The 2008 housing crisis had a profound impact on the real estate market in the United States. Many investors lost money, and the overall value of properties plummeted. However, some investors managed to weather the storm and come out on the other side. Andrew Postell, a real estate investor and top 1% loan originator in the US, is one such investor. He shared his experience investing in real estate during the crisis, how he managed to hold onto a property that lost value, and the changing landscape of real estate investment.
Andrew's experience with the 2008 housing crisis began when he bought a property for 100% of its value. He purchased the property just as the crisis was starting, and the property value plummeted for the next five years, reaching a low of $79,000. Despite the decline, Andrew held onto the property and never lost money on it. Even during the market downturn, he still averaged 5% appreciation on the property, which he still owns today.
In the past, cash flow was not as much of a focus for real estate investors as it is now. The long-term plan was to hold the property and wait for appreciation. Andrew notes that the changing landscape of rental income strategies and interest rates is affecting the real estate market. With interest rates remaining low, it is a good time to borrow money and invest in properties. However, investors must be careful not to overextend themselves, as interest rates will eventually rise.
Andrew emphasizes the importance of education, particularly about the financial aspects of property investment. He talks about how banks tend to avoid lending small amounts, making it challenging for first-time investors to get started. He suggests that new investors begin by buying their own primary home before moving on to investment properties. He also advises finding a small local community bank that may be more flexible in offering loans.
Andrew’s career as a loan officer focuses on helping underserved clients, including those who want to invest in low-cost properties. He notes that the pursuit of happiness is not just about wealth but also about addressing personal issues, such as credit and family dynamics, before pursuing wealth. These issues can complicate existing problems, so it is essential to address them before investing.
The interview with Andrew delves into his personal life, including his approach to finances with his wife and their decision not to have children. He lists the benefits of having separate bills and bank accounts, and the challenges of planning for end-of-life issues. Andrew's experience offers valuable insights into the real estate market and the importance of financial education and planning in pursuing wealth.
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