I Survived Real Estate 2020 National and Commercial Panel Pt 1


The Norris Group proudly presents it’s 13th annual, award-winning black-tie event, “I Survived Real Estate”. Industry experts join Bruce and Aaron Norris to discuss perplexing industry trends, head-scratching legislation, and opportunities emerging for real estate professionals headed into 2021. All proceeds from the event benefit Make-A-Wish and St. Jude Children’s Research Hospital.

First up is Bruce Norris and Aaron Norris to kick off the night followed by Marco Santarelli of Norada Real Estate Investments

Platinum Partners:


  • Norada Real Estate Investments
  • San Diego Creative Investors Association
  • The Outspoken Investor, Tony Alvarez
  • Think Realty Magazine
  • Wilson Investment Properties
  • Realty 411

Gold Sponsors:


  • 7 Figure Flipping
  • Inland Valley Association of Realtors
  • Keller Williams Corona Keystone CPA, Inc.
  • Las Brisas Escrow
  • Leivas Tax Wealth Management
  • Pasadena FIBI
  • Real Wealth Network
  • In A Day Development
  • Spinnaker Loans
  • uDirect IRA

See below for full video and resources.

Episode Notes:

Narrator  Welcome to the Norris group’s 13th annual I survived real estate Gala. The Norris group would like to thank the following Platinum partners Norada Real Estate Investments, San Diego Creative Investors Association, The Outspoken Investor, Tony Alvarez, Wilson Investment Properties, Think Realty Magazine and Realty 411. We’d also like to thank our gold sponsors 7 Figure Flipping Inland Valley Association of Realtors, Keller Williams Corona, Keystone CPA, Inc. Las Brisas Escrow, Leivis Tax Wealth Management In A Day Development NorCal REIA, NSDREI, Pasadena FIBI, Real Wealth Network. So Cal Cash Flow, Spinnaker Loans and uDirect IRA.

Aaron Norris  Good evening, everybody. Welcome to the 13th annual I survived real estate. My name is Aaron Norris. And I’d like to welcome you to this evening and thank you for being here tonight. COVID has forced us to cancel our black tie event at the Nixon library for the very first time. But we thought the content of for this evening was even more important than ever. so important. We’ve split it into two nights. Last Friday, we had the California residential Town Hall, we brought together experts and friends from all over the state to share local level of their expertise as well as different things going on in the different markets as well as the different categories like notes, flipping, realtor space, legislation regulation coming up, it was really great. And then today we have the national and commercial townhall. We purposely positioned this after the election, bringing together experts from all over the United States that also focus on different asset classes and strategies. Tonight, we learned with the uncertainty we’re facing how they are feeling about 2021 shifts they are making and possibly depending on who becomes president some additional shifts they might be making and what they see for the year ahead. I am thrilled to announce, as of today, we have crossed the million dollar mark. Yeah, yeah, 13 years later is is very surreal. Thank you for helping us get here. All the sponsors over the years, for those of you who have done walks with us and raise funny money individually, it’s been pretty cool. And typically we pay for the event. So 100% actually goes to charity. And tonight This is online, there’s no different 100% of what we raise actually does go through Make a wish. Make a wish and St. Jude Children’s Research Hospital are the recipients of all the funds. If you’ve been invited by one of our generous sponsors tonight and feels inspired to give just as it is revive realestate.com. And visit the video page to learn more about how to do that. If you are enjoying this on Amazon Prime YouTube, or any of the social media platforms that we produce this on later on, please do the same I survived real estate.com. First, take a stop at the sponsors and check out all this awesome support that we’ve had over the years and visit them and then check out how to make a tax deductible donation there. Tonight, we’re just gonna jump right into it. We did some of the more formal business last week. And so I am here. We’re going to bring on the host for this evening industry builder hard money lender with almost 40 years of experience. I get to call them pops. Welcome Bruce Norris.

Bruce Norris  Yeah, did you have to say 40 years?

Aaron Norris  Almost?

