How to Time the Market!!! This Made us Millions in Rental Properties!!

Hello YouTube, we're back. It's Christian and Brandon. This is Multifamily 101. Today we're going over a very popular topic of how to time the market. And we're going to talk to you exactly how Cody and I time the market, how Brandon times the market. So what you do is we have this crystal ball and yeah, it's, it's, it's in downtown Seattle, which is the only reason we invest in the greater Seattle area is it's near our crystal ball and the reception's better the closer you are to the— I'm kidding. You can't time the market. You do not know what's gonna happen next. Now, are there economic factors you should be aware of and contribute to your analysis? Heck yeah. However, you had a Mark Twain quote you read to me today. What was that quote?

It was better to time in the market, in real estate, is better, what is it? Oh, I'm sorry.

Don't wait to buy real estate, buy real estate and wait.

Thank you, that's why we have Rebecca here.

There we go. I'm gonna keep that. We're not gonna edit this. Um, but yeah, one more time, what was that, Rebecca? Don't wait to buy real estate, buy real estate and wait. There you go, ladies and gentlemen, best transaction coordinator in Washington State.

Translated to my thing is, you know, you're never going to time the market, right? Time in the market is better than trying to time it. And always just staying in the market. You're not buying for a month or a year, typically.

Yes. Now, when Cody and I started buying, because we started buying about a year and a half ago, um, Cody, a couple years before that, he got his first few deals. But our partnership and everything that everyone's seen online on this channel has been in the last 13, 14 months. Like, we moved very quick. When we started buying, everyone was saying prices are high. It's been— market's been on what, like at that point, 11-year run, just going up and up and up?

Good since 2017 for sure. So a good 5 solid years of insanity, right?

So everyone's saying, hey, there's a crash coming, you're buying at the top of the market. And to be fair, people are saying that in 2015. It's the top of the market. It's all going to crash. Based on fundamentals, I was just looking at the economy saying, okay, well, look, we're rapidly printing money at a rate that we've never done before. There's just more money flooding the economy. We have stimulus checks coming in. We have all this crazy stuff. I'm like, okay, when the money supply goes up and housing builds go down, I don't see a real estate crash imminent. So as far as timing the market, you can look at these factors. And to be fair, Cody and I made millions of dollars in our portfolio throughout the last year. However, if we listened to everyone else, we would have sat on the sidelines, bought nothing, and would be back to square one. I'd have 2 duplexes.

I think there's probably one group that we'd like to accept for here is flippers. Yep. Flippers definitely have to kind of time the market. They're the only exception to the rule, but we're not flippers. We are long— that's more of a business model. I feel like that's not investing like what we do. And even if you were kicking yourself, you bought at the peak of 2007 and were kicking yourself when the Great Recession hit, and you held that thing till— it was 2017 when prices came back to where they were in 2007. So you just hold out, you're good.

Yeah. And if you look at real estate or really any asset, but real estate in particular, over the long run, it will go up. We're not printing less money. There's not more land being created. The value of real estate does go up in the long run. Now, if you're investing for a, hey, a 1-year, 3-month, 2-year cycle, you have to be on the market like crazy, and your crystal ball better be polished, because you need to know what's happening. That's why Cody and I don't flip. I've flipped one property that I didn't mean to flip. It just, I bought it to hold, and it made sense to sell it fairly quickly. Cody's done one flip on a house that he did for a friend who's our director of property management, Hannah. He basically bought her grandparents' beat-up house, customized it, and then gave her a deal on it to get her into housing. That's all we've done for flips, and neither of them were mathed to be a flip.

They were—

we did the math for, hey, we can buy this and hold it forever if we want. And so that is exactly how you play this game.

The only flip my brother and I actually looked at doing turned out to be a burr. Oh really? We were gonna flip it, and then we realized that the potential for net income on that thing, the return was probably better off that hold in that hot market. And we did, we held it for, we did a BRRRR and we held it for 2 years and it worked out way better than any flip would have done.

And for those on the channel who haven't heard us talk BRRRR, 'cause we don't talk a ton about it, what is a BRRRR?

It's a buy, rehab, rent, refinance, repeat. Awesome. It's a BiggerPockets term that I'm sure most of your viewers probably are familiar with.

I am guessing so, but just in case you're not, you basically buy a property, Fix it up, increase the value, and then you're gonna pull the money you invested back out of it. You can reinvest that. Yeah. Now, I won't use that— I don't recommend you use that as your only strategy. That is a tool in your tool belt. If you only do that, you'll end up with very little real estate, though all your deals will probably be home runs, which is great. You're probably not gonna hit your goal very quickly if that's the only tool in your tool belt, but if you have that as something you can do, you should be doing those consistently. You should have 1 or 2 of those going on at a time.

And I try to tell people, you think of yourself as Batman. You all these, all these cool things on your belt, right? You can flip, you can do a BRRRR, you can do an Airbnb, you got buy and hold, long-term, all kinds of like tools at your disposal. And that's kind of how I approach real estate too.

