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Real Estates 2022 Shadow Inventory is the Next Billion Dollar Billion Spot!
Episode 14th December 2021 • Billion Dollar Blind Spots • Sean T Shallis
00:00:00 00:11:29

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Hey there. Welcome to the billion dollar wise buys where we actually help people, individuals and companies discover the wine sponsor business and their life actually fine. A way to actually change their life, change their business, and go from just getting by quantum jumps in quantum leaps in their business. If you want to find out more, stay tuned, as you're going to learn about in today's episode, we're going to talk about the real estate bubble what's going on in 2021. How's it similar to 2008. Let's find out introducing Sean, Charles, your host, the billion dollar blind spots. I am so excited. I actually talked to you today. I'm actually standing on the patio, looking at a billion dollar mark on the line when we're recording this, but I wanted to sit down and actually answer a bunch of questions that I can get from pastors and out buyers.

So over the past six months or four months going through COVID-19, without a lot of people asking us about what's going on in the real estate market and what has, you know, the swelling down is speeding up and it's still crazy. It's still 15 buyers for every one listing. Well, let's back up a little bit. Let's look at, let's look at the blind spot. That's actually happening right now in the real estate opportunity. So what do I mean by a blind spot in the real estate opportunity for those people out there that are saying, Hey, Sean, how do I get a view on how do I buy it? When I hear these stories about these guys that bought things on the 10 cents on the dollar. Now, all of a sudden they're selling them for a million dollars. I want you that well, you're going to be in a good situation for the next six to four months in my professional opinion.

Why do I say that? Well, if we back off a history repeats itself, okay, we go through cycles and those cycles are anywhere between eight to 10 years, 12 years. In some cases from peak to peak is what it's called. When you talk to analysts, I've studied it. And when I studied at NYU, I was in real estate analytics courses and it takes anywhere from eight to 12 years, you're going to have a cycle [inaudible] and in real estate, because we're such an inefficient market. If something starts to happen, now, it takes anywhere from 12 to 18 months for an actual to hit the papers are actually for us to recognize it in the news. So it's almost kind of like when you hear the, in the stock market, they talk about why in the rumor and soul news, same principle. So our cycle was a lot longer on a cycle than the cycle of your words.

I can tell you that, Hey, the stock went up 50% in the past hour. You can actually look at the ticker-tape and see it instantly. But this is with the real estate market. It's an education business. So in order for you to see the market shifting, you have to actually be in the market a hundred homo, the pulse of the market, or you have to be really close in tune with somebody like myself or another real estate professional. That's doing real estate on a regular basis. Now, when I say doing real estate on a regular basis in a real estate professional, I'm talking about somebody that's doing more than 15, 20 transactions a year, and not the average realtor in your neighborhood who doing what the five transactions is by the way, in the United States of America, the average person, the average realtor is doing anywhere between one to five transactions as a professional

Full-time realtor. What's interesting about that as you're representing it, in most cases, the representing 75% of those sales are representing a buyer. So they're really not on the marketing side or the sales side. They're more on the introduction and the, what I call them, you know, the Mary Kay side or the van await side of the industry, you know, they're basically showing and selling the properties. So let's take a deep dive into why am I saying there's a billion dollar opportunity right now coming in the next six to 12 months? Well, ironically enough, we go backwards in time and go back to 2008 and nine, 2008 and nine. We actually opened a real estate office, which is on [inaudible] it's in hole building a company. So I decided to keep going forward. We opened our doors in 2008, probably September, 2008, something like that instantly after we opened the doors, like six months later, the market had gone down 40% in sales.

45% was the average sell price, went down in volume. So we actually went through probably what I would call the financial, the bottle and the financial crisis of 2008 and nine. And during that period of time, we had one buyer that was qualified to buy a home at 15 houses on the market. Then when we were trying to sell the vast majority of those jobs were distressed situation. They were either upside down or short-sale pre-foreclosure or foreclosure. What's interesting is what we didn't know at the time was and what we do as professionals. But a lot of people didn't see it or didn't know it was, there was what they called the shadow with inventory. So what is the shower or the shadow inventory, real estate or properties that are actually out there in the market that people live in that are either 69 or 120 days leave, except that normally in an all market, the bank or a financial institution would actually file.

What's called a LIS pendens under 60 days late, which is basically a court action or a court letter. And depending on if you're in a shape where the real estate process is done by court order and somebody sheriff sale depends on which one you're in, but either one they have to, after 60 days, they're going to notify that person that, Hey, you're late on your mortgage. And if you're continuing to be late, we're going to foreclose on you. We're going to take your house. You know, what's interesting is we can ship track. Those what's called lose credit is being filed across the country. And it's a very, it's a very ambiguous, it's an important indicator or task of the market's income. What's interesting. During 2018, we have about two headlines. People go out and work in the financial model over there and showing off over the next two years, 24 to 48 months, those people, most of them went back to work.