Bruce Norris  No. Yeah, it’s good. Yeah. I when I when it was kind of funny to get your triple A card and it said something this year, I never said is that Thanks for 650 years of loyal customer. It’s like oh my god, I need to see that. I want to say I want to say something here. And I want to thank you. You took the company to another level in 2005 when you joined it. And I remember the first time I taught a seminar with your touch on the document. And as people came in, and they had their 400 page document that was full color, they opened it up and they were audible gasps and it was the coolest thing. It was the greatest thing to teach off of. And this nonprofit have to be the the event that we have the I survived that was your brainchild. And that came from kind of a your brainchild of a of a radio show. It allowed us to have credibility enough to say would you come to this event? And remember the first event we had I survived the audience. We we did sell it out. But everyone was not sure what it was. They were very confused. Yeah, is it? Yeah. Is this a seminar or have to dress? Yeah, it was like and it became like our industries ball. It’s been it’s been so fun. It’s been really thanks for bringing that stuff up.

Aaron Norris  Yeah, and the Roni awards and getting to honor you know, these lifelong mentors, not the gurus, but the mentors that behind the scenes make us all better. It’s been. It’s been an honor. It’s been a really special event and to keep it going, it’s pretty stinking cool. And this year, I can’t think of a more necessary time to talk about everything going on? So, you know, ballots are still being counted as of today we’re recording this on the sixth of November. California results won’t be declared until December 11. We’ve got the proposition 15, which was the split roll commercial taxes. The knows right now we’re winning at 51.8%. I have to be honest, I, I wasn’t sure that that was going to happen. So we’ll see things can change proposition. By the way. I’m very surprised that didn’t pass. I am to me that’s, that’s a really big statement that it’s not okay to tax other people’s stuff. Which I’m I really was surprised that I thought that would be a like a go to Oh, my gosh, I don’t know, no commercial building. So yeah, let’s tax tax him. I just thought that was a very positive decision. They did the 3 million mark two. So it just sounds like you’re really positioning to really mess with a really rich people. $3 million. Buy your starter home? I don’t know in LA.

Bruce Norris  But the fact that it didn’t pass that is that surprised me. And I’m happy about that? Well, it can still change. But as of now, they the noes are ahead, proposition 19. That’s the property tax rules that allow seniors disabled and disaster victims to transfer their primary tax base to a replacement property, I believe it’s up to three times and the trade off was inherited homes, the process will change. So if you inherit a property, you’d have to move into it within the year to adopt the basis of that. So that was the trade off. And that is winning. Yes, at 51.4%. So I guess that would sort of do away with the proposition? Is it 60 or 90, where people in some counties? Just a handful, I think there’s 10 that could move their basis. So that changes things up. And of course, proposition 91 rent control. I feel at this point, it’s pretty safe no at 59.8%. So I saw some really interesting commercials across the board, even affordable housing creators said that this was bad for the economy. And that wasn’t going to accomplish what people thought it would. So I was surprised to see such a high number. And this feels like we just did this two years ago, but it was no again. So they keep coming back for more. But what’s Okay, well, let me ask this question, because it’s interesting. We had a legislative panel year ago, because it was an interesting thing. Two years ago, we said no to rent control. We just said no to rent crow control again. But in the middle, we had rent control.

Aaron Norris  Yeah, so different process.

Bruce Norris  Well, that’s just interesting. So and that was why we had the the legislative event was to ask them, okay, how do laws get enacted, and other options that are different during let’s say, a crisis? And that’s, that’s kind of what we learned is that, yeah, there can be different different avenues of getting to getting something done if you have to get it done.

Aaron Norris  So it looks right, like right now, real estate, one for the California election.  The state did not the state cannot print money. Neither can counties and cities. And there’s some pretty big budget gaps to plug. I guess the the opposite play of that is Biden looks like he is slowly gaining traction and that I don’t know, what are your thoughts? Have you been following today? sort of where things stand?

Bruce Norris  Aaron, I’ve kind of I’ve actually avoided it. I this is, I guess, my sincere hope. And I’ve kind of said this before. I just hope whoever ends up in office is able to encourage both sides somehow reach across the table and be become more American than they are Democrat and Republican I, I don’t, it seems like a pie in the sky wish. But I hope at some point that spirit takes place because we we do, we do have some serious issues that we have to deal with. And I hope that that’s I hope it’s still capable. We’re still capable with that.