That's awesome. And that's actually why we named our channel Multifamily Strategy. Perfect analogy. But it's— you learn all the different strategies, they all go in the toolbox or the, or the bat belt. Uh, that is exactly, exactly— that's what we're going for. Okay, so We don't time the market. We don't wait to buy real estate. We buy real estate and wait. Mark Twain, Rebecca Rodmeyer. That is how we play the game. So for doing that, it comes back to deal, debt, equity, which we talk about all the time on this channel, our two things. How do I buy it? How do I never lose it? And deal, then debt, then equity is how you buy a property. However, I want to share more about what the deal looks like. A deal is buying an asset, and you can buy an asset in any market because you're looking at the opportunity, not the market. If you had, and this is a crazy example, but let's just say there was a property on market for $50,000 that netted, your actual profit at the end of the month is $1,000 a month.

That'd be a really good deal.

Phenomenal deal. If you buy it 10% down, it's a ridiculous deal, right? I'm, I'm using fake numbers here, but say it's the worst market of all time. Everything's crashed, stock prices are down, house prices are down, but you have that deal—under market price, above market rents, amazing asset. Will you buy that opportunity? So what you're looking for is opportunities. We're buying assets. Brandon, how would you define an asset? We just did this with Cody on a previous video last week, but How do you define an asset?

I define it just like Rich Dad does. You know, it's like putting money in my pocket versus taking money out. This is the whole concept that blew everybody's mind, that your home, your— where you live, your residence, is really not an asset. It's a liability because it's not producing any cash flow for you, in positive cash flow. So when I'm looking at something as an asset, I wanted to put money in my, in my pocket and grow.

And it's about that simple. You find a deal that cash flows day one. You buy it, it pays you. Now, if you're in a down market, you get paid to wait. You might not see that instant appreciation, but if we're not flipping, who cares, right? Because there's going to be up markets and there'll be down markets. And that's the only thing that I know for sure, is that markets won't just statically do this. They go up, they go down, they go up, they go down, and in the long run, they all go up.

And I don't know anybody, Christian, that regrets saying, oh, I wish I— I wish I didn't buy that property 7 years ago or 10 years ago. I don't know anybody who's ever said that.

No, I, I don't either, uh, which is part of why Cody and I bought as much as we did, is I'm like, well, if no one regrets buying that duplex 5 years ago, how much are we gonna regret buying 100 units, uh, all in one year? Do I recommend doing that? Maybe not. It's a lot of work, but it's, uh, it certainly worked, and I'm happy we bought all of it. All of our properties cash flow. I have a 6-plex that we were doing a project on that technically doesn't cash flow, but out of 100 units, I can afford that. All you're looking at is what moves me forward. Now we have one more metric that I just shared on the channel as well, and the deal should be fun. Like, it should push you. When I started, buying a duplex was a huge push for me, 'cause I just didn't know what I was doing. For Cody, I'm sure buying a 12-plex at 19 really pushed him. The 38-plex, really hard. Would I buy that same deal again? Probably not today, even though it makes a lot of money. That was a really hard project when I bought it. That was a fun adventure. Outside of that, it's just, okay, how do we buy it? How do we never lose it? If we can answer those questions, you have an asset now, and you are always trying to buy assets. As you make money, convert that money into something that doesn't lose value like the dollar does.

How about a mental asset? From that 38-unit, you, you took massive education. I mean, if you took massive action, you got massive education out of that process, right? So that asset of learning and education is huge too. I mean, it's not in your pocket, but it's in your head.

And if you're trying to time the market, you're not going to get that education. And when the timing's just perfect, you're going to be an inexperienced investor. It's another great reason why I just don't time the market. So an asset puts money in your pockets, which means a liability takes money out of your pocket. Don't buy liabilities. Say it's the best market ever. I mean, everything's just going up in value, everything's crazy. It's like, I have to get in. I've seen people buy cash-negative deals and load up on them. And a lot of people did this right before 2008. This is— I mean, people got wiped out, and a lot of people very publicly got wiped out because they just went, I'm going to buy real estate that almost covers itself, or maybe it loses a little bit, but I'm going to make it all an appreciation.

That has a finite end on it versus if flip side, if you buy something that cash flows positive $10 a month, right? Yep.

That's infinite.

You can do that at an infinite number.

That was one of our early mentors. And granted, I don't recommend having a margin of $1 a month, but his, uh, he was like, if you buy a property that loses $1 a month and say you make $1,000 a month, how many properties can you buy? Like, wow, I can buy 1,000 properties. He's like, that's pretty good. If you can make 2 more dollars a month and you get positive $1 a month, how many properties can you buy? Infinite. Now, buy deals that make you more than $1 a month. You will find a way to lose that dollar, I promise you. However, the illustration is as long as it is cash flow positive every time you transact and you can hold that cash flow indefinitely, your income goes up. In a down market, you get paid to wait. In an up market, you get income and appreciation. There's very little downside in buying assets in a great market. So that's why we don't time the market. Brandon, anything else you want to add to this segment?

No, just, yeah, don't get your head wrapped in paralysis analysis trying to time the exact— like you said, trying to nail that, that timing, because, you know, rates and prices are all going to be relative to the current state of the market. And just make it— make sure it pencils from day one, you know, that's the deal.

Make sure pencils. Absolutely. If you have a friend who is not taking action, dragging their feet, getting stuck in the analysis paralysis, not buying real estate and getting in the game, share this video with them. Like, subscribe, and we'll see you guys on next week's Multifamily 101.