The Housing Crisis Is About to EXPLODE

everything crashed and you made them a ton of money. All of these very intelligent, datadriven people right now are all saying the same exact thing. And you may not have heard about it because the news doesn't necessarily report on this. It's something that I pay attention to every day.

Try to follow the smartest people in finance and economics. I want to understand where things are headed next so I can position my business, help you guys position your business, where I'm going to put my money. If I don't have any money, how do I navigate it in that regards as well? Because how you play the game in a down market is completely different than how you play an up market.

So, don't let this information scare you. We're going to be talking about the data today of where things are at, what you need to know. It helps you understand the situation and what can possibly happen, and then how to win regardless of that information. Because we've been through debt cycles before.

We've had these issues before. Other countries have come through them. It just takes a period of time and there's ways to make money in every single type of market. It's just you have to find your niche and you have to be willing to change what you are doing and what you are focusing on every single day.

Does that make sense? If you are not willing to change what you are doing every single day and what you are learning and how you do things, you will go out of business by default as an entrepreneur. Amazon started off selling freaking books. What do they sell now?

Web hosting AWS it's like like yeah they sell they have Amazon and they sell you pack you know they they deliver packages to you but really their biggest thing is cloud is cloud stuff now so you may start in one business and end up doing something completely different why because you completely you because you adjust with what the market is telling you to do and so that's what this is about so what we're going to do first is we're going to dive into the data I always promise to tell you guys the truth of where I see things where I'm placing my money how I'm playing the what agents can do to make the most amount of money. And I'm not talking about the most amount of revenue. I'm talking about profit. When I say money, who cares about revenue?

Who cares about volume? Who cares about units? All that matters is the amount of profit that goes into your bank account. And then what you do with that profit.

Do you reinvest it in your business? Do you spend it on your lifestyle? Do you buy it on investments to create new cash flow? What are you doing with that money?

Or do you have no plan? In which case, if you have no plan, then you're at the whim of the market. And we don't want you to be at the whim of the market. We want you to take control of your life and your finances.

Sound good? All right. That was like a a big intro to to this. Again, this information is for information only.

This is not to scare you or make you run away or hide or anything like that. So, just want to put that out there because that is not the purpose of this, but you do need to know it. The US debt was downgraded by Moody's. So, I just want to roll let's roll back to April 9th.

On April 9th, what happened? Trump decided to say, "We're not doing all these tariffs. We're doing a 90-day pause." Yes or yes? 90-day pause.

What happened? Stock market went up 20%. Why did he do that? It's because they had a treasury auction that day and nobody showed up to buy our treasuries.

And when nobody shows up to buy our treasuries, our yields spike, our our cost to borrow spike. And we're in so much debt, we can't afford that to happen. So the only way to bring buyers of our treasury debt back to the table and reduce rates was to get rid of the tariffs. That's why he did it.

It wasn't something he wanted to do. If we did not do that, then we would have had an immediate debt crisis in this country. Make sense? Fast forward to what happened on the US debt downgrade by Moody's last Friday.

The reason why the Moody's downgraded the US debt is because there was a tax bill that was proposed that would add about $4 trillion to our deficit, which people internationally who who we borrow from were like, "This is unsustainable. You guys are not taking your debt seriously. You need to get your debt in line. You need to start cutting jobs.

You need to start cutting positions. You need to start cutting contracts." And the and unfortunately, the politicians are not doing that. And so what's the consequence of that? Interest rates go up.

You might have noticed recently that interest rates have been going up on mortgages. Yes, we were 6.5. Now we're up to seven again. It could go to 7.5.

It could go to 8%. The Federal Reserve is responsible for basically influencing Treasury rates and mortgage back security rates, mortgage rates through buying those securities. And starting two weeks ago, they started buying the securities because other countries started dumping our debt. They're monetizing our our debt.

And what that does is it it artificially creates lower interest rates, which then drives inflation up. When they print more money, that's the definition of inflation. There's more money chasing the same amount of goods that causes prices to go up. They're doing that at a rapid rate.

Yesterday, they stepped in and bought $50 billion. Now, that's actually a drop in the bucket. It may sound like a lot. It's not that much, but this is a huge problem and we expect interest rates to continue to move up because they're not the the politicians are not taking our debt seriously while other countries and other investors are taking the debt situation seriously.

All right, so here's the 10-year Treasury rate that popped on Monday. The Fed came in and bought this all the way back down to 4 point is like 4.47 4.48 48. Today, it's back up to where it is now because people continue to dump our debt because the risk of us defaulting when we have so much debt is higher. You also might notice that there's credit default swaps, which means you get you can basically buy insurance on defaults.

Those have spiked recently, meaning that the cost to insure it has basically 3xed in the last two weeks. So people are expecting this debt crisis to just continue to get out of control and for the US government to potentially default on its obligations. In which case interest rates could go up to 12, 13, 14%. Right?

