저자: Kevin · 외국인
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2020년 7월 기준 부동산 가격은 금리 하락(10배 법칙)으로 버블처럼 보이지만, 향후 위험 요인으로 양도소득세 면제(매도 물량 급증)와 임차인 퇴거 사태(2021년경)를 꼽고, 두 위험이 겹치면 매수 기회가 온다고 주장. 세 번째 위험인 압류 사태는 2023~2024년 가능성으로 낮게 평가. 현금 확보·부채 상환·대출 사전승인 준비를 권고.
다듬은 글
Hello everyone, this is Kevin. Over 30% of tenants did not make full payment in July. Over 8.3% of homeowners are in a state of payment deferral. However, real estate prices did not fall. In fact, the opposite is happening. Buyer confidence is rising, interest rates are falling, sales are down, but prices are rising because fewer people are selling homes, creating a supply shortage that causes buyers to pay more, and it's like a bubble.
So what's going on? What do we need to know and will the housing market collapse in 2020? In this video, I will explain what is happening right now. Then I will talk about three dangers and risks that can arise in the real estate market. And after that, I will provide my recommendations. Remember, I am a real estate broker and real estate agent.
I used to be a licensed lender and a licensed contractor. I have extensive experience not only in investing in real estate, but also in helping other people invest in it. So I'm not just reading some pointless article published on the Internet. The information you will find here is unique and tailored specifically for you.
If you own real estate, are thinking about buying it, and are looking for the same opportunity to enter the market perfectly. I will provide you with scripts to help you do this. The only thing I ask is that you click the "like" button , because these videos with this intro and thumbnail are educational, and YouTube doesn't really like to promote such videos.
People prefer more sensational topics, or at least that's what YouTube thinks. So, let's try to balance this algorithm. And remember, this video is, of course, sponsored by my courses. I have courses on real estate investing, renting , property management, self-repair , a course for agents, and a course on money, finance, and stocks.
Therefore. The first thing we need to understand to realize what the hell is going on and why this all looks like a bubble is the 10X rule. The 10X rule states that people pay for real estate based on what their monthly payment will be. This is logical, because this is exactly what tenants do when they rent housing.
When tenants pay more for rent, the value of multi-unit properties increases because rents are higher. When people can afford to pay more for housing due to lower mortgage payments, the value of single-family properties increases. And they are connected to each other like a rubber band that says: if it is more profitable to buy, then more tenants become owners.
If it is more profitable to rent , then fewer people buy, and they become renters. So there's one big factor that's creating the market effect, and that's something that's just happened on a large scale, making us feel like we're in a " bubble," so we're going to talk about three big dangers that are looming.
But first we have to understand this as a starting point. The 10x multiplier rule says: If the market values a house at $500,000 at an interest rate of 4%. And then someone comes along, let's call him Jerome Powell, and says we're going to cut them to 3%. He doesn't do it directly. I'm simplifying things, but that's roughly how it happened.
Interest rates have fallen by about 1%. What then happens to the value of real estate ? Let's say at $500,000 you have a monthly payment of X. To have the same monthly payment, the same exact payment as at $500,000 and 4%. Well, if the interest rates are lower, then you will have a lower monthly payment.
So you could actually afford to pay more money for this property. So, to have roughly the same payment, the 10x multiplier rule tells us that someone who gets a 1% lower interest rate can afford to pay 10% more for that property, or $550,000, and have roughly the same monthly payment. This is the 10-fold multiplier rule.
So you have a 1% decrease in interest rates , and you get an almost instantaneous 10% increase in market value. The same applies to the reverse process. Rates go up by 1% , and you typically see a 10% drop in property values. But interest rates have risen in the past, and real estate values haven't always fallen, right?
This is true because there is a second thing, and it explains why we are currently experiencing signs of a “bubble.” The second aspect is the usual market price increase. Let's say you have a normal market growth of 5%, but then the Fed steps in and lowers interest rates, and mortgage rates fall by 1%.
Suddenly you get a 1% interest rate cut plus the typical 5% market growth you're used to. And suddenly prices increase by 15%. This 10% usually happens instantly, as it changes as rates change, and people can get pre-approved for other amounts. This happens over a period of 12 months. Now much of this has been compressed.
A lot of this 12 months has been compressed because there are n't as many homes on the market right now and people are buying faster. plus interest rates lead to a sensation like this almost instantaneous 15% price jump we saw during this pandemic. And " instantly" in real estate is like a month, two, three, right?