Aaron Norris  I’m the guy 75% glass full with with chocolate shake. So I think we can get there. But man, we need to shift a Biden presidency when it comes to real estate. There’s a great housing wire article. They’re sort of pointing some things out $15,000 tax credit for first time home ownership, sharper regulatory, for the CFPB. You know, being a lender that’s regulated under that for for some time, it’s hard to imagine it getting any tougher. It’s it’s hard on small business. It’s very onerous. And then of course, revisiting the 1031 exchange. I know that’s going to be some of the things that we talked about tonight, as we talked to all of our experts.

Bruce Norris  Let me let me let me just bring up something because I mean, I think I think this is important. So Housing can participate. And we you and I’ve talked about this, we bought it up on other shows, there is a very simple solution. And it’s a nothing down loan to people to own their first home. And I know that’s gonna raise the hair on people’s neck. Okay. So we have, we always want to have affordable housing. LA County spent how many billions of dollars getting $1.2 billion, they were hoping to create 10,000 there on slate for 6000 at an average cost of $530,000, with some as high as 700, over 700,000 per unit and that, and where did that money come from? That was real money. We have affordable housing it is it’s called a 2% interest rate. And so what would happen in Florida if you said, okay, nothing down home loan is possible for your first home. And you qualify like through like a VA process to where you actually have some residual cash flow and but down payment is not necessary. And the fear is is going to create tons of foreclosures, okay, we’ll make a national foreclosure law just for this loan program, to where the goal is to get people to participate. And they feel like they’re part of the part of the goodies. I know the first time I owned a home, it was a big deal to me, it really was. And so you could get maybe five to 10% more homeownership percentage to own a home, nothing down 2% mortgage rate. Are you going to have a failure rate? Yes. So let’s deal with the foreclosures this way. And that’s the biggest issue. If you had a glut of foreclosures going back that had to be sold at the typical way and interfered with the comps of the other inventory. Yes, that could be bad. Let’s say you had a 10% fail rate, but the way the foreclosure process was taken care of is the opening bid. Six months after you stopped making your payments, the opening bid was the late payments, the late payment bid is bid by another owner occupant First they get that they get first shot, the loan never goes back to the lender, somebody else moves in the house. And I think society would feel like we had more participation, people that feel disenfranchised. Okay, all these guys are rich and they own stuff. And I don’t have a shot. Well, now you do. And that’s one thing real estate could really offer with virtually no risk.

Aaron Norris  I’m going to throw some other ideas at you take the same concept apply it to gentrification, that’s a dirty word. Well, what if landlords hired tired of tenants toilets and trash can work with a nonprofit and donate their house to a nonprofit and layer on this program, where consumers that were looking to maybe buy the house that they’ve been renting for a long time, they can end up participating in a program like Habitat for Humanity fixing other houses learning, getting the financial stuff that’s at CFB be set up to do financial education of what homeownership can do. And you can have families investing in the same neighborhoods that they’ve rented for a long time. But get some benefits for the landlord for doing it a charitable donation, handing it to a nonprofit that knows how to fix things up and to somehow encompass that loan with the repairs. So the landlord doesn’t have to fix it either. They’re just we just need some innovation. I think it’s possible. I don’t know why they won’t do it. You want to you want a really crazy idea. How about a loan program where you get to roll in your student education and refinance from a 7% rate into a home?

Bruce Norris  Absolutely. Absolutely. You know, what was interesting, Tom Wilson is going to be joining joining you know, he’s going to do a presentation, but he’s on. He’s on the show right now. When we went back to speak to Fannie Mae. In private conversations, there was a lot of agreement on a lot of the things that we were suggesting, but it always came up that there was no way to get it.

Aaron Norris  Oh, Dad, you cut out? Nope, not on. Well, that’s always fun and exciting. But yeah, there was a lot of agreement behind the scenes but politically, yes, it’s just hard to get things through. And especially with two parties that just can’t agree on anything and always want to be positioned to be the shining star not always fun. We are Yes, Andy technology is Grande.

Bruce Norris  Can you hear me now? I can. Okay. Thank God. I don’t even know what I did to stop it. But anyway.

Aaron Norris  Anywho Well, yeah, you were saying that when you’re back in Washington, DC the thought was, you know, it would it should go through but what was holding up this policy?

