Your thoughts on this?
  
The other night I spoke with one of my colleagues who was doing well over 6-figures a year as a residential Mortgage Broker by himself.
…he was an A-level player who used to close at least 20+ deals a month…
… but what he told me was more than shocking...
It made me silent for a while...
You're probably familiar with the situation.
You see, between 2017 and 2020 the real estate market was a seller's market…
Every other guy was flipping properties for a living...
It was a great time to be a Mortgage Broker, there were buyers all around and banks were giving out loans left and right…
But that was the peak of a rollercoaster ride.
With new rules and regulations imposed in the past 2+ years, the market took a dive...
My friend Dan (not his real name), was making north of 6-figures a year in 2017-2020, but today feels lucky to pay his office rent…
Over the phone, when he told me his story, it was shocking ( it was basically about how he got comfortable doing the same deals and thought things would be good forever)...
More on his story later…
One of the main reasons why the gravy train stopped was due to the steep rise in interest rates.
I know most of you guys know how it affected the market,
Almost overnight, everything came to an abrupt stop!
The same property that you could own for $2000/month would now cost $3500/month !!!
Monthly payments increased but the value remained the same.
And when that happened, the market shifted from a seller’s market to that of a buyer…
Except there’s not many that can afford the high price anymore.
In simple terms,
In 2020, someone making $100k/yr could finance a property worth $500k
Today, the same person could only finance maybe $400k, he/she literally lost 20% of their purchasing power!
If that's not enough to deter you from buying, the monthly payments which almost doubled surely will!!!
Now If I was someone who invests in real estate to make passive income, I can’t increase 20% rent on a residential property in any market…
So for me to look at it as a business, doesn’t make sense anymore…
Now, if I need to liquidate that property, the ones with the purchasing power would get a deal on that.
But most won’t or don’t want to sell at a loss.
Simple as that.
For most brokers, that was a heavy blow…
The number of applicants dwindled and things went crashing down!
This made it difficult for residential Mortgage Brokers to get more commission…
Now the question is, what could be a possible solution to our current problem?
Love to hear your thoughts on this.
|
