Navigating Real Estate Market Uncertainty and Investor Strategies

A lot of people are speculating about the real estate market right now. Some property managers are concerned about how it will affect their business. You might not realize that you actually have an opportunity to take advantage of a potential downturn.

In today’s episode of the #DoorGrowShow, property management growth experts Jason and Sarah Hull talk about what a real estate market downturn would mean for property management entrepreneurs and how they could take advantage of it.

You’ll Learn

[01:15] Uncertainty in the industry

[04:21] A downturn isn’t the end of the world

[07:36] Millions are made in downturns

[09:59] Going deeper on the topic

Tweetables

“Things do not need to be bad in a downturn. You just need to be prepared.”

“Serious, savvy real estate investors get super excited when there's a downturn.”

“Millions are made is in downturns.”

“If you think it's going to be harder in the downturn, you're right, and it will be harder.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00]  Sarah: Pick up the phone and have a conversation with your investors and the ones that are like, "I can't wait," those ones are the ones you call first if and when shit hits the fan. 

[00:00:10] 

[00:00:12] Jason: Welcome DoorGrow property managers to the DoorGrow show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing business and life, and you are open to doing things a bit differently, then you are a DoorGrow property manager. DoorGrow property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings.

[00:00:37] Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners, and their businesses. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. We're your hosts, property management growth experts, Jason Hull and Sarah Hull, the owners of DoorGrow. Now let's get into the show.

[00:01:12] So we are going to talk about what?

[00:01:15] Sarah: There's a lot of uncertainty right now in the marketplace, especially with might be happening with the real estate market. 

[00:01:22] Jason: Okay. 

[00:01:22] Sarah: And what to do. What you could do, right? If we have a downturn, because a lot of times people hear downturn and then they panic and they go, "Oh, shit."

[00:01:32] It is like winter. It's coming. Woe is me. Things are bad. And things do not need to be bad in a downturn. You just need to be prepared. 

[00:01:41] Jason: So I'm thinking related to this also, this is it's 2024. This is an election year. The election cycle is such that every election year, it gets crazy.

[00:01:52] Sarah: Like, remember last one? We had COVID. 

[00:01:56] Jason: Yeah. 

[00:01:57] Sarah: So the craziest one yet. 

[00:01:59] Jason: Yeah. So every election cycle, there's like racial tensions, there's whatever it takes to get people riled up on every side, everybody's angry and there's like political tension, there's economic challenges, like, I don't know what happens, I don't know if you're a conspiracy theorist, but things get crazy every election year.

[00:02:18] And we have this big black swan event that was COVID and there's been previous ones in the past.

[00:02:23] Sarah: Not like COVID. 

[00:02:24] Jason: Not like COVID. Not like COVID. But, there was the housing crisis stuff. There's been things in the past that have happened. And so under the potential possibility that there could be a black swan event in 2024, or that there just could be some significant changes in the real estate market, how do we deal with that uncertainty?

[00:02:41] Sarah: So it's really, it's being prepared. For whatever happens, right? Because when the real estate market, do you remember? Maybe a year or a year and a half ago, when things were like crazy, you would list a property and you would get like three offers the first like ten minutes. You would always be in a multiple offer situation.

[00:02:59] Things were going way over ask price. So you had listed at a million, you knew you were going to get significantly higher than that. And we're not really seeing that so much anymore. Things have started to cool off. Things have started to shift. Interest rates are way higher. So the question always is does this continue to happen?

[00:03:18] And do we see more of a downturn or are things going to pivot and all of a sudden, "Hey, we're going to be back in this bull market with the real estate." Okay. So everybody knows what to do. I think that's fair to say everybody knows what to do when things are great. We're like, "Oh, we'll just list a bunch of properties. And then we have a bunch of investors that are buying and then like property management is easier." It's easier to sell and it's just a more healthy market. And like there's lots of new leads coming in and it's fantastic. And then the rental market usually heats up and then it's easy to rent properties and tenants might be fighting over properties and we're like, "Oh yeah, I could get this rented out in like a couple of days."

[00:04:00] When we're in a downturn, then it's like, properties sit a little bit longer and tenants aren't as hot as they were before. And now it might take a couple of weeks to get it rented out, maybe even longer and selling properties isn't really happening. And maybe investors aren't really buying. And the thing to remember is investors definitely buy in a downturn.

[00:04:24] This is in fact, when they're really excited. Serious, savvy real estate investors get super excited when there's a downturn. So when I was a property manager, what I was doing all the time because I would just connect with my clients. No, I don't ask them every month, but at least once or twice a year, ask them like, "Hey, what's your strategy?"

[00:04:43] Has anything changed? This is why I'm really big on year end reviews so that I know what is their plan for the following year?" So right now, if you haven't done your year end reviews, that's fine. Make up a new reason and you can just say, "Hey, it's the beginning of the year. I'd love to just connect with you."

[00:04:58] There you go. There's your reason. And you can always say, "Hey, listen, things are weird in the real estate market right now. Things might pick up and they might continue to get worse. So if they continue to get worse. Where are you? Are you decking cash? Are you ready to buy a bunch of things? Are you going to be trying to panic sell? Let's not do that." So that may be a separate conversation, but "where are you?" Because some of my investors, they were like, "Oh, it doesn't matter. I'm not really looking at picking anything up. I'm going to stay comfortable where I am." But some of my investors, they were like, "Sarah, I can't wait for this market to crash."