Bruce Norris  Well, well, what we were talking about getting investors more financing. Instead of having 10 loans give us more loans. And it seemed like, okay, that’s a great idea, but there’s no way for us to be able to get it get it passed. And so that’s kind of the same barrier that you have with a nothing down loan. It’s there’s this residual memory of what happened in 2006. And seven, standing in the way of something that could be really a good thing for society. And real estate could be be a player in affordable housing without costing a dime. That’s what’s great. It’s just there for who knows how long?

Aaron Norris  Well, you can always run for office. I’m just saying.

Bruce Norris  Let’s go back, let’s get back in front of Fannie Mae or Congress or something.

Aaron Norris  Well, I don’t have any more questions for you. We got this new the 6.9. Unemployment rate, which was a little bit of a surprise way earlier than anybody else thought that we’d get to. I know, that’ll come up probably in a few presentations. How are you feeling about that number?

Bruce Norris  I think probably off air, we talked about that. I think that just there’s a lot of there’s perhaps a lot of people that are not being counted. I’m all for the the economy coming back booming, but again, it’s just there’s, there’s some businesses that I just know, are going off at half speed, or not even open yet. And it maybe it’s my experience in California, because it’s different. in Riverside, it’s it’s different than it is in Florida, Florida is quite a bit more open. So if you go to a restaurant, I mean, there’s people inside and it’s it can be pretty packed. So it’s just it’s a little bit different. So I just I’m, by the way, I think it’s an amazing thing that we’ve recovered to the extent that we have, whether it’s the 6.9 is exactly accurate. This is an economy that has an awful lot of resilience. And so I’m excited that it’s improved to the extent that it has because, I mean, six months ago, we had great depression numbers. It was pretty scary. Yeah.

Aaron Norris  Well, with that, I’m going to hand it over to you to launch the night and the stage is yours. To introduce speakers. We’re a little early but that’s okay.

Bruce Norris  Aaron actually thought you were gonna do that.

Aaron Norris  Oh, that’s sorry. That’s fine, too. Okay, well, Marco. Surprise. You’re up first. Marco Santarelli. We met at think Realty. think there’s a lot of the Can you grab the screen? Mark?

Marco Santarelli  Why don’t we take a share my screen?

Aaron Norris  Yeah, if you want if you have sides? I if

Marco Santarelli  Yeah, yeah, go here. Let me hit the button here.

Aaron Norris  We met a think realty in the turnkey rental space in several different markets. And I specifically was hoping you could come out and talk about what you’ve been experiencing in the market doing that the feeling of investors, if I know you work with California investors as well, if they just can’t wait to get out of dodge. And I don’t know if you’ve experienced this. And Kathy could probably speak to this as well, is half the people that, you know have been building in Florida with the Norris group has been saying, you know, it’s been a good ride. I don’t want to be greedy. The other half is the politics are insane. I’m out. So welcome to the show. And I survived real estate, the stage is yours.


