It is not a secret…I am fairly obsessed with Warren Buffett.
I have read all of his books, I read his annual shareholder letter (ok I cheat and read the highlights), and anytime he makes a big splash with an investment…Especially in 2024 when the stock market is the only thing hotter and more inflated than Taylor Swift and her Swifties. Just ask Buffett, he is not buying much these days.
Hard to find value outside of the magnificent 7 these days:
Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia (NASDAQ: NVDA), and Tesla
(Collective 111% return in 2023 accounting for 29% of S&P 500 market cap)
So where should people place their money?
Real Estate…Duh…
But the tricky part is what real estate you should be buying in 2024.
(Spoiler alert…It is not apartment construction or office space…That ship sailed years ago).
We all understand that the real estate market is…Stubbornly Expensive…And this is due to these factors:
- Interest rates were below 4.5% for over a DECADE. Then they shot up in 1 year to 8% and have hovered around 7% for the last several years.
- Huge population growth in the US.
- Shortage of new construction since 2007.
- Baby boomers are holding onto their properties for much longer.
- The economy continues to grow with very little unemployment levels.
What would it take to bring down home prices? Here are a few simple answers:
- More inventory. Construction would need to be increased to levels never seen before in America due to over a decade of stagnant growth in the single-family home new construction space.
- Sustained and dramatic recession.
- Interest rates would need to drop to 5.5% according to multiple studies surrounding buyers’ & sellers’ sentiments for when they would sell/buy a home.
Personally, I feel the first domino to fall will be interest rates, however, I think it will take at least 12 months before we hit sub 6% levels, and if that is the case, it would still have a huge lag effect before folks start selling/buying houses again like we were in 2019 which means our inventory problem will only be worse than it is today.
So when you think this through, it makes perfect sense why Warren Buffett would decide to bet on the new build sector of the market.
Warren Buffett’s Berkshire Hathaway disclosed investments in D.R. Horton, Lennar, and NVR, with a total investment of $814 million.
I am not in a position to invest $814 million dollars into large construction projects like Warren Buffet is.
We are however in a position to build on a much smaller scale in areas with low government intervention, low cost to land, low cost of construction, and fast turn around times. (under 5 months start to finish).
? So we are slowly rolling out our new construction projects.
SPECS:
These will be single-level, 1300 sq ft, 3 bedroom/2 bathroom homes in the Counties of North Georgia.
Inventory will not be available until late 2024 but if you are interested in joining our list of investors who would like to be on the reservation list, you can reach out this week to do so.
We will have limited supply to begin with so as usual, it will be first come first serve to be fair to all of our investors…The hope is over time we can grow our construction department here at Property Rush and start adding smaller multi-family projects as well.
? We feel very strongly that we can keep our price point below $285,000 all in and our rental rates for these properties will be around $2,000 – $2,200 a month.
As we get new information around this, we will share with those who join our email distribution list.
The cost projections could come in much lower (a sentence you will almost never hear from a contractor) but the truth is, we feel our team is in a position to bring to market affordable housing at a great price for our investors and a quality home for future tenants to live in.
Our mission statement is “Together We Build Your Future.”
It started with bringing turnkey renovated properties to the market…And now we are taking the next step in order to impact more lives by actually building more inventory to help solve the affordability crisis and make a difference in our community.
Want to Invest in New Construction? ? ??