This is roughly what we have seen lately . So it's pretty fast. This is a very rapid movement in real estate prices. And that's causing many of us who want to buy real estate to say: I can't buy in this market. I am constantly being interrupted on price. People come with cash. Nobody is even interested in comparative assessments.
And that's true. I mean, if you look at the March data, it's old news. You need to look at the sales data for July and June now. It is now July. You have to look at recent data to see such changes. Here's what's happening. That's why we feel that there is a certain bubble, this foam in the market, and that it is ready to burst.
And there are three very real dangers unique to what could happen over the next few years. Let's talk about them right now. The first danger we may see for a market crash is known as the capital gains tax exclusion . Lawmakers like Donald Trump, people in the Senate, and others like Larry Kudlow, director of the National Economic Council (NEC), have indicated that it's entirely possible we'll see an exemption to the capital gains tax, where you don't have to pay the tax if you do a transaction that's normally taxable within, say, the next 6 to 18 months.
Here's how it works in practice. Typically, when you sell something at a profit, you pay capital gains tax if you owned the asset for longer than a year. This is a long-term tax. In real estate, you typically pay 15 to 20% federal long-term capital gains tax. This means you make $100,000 in profit, say, from a $500,000 property that you sold.
You pay $15,000 to $20,000 in federal taxes. But there are also state taxes. So, this will work if you live in a state like Florida or Texas that doesn't have a state tax. But if you live in a state like California or another state that has a local tax, you may pay an additional 5 to 14% tax on that long-term capital gains.
So in California, you could pay up to 34% capital gains tax if you sell real estate at a profit. Unless, of course, you take advantage of a 1031 exchange , an exemption, a relief, or some other loophole. But many people still choose to pay capital gains tax. They want to do away with tenants and toilets.
And, you know, this pandemic is a great motivation to just get rid of tenants and toilets. So what does the capital gains tax exemption mean for real estate and perhaps even stocks? Well, let's take a quick look at the shares. People can buy and sell stocks quickly. If I want to get some money from Tesla tax-free, I can sell my Tesla shares and then probably just buy something else.
I could buy an index fund. I could buy some Nikola or vice versa. If I own Nikola, I have made a profit. I could sell them, take some tax-free profit, and roll it over into another stock. I don't think we're necessarily going to see some crazy sudden crash in the stock market. However, with real estate, things are a little different.
See what's the deal with real estate. With real estate, it takes a certain amount of time to sell something. So, you put something on the market, then it's about 3 months before you actually get the money, and then you have to go shopping. So it's possible that if we see a capital gains tax exclusion, we might see a lot of sellers instantly, but not see a lot of buyers immediately.
So while you may see rebalancing in stocks, you may not see it in real estate. This is a big problem. That's why this is a big problem. First, in states that don't have an income tax , you'll see people willing to undervalue their properties to take advantage of this. If a property is selling for $500,000 in Florida, someone might say, " Hey, you know what, agent, list it for 475." I don't care if it's 5% below market value.
I want to get rid of this because I'm going to save 15 to 20% on taxes . I always believe in the "never sell" strategy, but it will be very tempting, especially in a state like California, where a high- income person can pay up to 34% in long-term capital gains tax. Such a person can simply say: "What the hell.
Sell the property, put it up for 450 thousand, well, 10% below market. I'm still in the red by 24%, because I save a lot of money on taxes." Again, I'm not a fan of selling, but it's a very real risk. When could this potential risk impact the market? Well, if they pass this bill by August 1, or, let's say, by August 31, it will go into effect.
Okay, we can see this between August 31, 2020 and, I would say, until the summer of next year. So, let's say, by August 2021. You could see a spike in sales as people start dumping rental properties or even their own homes en masse to take advantage of this capital gains tax relief. Homeowners have a certain privilege, right?
Again, in real estate there are many loopholes and ways to avoid paying taxes at all . This is one of the reasons I love real estate, but it is a very real possibility. I would estimate the probability in percentages, because it all depends on whether Congress passes such a law. I would say the chances of hazard number one occurring are about 25% .
That is, if the Republicans achieve their goal, there is a 25% chance that danger number one will happen and we will see an influx of offers on the market. This will create a great buying opportunity. So pay attention to danger number one. Danger number two: If Congress doesn't help renters—whether through higher unemployment benefits, stimulus checks, or some kind of rent deferral or coverage for those in arrears.