So it wasn't, it wasn't that bad. Most of the people went back to work. Let's fast forward to 2020, 2019, 2020, the high Tacoma. What happened there is two 22 million people where I work again, 22 million people went out of work at the height of COVID. A lot of those people weren't going to work, whether by choice or because they didn't have a job offered to them. What do we mean by that? Well, during the period of time, a lot of these people actually got paid more, actually stay home than they were making when they went to work were slightly different. So they said, you know what, screw it. We're just going to say [inaudible], let's just say [inaudible], what's funny is a lot of people, not people back from work, we're going to still have these properties. The interesting thing is though, is the reason why we don't see that in the market right now is because we have memorandums.

Like they didn't 2008, the government stepped in and said, oh my God, this crisis was not people's fault. Let's give them a break. And let's put a memorandum in place that says we can't foreclose on these people, the bikes and the finance students get foreclosed on fully wet after they opened up the gates. And the whole back in 2008 months, not only the price has been a 45% and the volume of sales go down 45%, just from the financial model. It went down to the additional 5% in most markets in most markets in the primary areas like the tri-state area or the Metro areas like Metro markets. We saw prices go down anywhere from eight to 12% when those property came with the market. Now how comb, like you're talking in 2008, we had over 800,000 properties come into the market as a result of the shallow inventory.

So he heard a thousand properties. What does that end up in the grand scheme of things? When you're only selling 7.5 million home in the United States on a given year, these are already thousands of big chunk of property. What's interesting is if we do simple math, right? We had 2.2 0.5 million people out of work with 800,000 people that were in receivership or in some kind of distress situation that came into the market. So that's a pretty good, that's a pretty good chunk of people. Okay. Fast forward, 2020 19, 2020, we have 22 million people out of work. A lot of them not going back to work. What do you think the odds are that we're going to have anywhere between 1.5 to 2 million properties that our demand, some kind of a receivership or some kind of a distress situation. Now I'm not saying, hurry for them. Say when honestly, I mean, I'm sorry that snack, and then isolate.

I want to see a robust, healthy, real estate market. But if you're asking me where there's a blind spot, where you can have an opportunity capitalize on Morton and my professional opinion, that market is on its way. It's going to be anywhere between 12 and 16 months from now, 12 to 18 months probably is a better number where we're going to start to see those properties coming into the marketplace. We've already started that with the memorandums, but it takes time for those properties to go through the process. How long does it take? They're probably people in there and try and get them back and right the ship over the next 30 to 60 days after the memorandum, once they figure out that that doesn't work, then they're going to start to file some kind of legal action, which is a list pendants file. Well, they filed Elizabeth is that's going to be a 30 to 60 day window of time that that's going to give the bank before they can now go in and try to foreclose on them.

That process is going to take any work. I would say [inaudible] the amount of workloads that are going to hit the banking system and also hit the court system. So, you know, and then the jurors in a state where they do. So it's going to take the sheriff that whole, the process. So if you're looking for an opportunity in the real estate market, if you wanted to capitalize on the market, now, here's what I'm telling most of our customers, the people that are thinking of selling and wanting to find yours are better suited to sell that property. Now take the money off the table, put it on the silos because bear in mind during COVID-19 only 2008, where we had one buyer in 15 properties, where when you have that situation property to work-wise in COVID, we had one house for sale. 15 Myers is all prices up 15, 20% more than the rework intrinsic value of the home is even more.

So if you're the list that you're, you're smart and you hide a, see the, you see the storm coming across the, across the ocean before anybody else, if you're thinking that you want to sell that house for the next one to five years, selling now put the money on the sideline, wait, anywhere between 12 and 18 months, you can probably buy your own house back with 10 to 15% less than you're paying for now. That's right. In my professional opinion, you're going to see the market dip about five to 10%, depending on where you are, as you're on the outskirts of haves and your resort communities, you may see a bigger jump in prices, but again, you we'll get for an, the goal would be as you sell your house on the market and wait for the market to correct in the next 12 to 24 months, and then have the cash on the sidelines and be able to buy out the property or to actually ride the wave again, and then ride it for another six to eight to 12 years for that property.

Appreciate it again, and then go resell it. So again, if you're looking for a billion dollar blind spot, whether it's in your personal life, your business stay tuned on this point. Guess we're going to talk about holes in businesses and holes in your personal life that you just took. One little thing, one little tweak. You were able to change it and you can change your life. Change your ways in your business, your personal life. Hey, I'm Shawn shells. I'm your host at billion dollar mine blind spots, where we actually help you to discover the blind spots in your business, in your life to make the huge impact that help you to go from where you are, to where you want to be. Except we're going to shortcut the process and we're going to make a quantum jump in your business in your life. Look forward to talking to on the other side, Sean,



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