Marco Santarelli  All right. Well, thank you, Aaron, appreciate it. honor to be on the panel here. And congratulations on hitting that $1 million. Mark. I think that’s amazing. And I’m glad to be a part of it. So good job. So I, I had a challenge in putting together a presentation here because I created so many slides that I realized this is going to be a two hour talk and then I had to just take a whole bunch of them out. So I might talk a little bit quickly. And I might just kind of go through some of the stuff at a 30,000 foot level. But I think the main points will be highlighted and you can walk away with some some intel on what’s going on nationally and with some local markets. But I didn’t want to get too deep into the weeds otherwise it would just drag it on. So based on what you asked me to do to provide some market insights, Aaron, I figured I’d start off with some national trends. And I say national very carefully, because we always have to keep in mind that most real estate markets are local. And I would argue that they are actually hyperlocal you have to get granular when it comes to real estate market. So you can’t talk about housing from a national perspective all that often. But a couple of things I wanted to touch on here tonight is that home prices have been driven up and driven up for quite a while and then you ask the question, how is that happening? Why is that happening? Well, I can’t give you all the reasons but I can certainly give you some especially in the recent past. One thing that’s been happening as COVID has been driving people to the suburbs, especially from densely populated metropolitan areas. So according to the United States Postal Service, their Change of Address data As of I think last month, it was 15 point 9 million people moved during the coronavirus pandemic, that’s a lot of people, it’s actually topped 60 million at this point. And the bulk of these people are these individual moves that are moving. They’re really leaving these largely densely populated metropolitan areas like New York and Brooklyn and Chicago, San Francisco. And what they’re doing is they’re moving out to the suburbs, they’re moving to smaller cities in the suburbs. And so that’s creating a bit of a mini housing boom. And these, these smaller communities, just further out from the densely populated areas. The states with the biggest losses are the actually the states with the biggest cities, they’re the ones who are losing the most of the so called Movers. And who are these people? Well, these people are generally college students, because they can learn remotely. Now a lot of these courses are available online. And so they don’t actually have to be in the classroom all the time. And other people who are moving out are people who are not tied to the office, they can work remotely, and they don’t have to report to an office so they can actually get around and take advantage of being a remote part of the remote workforce. And then if you ask the question, Well, why are these people moving? You know, the decision is varied. But two of the main common themes is really one fear, just avoiding catching this COVID-19. I think there’s a lot of false fear being injected into the populace by mainstream media and, you know, the so called experts that keep changing their opinions on on COVID. But regardless of where you sit, you know, with that, avoiding the COVID has been one of the reasons that people are being driven out of the city. And the other are economic reasons. If you don’t need to be in the city and spending, you know, a lot on random, these densely populated areas, why not move to cheaper areas and work from there, if you can, if you can do it. So another reason is that affordability just became much better in the mid markets, the middle mark is not the low end, not the high end. And this is really due to what you guys were just touching upon a little while ago, regarding mortgage rates, you know, due to lower mortgage rates, right now, mortgage payments, as a percentage of income has fallen, making real estate more affordable from from that perspective. So income, you know, as a percentage of income, it actually fell to 15.3%, this past July, and that’s actually down from a year ago at 16 and a half percent. So even though real estate prices in many markets around the country are inching upwards, in some cases actually going up quickly. affordability is actually still there. So we’re not pricing people out of the market, in most cases, and we just have to remember that people buy based on their monthly payment, not based on the total purchase price. It’s an it’s an important factor. But But people look at what can I afford each and every month. And of course, we have this massive shortage, you know, and supply nationwide. And we’re just seeing that pinch pretty much everywhere. Now, I firmly believe as many people do that home prices will continue to rise. And the reason for that is because supply is very tight, and demand is strong. So right now baby boomers are choosing to stay put, they’re not wanting to sell their house and move out or downsize necessarily. So that limits the amount of supply coming onto the market. Secondly, Freddie Mac has said that between now and the year 2030, we’re probably going to have a housing unit shortage of somewhere between one to three, maybe one to 4 million. I’ve done a Google search on this. I’m seeing all kinds of data on this. It’s it’s a really, really wide estimate. But regardless of whether it’s a million to three or even on the high end, worst case scenario, 4 million. The problem is it’s it’s a major housing shortage. In 2017, we were short 370,000 units nationwide, which is a pretty big problem. And what does this do? Well, this leads to increased rental rates and increased property values because of that lack of supply, you know, people are trying to scoop up these properties. The flip side of that equation is the demand side and demand is very strong. Again, you know, Fannie Mae is saying we need 1.6 million housing units per year just to stay in equilibrium. Well, we haven’t supplied 1.6 million housing units since 2007, which is a long time ago, if you think about it, to exasperate this problem. Gen Y or the millennials are now starting to slowly move out of the house. And again, these numbers are varied when you look up how many people are in that that cohort, you know that demographic, but it’s around 70 million people. So if these 70 million people are starting to move out of the house and looking for rental property, that’s going to push rental rates and property values up because it creates yet more demand and then behind Gen y’s Gen Z Of course, and you know, they just turned 23 I believe it is the the, you know, the leading edge of that, again, you know, numbers are all over the place. But that’s anywhere from 68 to 82 million more people that are going to get out of the house, and start to go and look for a rental unit. So this is just a big, big, big problem. And the last thing I want to touch on is something that is being talked about a little bit more out there is this shadow demand. Now, we all