Episode 245: A Glimpse into the Future of the Real Estate Market with Kevin Amolsch
In the ever-evolving world of real estate investing, there are few individuals who possess the wealth of knowledge and experience that Kevin Amolsch brings to the table. With a remarkable background that includes serving in the US Army and working on Wall Street, Kevin has emerged as a true powerhouse in the industry. Armed with a degree in Finance and an unwavering passion for real estate, he has successfully closed over 2,400 transactions as a buyer, seller, and private money lender.
Kevin is the esteemed author of The 45-Day Investor, a comprehensive guide that offers invaluable insights into the art of real estate investing. Furthermore, Kevin's expertise has been featured in renowned publications such as The Las Vegas Review Journal, The Denver Post, Yahoo Real Estate, Denver Business Journal, and Forbes. As a frequent speaker, Kevin generously shares his wealth of knowledge, empowering aspiring investors and lending a guiding hand to those navigating the intricate world of real estate.
THE EFFECTS OF RECESSION AND RISING INTEREST RATES
There are potential repercussions of a looming economic recession on the real estate market. They both agree that recessions can breed significant opportunities, especially for savvy dealmakers ready to adapt.
Kevin, who is particularly excited about the commercial real estate side, predicts an imminent increase in defaults, mainly due to the rising interest rates. He explains that since lenders base their loans on debt service coverage ratios, many sellers will not qualify for refinancing when their loan terms mature. As a result, these owners will have no choice but to sell, creating ripe opportunities for deal makers in the commercial real estate sector.
The residential real estate side, however, presents more uncertainties. Kevin acknowledges the need for more inventory, which could drive a spread between wholesale and retail values. High construction costs, builders backing out, and a lack of property initiatives have left him unsure of where additional inventory could emerge. Kevin speculates that possible foreclosures stemming from higher interest rates or an uptick in unemployment could increase inventory, but he remains cautious.
Finding Opportunities Amidst Challenges
We have never experienced a period where interest rates have been held artificially low for so long, leading to a population locked into low-rate mortgages. When the cost of capital rises, so do the prices of homes. With the current drastic interest rate gap, the market might take longer to adjust.
Despite these challenges, the real estate market's relative inefficiency, especially compared to the stock market, creates ample opportunities. The entry of institutional buyers and the advent of i-Buying programs may have increased efficiency.
During times of economic uncertainty, it’s crucial to underscore the importance of diversification, strategic positioning, investment discipline, and learning from mistakes. For further help, you can get a free report on Private Lending and the current housing situation at https://thepinereport.com/.
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Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.
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