There will be an eviction crisis once the moratorium ends, which will happen soon in many regions of the country. Somewhere in August, somewhere in September or October. The eviction ban is good for now, but it will cause a wave of evictions without more support from Congress. And I don't think we'll get enough support from Congress.
Here is the timing and how eviction or lack of eviction bans can affect us. Typically, the eviction process takes between 60 and 120 days, depending on the state. In California, it will take a little longer. Evicted properties can hit the market immediately as "as is" sales, where people are literally trying to get rid of properties with tenants and problems, or owners can try to do some renovations, which will delay the properties coming onto the market a bit.
I assume we will see a combination of both options. However, as we expect a wave of evictions at the same time, it is entirely possible that the usual 60–120 days in normal times will not be met. Instead, we may see evictions lasting between 120 and 240 days. In fact, it can take anywhere from 4 to 8 months before an evicted property actually comes on the market.
This means from the day you watch this, add 4–8 months, probably to August 2020. And around that time, you can expect a lot of sales, especially from landlords who are ready to get rid of their properties because they are tired of tenants and household problems. This roughly coincides with spring-fall 2021.
So, spring, summer, and fall of 2021 are the times when threat number two is probably the most real. We will also still see some of the effects in the winter of 2021, as they will have a lasting impact. We will still see this in 2022. Threat number two, caused by Congress not doing enough to help renters, has, in my opinion, a very real 50% chance of coming true.
This means that we have a 25% chance that threat number one will occur around the same time period. We have a 50% chance that threat number two will occur around the same time period. If both threats occur—both the first and the second—it will be a disaster. That means you will literally have huge opportunities to buy real estate.
Does this mean I think you should sell the property now? Well , no, because you will likely pay capital gains tax and higher tax rates. and you will pay all those sales commissions. You know, before you know it, you'll already be paying 30–40% in fees and taxes. So why worry? So, in my opinion, this is a signal that we should prepare ourselves, because if threats number one and two come true, you need to have cash and a pre-approval letter to be ready to act.
Personally, I think it's perfectly fine to hold stocks and a portfolio of stocks, and when that happens, perhaps shift significantly from stocks to real estate. Now let's talk about the third threat. The third threat is a wave of forced property foreclosures. Due to mortgage deferrals and the length of the foreclosure process, this is not as big a threat as the previous two.
Typically, the foreclosure process takes one to three years. Honestly, during or after the pandemic, we will probably be closer to a three-year collection deadline. Instead, I expect that mortgage deferral plans will continue and we won't really have to worry much about the foreclosure crisis. In my opinion, the probability of this is about 10%, and we are unlikely to see the effects of the foreclosure crisis until 2023-2024, when we will likely face another problem— rising interest rates.
So we'll come back to that in 2023 or 2024, but if we see interest rates rise during that period, we know that will put downward pressure on prices. Add to this the foreclosures that may appear in 2023–2024. This could be your next wave of buying opportunities. So, here's what I would do right now. First, I would make sure I had life insurance, which can be arranged in 5 minutes, and I would hares.
Then check out the great programs linked below on real estate investing where you can really learn how to find great deals at below market prices. But the most important thing now is preparation. Do everything you can to increase your income and improve your creditworthiness. If you have debts, pay them off.
Now is not the time to buy a new car. Now is not the time to buy a Tesla. Now is the time to pay off debts. Increase your income, which in both cases will increase your chances of getting approved for a loan. Less debt, higher income—more chances for approval. Do your best to achieve both of these goals.
Then take as much money as you can and invest it...I hate the word "savings" so I'm just not going to say it. Invest them in index funds, individual stocks, or something else, leave them there, and plan to not touch them for the next few years while we watch these events play out . If we see a serious setback next summer due to the first or second threats, you'll need that money in quick access.
You should not have any debts. You should be prepared to get pre-approved for a loan. So, start getting pre-approved today so you know what you need to work on next year to take advantage of these great deals. So friends, these are very real possibilities. This could happen, but it won't necessarily be the crash of 2020.
This could be the crash of 2021. It all depends on what actually happens in Congress and what we see passed in the coming weeks. That's why I pay so much attention to incentives, because it directly affects our money . Thank you very much for watching. Please like and share this video, otherwise YouTube will not show it to anyone. And we, friends, will see you next time.
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