heard about shadow inventory. It was, you know, the pent up foreclosures and the pipeline of foreclosures that were out on the market yet, but we’re coming out, you know, it’s there, you just don’t see it yet. It’s it’s just hiding in the shadows. But this is something that’s going to come out. And you know, where are these people coming from? The Shadow demand is really these young people that are living at home. And I’m gonna show you a slide here in a minute about this. But today, it’s at a whopping 52% 52% of young people in, in this age group of about 19 to 28, I’m close on that, I’m gonna show you the slide here in a minute, they’re still at home. And so, you know, they’re going to get out and start looking for rentals, there’s those people are wanting to get out of the house looking for more space, because they need the more they need more space in the house, they’ve now got a home office, or they’re more there are more people living in the house, you know, that’s going to increase the demand. And then of course, you know, I’m reading that divorce rates have actually increased during this pandemic, because people are just at home with each other all the time. And, you know, that just creates more demand more need for more housing needs, because now instead of a married couple, you’ve got actually two individuals that are looking for housing. So real quick, I’m going to go through some some graphs and slides here, because I know I have a limited amount of time. But if you look at this chart, you can see that as of July 2020 52% of those that are 18 to 29 years old, are living with their parents, they’re at home. These are us young, healthy, young adults. And they’re going to get out at some point probably sooner than later. But they’re going to start trickling into the market, and they’re going to start looking for rentals, maybe housing, and that’s going to create a problem. It’s a good problem, depending on what side of the equation you sit on. But it’s a problem nonetheless. And if you look at it, it’s actually a high watermark here. If you compare it, you know, back to well, they got 1900 here. But if you just started you know, these are actually decades up until the year 2000. Or actually, it’s, it’s a decade all the way across. But But look at this, it’s 52%, that’s the highest since the 1900s. Now I’m going to keep moving along here. Moving trends are pretty interesting, too, because of COVID. I just want you to focus on the top five and top, bottom five here. The recipients are mostly cities in Texas. This is where a lot of people have been moving to. The other thing is, is that when you look at the bottom five to seven, where are they moving from? It’s these massive metropolitan areas like New York and Brooklyn, Chicago, San Francisco, Los Angeles. What’s interesting about New York is the amazing 487% increase in people that have moved in 2020 compared to last year in 2019, that is a massive change. So when you see that x that type of Exodus, you’re going to see the suburbs really start to swell in terms of buyer demand. I wanted to put two slides in here about the fastest growing us metros, this is something that I like to follow because not necessarily because I want to be in those markets from an investment perspective, because not all these markets actually make sense financially speaking, the numbers just don’t pan out. The ones I highlighted in yellow are actually markets that I I’ve been in or that my company is in at this point in time. But what you’re going to see here, as I flip back and forth is that a lot of these markets make a lot of financial sense. Many of them are in Texas, many of them are in Florida. And why is that? Well, one of the main reasons is because these states are benefitting dramatically from population growth people moving in from more expensive states from blue states from colder northern states. So you know, they’re just recipients of this upward pressure in terms of rental demand and, and buying demand. So I’m not going to read all of these of course, you can see them on the screen here but, but you’ll notice that a lot of these are Texas, Florida, of course, Phoenix, Mesa, you know that metropolitan area has really been booming for many, many years. It’s just hard to make sense of the numbers there anymore. So it’s not a market you will go far with in terms of investment property, which I know was a bit of a spin that Aaron wanted me to take on this. But again, Florida, you know, Jacksonville, Florida, the Tampa, the Tampa area, which is kind of a mixed market, you’ve got a little bit of everything going on there. The Atlanta metro area has been a perennial market for a long, long time, it’s gotten pretty expensive. But you know, it’s got a population of about seven plus million people. And so you’ve got all kinds of things going on there. So now in addition to the fastest growing us metros, I also wanted to highlight migration rates, because migration to me is critically important, because that’s really where the demand is coming from people need a place to live, whether it’s rental or household unit. So this first slide is really the top migration states, the states that have been benefiting the most over a one year period. And this is really from July 2018, to July 2019, it was the most recent data I could find. Again, Florida leads the pack, over 600 people moving there each and every day, on average, it ranks number one, you know, followed closely by Texas here. But the amount of people moving into these two states really have caused a housing dilemma, especially in the major metro areas like Dallas, in Texas, and, you know, the major metropolitan areas in Florida, including Southwest Florida, which I’ll just touch on very briefly here towards the end. But Arizona and North Carolina, Georgia, you know, these are these are states that are really all taking advantage of this population growth and the migration patterns that are going on.  From a city perspective, the net, the top net migration cities are again in those same states. Obviously, it doesn’t go without saying but Phoenix, Arizona is the leader pack here. With you know, over 77,000 people moving over that one year period, Dallas is second in line, Austin, Atlanta, Georgia, of course. And then you’ve got Tampa, Florida, Houston, and so on down the line. But, you know, I don’t think any of these cities should be a surprise to anybody, just because they’re in, you know, typically they’re in red states, or zero income tax states, or warm climate states. You know, people just have a tendency to move south. Now, I looked at home builder confidence, the home builder Confidence Index shows, Home Builders and buyers feeling optimistic and confident about the direction of the housing market. What’s interesting about these numbers here is that this is the highest this homebuilder confidence score has been since 1998. That’s a what a 22 year run. That’s, that’s pretty incredible. And of course, you know, these feelings of optimism are certainly supported by the wave of these new potential homebuyers that are coming along. So I fully expect this Confidence Index to continue