spooked Investors
I’m bringing this up because I recently just had a conversation with my video producer about problems I was having with investors who were becoming skittish whenever any of our content was centered on an issue we were running into during a rehab.
For instance, I made a joke about a “forgotten flip.” We had a flip where several contractors fell through and it just seems like we could never get it off the starting line. I got a message from the investor asking me “what do you mean the flip is forgotten! You forgot about our deal?”
Looking back, he was understandably concerned, and I had to reassure him then while we were a little bit behind on our timeline, we definitely had not forgotten about our deal and we were definitely going to deliver as soon as we got the project back on it’s feet. But that conversation made me think, “What could I have done, other than not make the mistake of calling the flip ‘forgotten’, that would have set my investor at ease?
Going forward, I have now been careful to be up front with my investors in letting them know that “Hey, sometimes things go wrong that are out of my control, but you know what, I’ve been doing this long enough that I now factor unexpected problems into my business plan.”
I’ve said it once and I’ll say it again. Honesty is amnesty.
I’m not going to lose the trust of my investors if I’m honest with them in every aspect of the deal. I let them know that I’ve never done a perfect deal in my life and I don’t think that I ever will. But I also let them know that I’ve got their back and that I’ve got their best interest in mind.
Tip #3: Setting Goals
Let’s talk about setting and achieving real estate investing goals.
We just talked about unexpected problems that always seem to rear their head in the wrong places at the wrong times on every single project. So, what this means is that you need to set goals that are not only conducive to expanding your business but are also reasonable enough so you can actually obtain them.
For instance, I’m not going to go into 2022 telling myself that by the end of the year I’m going to have done 25 million dollars in profits. That tagline would probably sell a YouTube video pretty well in a thumbnail. but I’m not here to BS you or to BS myself.
Do you know what the number one reason is that prevents people from losing weight?
It’s that most people are just not honest with themselves about their own dietary habits. It’s human psychology, we’re trying to shield ourselves from facing our own destructive habits, and the person that we end up lying to the most is ourselves.
So don’t let social media influencers and big million-dollar Real Estate Investors try to convince you that you’re going to be a millionaire in under 6 months. Hey look, maybe you will be. Maybe you’re the kind of person who can pull it off.
But you know what, that’s not me, and that’s probably not you, and that’s probably not most of the people who are getting into real estate investing.
It’s okay to have a goal of getting your credit card paid off by the end of the year.
It’s okay to have a goal be moving from your studio apartment into a two-bedroom house by the end of 2022.
It’s okay that your goal is to be able to move from working a full-time job while investing to making enough in investing that you only have to work a part-time job.
Those are awesome goals, those are obtainable goals, and those are goals that you WILL meet if you get into real estate investing RIGHT NOW.
And when I say right now I mean RIGHT NOW.
Because like I said at the beginning of this video, now is the best time to get into real estate investing.
Your past is gone, and your future is made up of all the times you took hold of the present.
And I’m not trying to BS, like I said, we’ve got a policy against it.
We are just now cooling off from one of the highest demand, lowest supply housing markets that we’ve seen in the last hundred years.
The salad days aren’t over, take this as a call to action to get started in real estate today.
If you’ve ever considered getting into real estate investing, and you live in the Wichita area, consider joining my Elevate REI Mentoring student group. I started this group as an extension of Harmony Home Buyer to teach beginning investors.
If this sounds interesting give us a call at (316) 217-9675.
Claim a free, 1 hour discovery call and see how much we can help you in just 1 hour.
See what 1 hour does, not only for your knowledge of real estate investing, but for your motivation to become financially free.
And if you’re in the Wichita area, and you want to be a part of our Elevate REI Mentoring Program, then go to ww.ElevateREIMentoring.com and fill out the form on the homepage.
We are always looking for new students who are ready to take the first step on their path to financial freedom.