514: BiggerNews, October: How Small Landlords Can Beat the Hedge Funds
BiggerPockets Real Estate Podcast
BiggerPockets
4.8 • 16.5K Ratings
🗓️ 5 October 2021
⏱️ 72 minutes
🧾️ Download transcript
Summary
Once the housing market started to slide in 2007, smart investors began buying, and waiting, for rock-bottom prices to kick in. Investors were buying homes in some of the best markets for dimes on the dollar, and have seen massive profits whether keeping them as buy-and-hold rentals, BRRRR deals, or flips. While small investors started buying a couple of houses a year, institutional investors were doing far, far more.
Private equity funds, along with REITs and hedge funds knew that foreclosed homes were a steal, and their economies of scale made it even easier to turn these financially mismanaged properties into appreciation and cash flow kings. As institutional investors began fixing up these homes, listing them for rent, and later selling them, the entire market moved in an upward direction. Now, first-time homebuyers are competing with these economic powerhouses to lock down their first primary residence or rental property.
A man who has been covering this topic for years is The Wall Street Journal's, Ryan Dezember. Ryan has a keen understanding of what influences the housing market as a whole, why institutional investors are making the moves they are, and what this means for small mom-and-pop landlords. Dave Meyer also joins David Greene on this episode to discuss the ways small landlords can beat Wall Street at their own game.
In This Episode We Cover:
Why home prices dropped to the lowest point in 2011
How the pandemic gave institutional investors more buying power
Who are the “wall street buyers” that are buying thousands of single-family homes?
Why you should “find the tenant” before finding your next property
The “carbon monoxide” of investing that most investors aren't paying attention to
How institutional investors use economies of scale to rapidly rehab homes
What small investors can do to beat institutional investors at the closing table
And So Much More!
Links from the Show
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Transcript
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| 0:00.0 | This is the bigger pockets podcast show 514. |
| 0:05.0 | The one thing that really changed was if you were going to buy a house, |
| 0:08.0 | you might get there and they might say, |
| 0:10.0 | oh, sorry, I'll switch to the office paid cash, |
| 0:12.0 | call over the phone, never gonna look at it. |
| 0:14.0 | Doesn't matter what the carpet looks like, |
| 0:16.0 | they're gonna rip it out anyway. |
| 0:17.0 | It's not an emotional decision. |
| 0:19.0 | Check the boxes, they bought it. |
| 0:21.0 | Sorry, we didn't even get to put a sign out front. |
| 0:23.0 | I think that was sort of the big shock to people |
| 0:25.0 | is when they went out house hunting |
| 0:28.0 | and found that there was somebody else. |
| 0:58.0 | I think that was just a big shock to people. |
| 1:00.0 | You know, the first thing you did, |
| 1:02.0 | is a post, |
| 1:04.0 | bigger pockets, OG Dave Meyer, Dave, how's it going? |
| 1:07.0 | Great man. |
| 1:08.0 | I'm actually back in the US at bigger pockets headquarters |
| 1:13.0 | and where all the magic is made. |
| 1:15.0 | How you done, I'm doing good. |
| 1:16.0 | It's glad to have you in the States again. |
... |
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