to go up and increase it probably break the 80 point mark. Now, john burns puts out some great content, and I love his stuff. And he does this monthly burn single family rent index, which is always very interesting to take a look at. So among the 63 markets that he tracks here, Kansas City actually came out the strongest in terms of rental growth. And this is as of September, their year over year growth was 7.7%. It was followed by Memphis at 7.5%. year over year and in Tucson at 7.4. What’s interesting, as well is that a lot of these will correlate to some of the previous charts I was showing you with Atlanta, you know, parts of Florida, growing quite rapidly. Phoenix, Arizona, of course, Dallas, although Dallas is not as as hot as these other markets. But about 70 markets are actually experiencing over 5% growth year over year in terms of rent. And that’s just the demand, the pressure that’s being generated by people moving in rapidly into these markets. So they’re benefiting from out migration from other markets with the benefit of migration into these other markets. also interesting to note here is that California, if you look at some of these coastal markets, they’re really not benefiting. In fact, in some cases, I think rents are actually dropping in the Bay Area. But people are actually moved and maybe Kathy can speak more to this. But people are actually moving away from the coast moving inland, where rents are cheaper property values are cheaper, because it’s more affordable there. And so you’re seeing rent growth actually accelerating? Well, it’s slowing down or dropping in coastal markets. And same thing for New York and New Jersey and Pittsburgh, places like that. I got this slide last month from Doug Duncan, the chief economist at Fannie Mae, and I just threw it in here just for the sake of highlighting some he gave me a couple of slides Actually, I just wanted to highlight a few things real quick. His estimate for 2021 in terms of real GDP, so inflation adjusted is 3.5%, which is a beautiful improvement over what we’ve seen over the last three years, especially this year. The unemployment rateis expected to continue to drop. Again, it’s hard to look at this on a national level. But from a national perspective, it’s expected to drop to 5.8%. When you’re looking at inflation, and you’re looking at the core CPI, you know, it’s it’s in lockstep with what the Fed really sets as their target at 2%. So we don’t expect that to change either up or down. And then the 10 year Treasury is expected to drop ever so slightly, and that might drop mortgage rates as well. So maybe, you know, Bruce Norris is correct, and that we’re going to actually hit that 2% mortgage rate that he’s been predicting for a few years now. That would be very interesting to see. At least, I hope so. Alright, I’m just going to quickly highlight a couple of markets here that we’ve been in for what feels like forever. In fact, Memphis, the first one here is a market that I’ve been in for 17 years, Aaron wanted me to just touch on some market insight. So I kind of boiled some key numbers down, just to show people that are watching here and listening some some opportunities that are out there that you can pursue. Because the reality is, is that even though rents are going up, prices are going up in many, many markets around the country, I don’t want people to feel that they’re being priced out of the market or that opportunities don’t exist, they actually do exist, it’s just a matter of knowing where to find them. Markets change, timing changes, but opportunities persist. So you know, Memphis, Tennessee is one of markets that I really like now. I tried to find unemployment numbers, and they’re all over the place, because COVID seems to keep changing these numbers. And it’s really hard to peg it to a specific month of the year. I believe the unemployment rates lower than 12%. But essentially, the job market in Memphis is it has an unemployment rate that is dropping, that’s I guess the key takeaway there, but it has a 10 year growth, that’s estimated to be a 37% increase in jobs over the next 10 years, which is a great thing, because the jobs being bring people in, that helps to grow the population. And that growing population needs needs housing, they need a place to live. And that just adds more to the equation in terms of new household formations. And you being an investor, you’re on the right side of that equation to benefit from all that. So the population growth is expected to grow by about 1.4 grow to 1.4 million people by the year 2025, which is around the corner, it’s just about four years away. Just for as frames of reference, I wanted to put median price and median rents in here. 86,000 is I found again, I find different numbers on this, but essentially median prices on the low end when you compare it to many other markets around the country, but about 86,000. But the rents relative to that median price is very high, which is why Memphis makes such a great market from a cash flow perspective, and Zillow for whatever it’s worth, whether you believe their their numbers or not, or how accurate they might be, you know, they do have a pretty solid forecast in terms of appreciation over the next 12 months of 8.4%. Now I’m just gonna quickly slide through these last two slides because I know that my time is pretty much run out. Indianapolis is kind of the what I’ll loosely call a hybrid market. It’s it has been appreciating, it’s been a solid market, again, a perennial market for us low unemployment, strong tenure job growth, the population is certainly expected to continue to grow heavily the Midwest is certainly benefiting from a lot of people moving out from more expensive states. It is more expensive market. But that’s a relative term. 143,000 is a median price, but it is well positioned with the median rents. It’s almost if you follow the 1% rule, which is not a hard and fast rules, just a rule of thumb. It’s you know, the numbers really work out there. And again, strong job growing market. Now, if you’re a person that’s looking for strong appreciation potential, or you want strong growth markets, Southwest Florida, it has been great. We’re actually covering, I think four or five markets in the Southwest Florida region. It’s almost all new construction, fortunately, or unfortunately, however you want to look at. But you know, it’s got a good strong job market, the forecast for the next 10 years is actually above the national us average of 33 and a half percent. We’ve just been seeing a lot of growth down there. population continues to grow, people are actually moving in not just because their parents live there, but because there are jobs. The median price is a little higher than what we typically see for investment properties when you look at it from that perspective. But that’s okay. We’re talking about new construction. And and you know what you don’t make up on your cash on cash returns on the front end, you typically make up with strong price growth in markets like that. And that pretty much covers it. Aaron, I think I’ve run out of time I had one last slide but since I’m at 33 minutes