[00:05:33] They were excited. They're like, as soon as things start to dip and really when things start to dip, when there's a hard dip, they're like, "I will call you and we will pick up as many properties as we can pick up." They will do anything. So they might've been stacking cash. They might've had access to capital.

[00:05:52] They might've been able to take out a loan. They might've been able to pull equity from properties they already own to purchase new properties. People love a sale. So if you could pick up a property for 500 K, when typically it might be six or seven or nine, which investors that you work with already are super excited for a market crash.

[00:06:13] And if you don't know this. Then you are missing out. Pick up the phone and have a conversation with your investors and the ones that are like, "I can't wait," those ones are the ones you call first if and when shit hits the fan. 

[00:06:27] Jason: Okay, cool. So I think it'd be a really good piece of knowledge to have, if you aren't super familiar with all of your investors or clients situation to be very aware of which ones are ready to capitalize on opportunity. Which ones have a stockpile cash? Which ones are aware that they could pull money out of their existing properties? Maybe do a cash out refi one as soon as interest rates drop and get into more units, right?

[00:06:53] Sarah: Even if not, I would do a cash out refi with an 8 percent interest rate, and I don't care because as soon as the interest rates dip, I'm going to refi that again. Okay. Don't care. 

[00:07:01] Jason: Yeah. So we need to be aware, like, what do our clients have and what are their options that are available so that we can help them win if their goal is to do more investing and get more investments and they're thinking, "I have to wait till interest rates drop, like you just said, or I have to wait for this," or whatever it might be. And you can help them figure out how to get funding, or you can help them figure out how to price out a deal, or you've got other investors that are sitting on a bunch of cash that would be willing to go in with another owner on something, right?

[00:07:29] So you need to be aware of these opportunities because you could be leveraging this. Even if in the downturn. Yeah. 

[00:07:36] Sarah: So in the downturn, this is what we hear all the time. "Oh, but oh, real estate sucks. And tenants like they don't want to rent. And it's harder now." It is not harder in the downturn. If you think it's going to be harder in the downturn, you're right, and it will be harder. But if instead you just capitalize on the opportunity that lays just awaiting then that's where millions are made is in downturns So people that know that they get really excited when like the stock market crashes when the real estate market crashes in 2008 people lost millions of dollars And then there were people who made their millions because of what they did in 2008.

[00:08:15] Jason: They were ready. 

[00:08:16] Sarah: They were ready. They were like, " things are tanking. Let's get in."

[00:08:20] Jason: The people that were ready probably made it happen. I'm just kidding. Conspiracy theory. All right. Be ready and talk to your clients and be ready because when there's crisis... so there's this principle that when there is chaos and crisis and everyone's freaking out and fear is contagious, right?

[00:08:36] Fear is contagious. We saw it during the pandemic and it turned out to be not as crazy as we all thought it was right. But we were made to be super afraid. When there's crisis and when there's chaos, the one person that stands up in the local market to all the investors and says, "Hey, here's the plan. This doesn't have to be scary. We've got the roadmap. We know how to support you. We know what to do." In that moment, you instantly take ownership and leadership of the situation and everybody then trusts you even more because they don't know what to do. They don't have a plan. So they're scrambling.

[00:09:07] You're like, "Hey, I've got the plan." You are a beacon of light in times of darkness, people. So that is a moment where you can now shine and stand out and get more clients. When owners are like, "man, I don't know if my tenants are going to pay rent." And you're like, "I'm a property manager. I can make sure people are paying rent."

[00:09:24] They're like, "Oh, okay. I don't want to be the bad guy." Some people were stacking doors during the pandemic. And then there were some people like, "Oh, this is my excuse for why I lost a whole bunch of business and people freaked out and got out." So I think it's what you perceive it to be. And I think the goal we're talking about here is to perceive it to be an opportunity.

[00:09:43] And if you go in with that mindset, how is this an opportunity? How can I make this an opportunity? You can be the select few that lead others towards success. And make a lot of money. All right. And related to this, before we wrap up, we'll keep this a short episode. This is going to be a large focus of DoorGrowLive.

[00:10:02] We're going to be talking about... what's the theme? 

[00:10:05] Sarah: Creating opportunity in times of uncertainty. 

[00:10:08] Jason: That's good. 

[00:10:08] Sarah: Or something very similar to that. 

[00:10:10] Jason: Something like that. All right. And so we've mapped out over the two days a series of conversations, things to be taught that I think are going to help people really capitalize on growth to get you unstuck, to get you moving forward.

[00:10:25] This will be a game changer for anybody that attends and we're really excited. Like we put some serious thought into this and there's some new stuff that we're going to be talking about there as well. 

[00:10:35] Sarah: Somebody needed four and a half hours to map it out with me the other day. 

[00:10:38] Jason: She's a little bit bent on spending the weekend doing work.

[00:10:41] Sarah: So there was a lot that went into it and that was just the rough draft of the schedule. 

[00:10:45] Jason: Hey, to be fair, you make me work on the weekends all the time too, so you know this is true. She was like, "we're watching these videos today and we're doing this thing, learning."

[00:10:53] Sarah: we're learning too. Yeah. 

[00:10:55] Jason: Yes. We mapped out something really cool and we're really excited about this.

[00:10:59] So check out this at doorgrowlive.Com. We're going to be adding more and more details as it gets closer, but get your tickets. It's in may. It's going to be at Kalahari resort in round rock, Texas, which is just like a quick drive from downtown Austin, super cool area. And so this is going to be a lot of fun.

[00:11:20] All right, then I think that's it for today. So until next time to our mutual growth.

[00:11:25] you just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow! 

[00:11:52] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.