Bruce Norris  Aaron, can I ask a question?

Aaron Norris  Sure, of course.

Bruce Norris  I’m just curious. Marco, what percentage of the purchases involved 1031 exchanges when you’re talking about turnkey rentals?

Marco Santarelli  I’m giving you an educated guess right now because my my frontline team would know the answer to that. But I would say that about at least 10% of our buyers coming in right now are doing 1031 exchanges. And of those, most of those are coming from California and the upper northeast.

Bruce Norris  Okay, and what what’s your reaction to a nothing down loan program?

Marco Santarelli 

Oh, he’s calling people out now. I actually really liked the idea provided that the are very well qualified borrowers.

Bruce Norris  Yeah, like a VA.

Marco Santarelli  They need to they need to prove that they can afford it and pay it and their sustainability in being able to pay make payments. Completely agree.

Aaron Norris  A $15,000. Tax Credit if Biden becomes president, what’s the that’s the nothing download. Correct? For for a lot of these markets that he that Marco was just covering? Yeah.

Bruce Norris  Trouble is it cost 15 grand.

Aaron Norris  Not from the Yeah, yeah. Okay.

Marco Santarelli  Well, I the trend has been mortgage rates dropping. And I, when I when I bought your program with a 2% mortgage rate, you know, years ago, I thought that was a bit of a stretch, but now I completely see it.

Bruce Norris  Thank God, unfortunately, the 40 trillion or it’s going to happen to

Aaron Norris  The other part of the equation. All right, thank you, Marco.

Joey Romero  Thank you for tuning into I Survived Real Estate 2020 to watch the full video in its entirety. Or to learn more about speakers and sponsors. Please go to Isurvivedrealestate.com and be sure to tune in next week for more I Survived Real Estate 2020 Thank you

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