Which would stall the economy. We'd have a debt crisis. At some point our government has to take the debt seriously. And this is just the story behind why mortgage rates are going up.

It's a debt problem. Just like if you're a consumer and you have a debt to income ratio that's way too high, you're going to get denied for your loan or they're going to give you the loan, but your interest rate is going to be like 20%. Make sense? Here's the other problem.

Not only is the government in debt, consumers are loaded up with debt. Look at this. The red line is the FHA loans. This is the purchase loans with total debt DTI means debt to income ratio greater than 43%.

The maximum amount. So FHA has 65% of people who have a debt to income ratio of 43%. That's crazy. Same with VA, right?

And they're only putting 3.5% down to 0% down if they're VA. VA is at like 56% 57% of applications. The people buying right now don't have any money if they're FHA or VA generally. That's what this chart is saying.

They're already loaded up with debt and they do not have cash. If they're buying right now in the marketplace and prices come down 10 to 15%, which is our projection, they're going to be completely underwater. They're going to walk away from their house. They're going to give it back to the bank.

We're going to have a bunch of foreclosures just like what we had before. This is just the reality of it. They're running out of cash. This is the US excess savings.

We saw the savings rate go up very significantly because the administration basically sent out $2,000 to everybody during COVID and it gave us this huge boost of savings. They all the savings for cash has been spent. Okay. So, they're loaded up with debt and they don't have cash.

John, I got a question for you. Are you expecting us to get a bunch of foreclosures in the near future? Yeah, absolutely. Yeah.

I mean, I don't know what a lot is, but we're we're definitely seeing an influx of short sales currently. And foreclosures generally because Florida is a judicial state, it has to go through the court system. You might have heard that term before, non-judicial, judicial. Yep.

So, if it because of the judicial system, it can take a year to two years for this pipeline of foreclosures to process through. Another thing to to know is that the administration that was in charge previously for FHA and VA, they refused to foreclose on anybody who got an FHA or VA loan. So, they what they did was they did loan modifications and they moved all those delinquent payments to the to the end of their mortgage. And the the new administration has decided that they're just going to foreclose on these people just like with the student loans.

So we're about to have like double than what it would be since they would not allow the pre the foreclosure in the previous administration. Correct. Uh yes. So defaults currently for FHA just to put in perspective 15%.

That could go to foreclosure that we already know of. It's so bad, Lindsay, that they they stopped publishing the data on the FH on the HUD housing website. Okay. Thank you.

Yeah. So there's definitely and this is what I'm talking about. You know, if you haven't sold your rental yet and it doesn't really perform that well, like this is your last straw. I mean, we've been talking about this for two years now, but this is really your last chance to get out before we see this massive influx of inventory over the next two to three years pop on.

But look at this. Like, this is credit card delinquency that that has come up. It's worse than it was during the tech bubble. All right?

And it's this is just the beginning. And obviously, when people are delinquent on their credit cards, they start becoming delinquent on everything else. And that's going to impact credit scores. There's co-borrowers on there.

The student loan thing is a is a massive problem because those people who got student loans who guaranteed their loans, usually the parents co-sign with it. So if they're not paying if they're not paying and their parents aren't paying, then there's multiple people are getting hit to their credit 150 points. They're not going to be able to purchase because their their credit's not going to qualify anymore and or they'll qualify, but the rate will be so high the payment makes no sense to purchase. All right?

So that you know when people people come to me and they're like we're not a you know where we hear people at these conferences I think there was one recently at a local title company and they're like oh everything's like rosy and there's no problem and blah blah blah blah blah. It's like dude you don't they don't have the data. They're not looking at the data. This is actual data.

This isn't even me saying it. This is just like here's the data. This is what reality is. Um so I'm just sharing what reality is.

Here's here's the highest rate of uh student loan delinquencies. They're concentrated in the south. So the majority of people who aren't paying their student loans are in the south. Here's Florida here.

Pretty interesting, but it's starting to skyrocket. And this is going to suck a lot of cash out of the system for potential first-time home buyers. We're going to look at I think I have a chart in here that shows the age, the average age of a home buyer. The median age of a home buyer today is 58 years old.

And the median age of a seller is 58 years old. So, it's basically the boomers trading their properties back and forth to each other because they're the only people who have pent up money and the people who have money to actually be able to purchase. All right. So no wage growth.

This is the other issue when accounting for inflation. Wage growth is just not is not there. So this is the dollars left over after food, gas, personal interest, rent for median household. So the the real the real line is what you want to look at.

Nominal means with inflation, real means without inflation. So the wage growth hasn't been there. This is especially true in a city like Jacksonville. We don't have a lot of people with highpaying jobs from New York or California or other areas of the country would relocate here.

And they would get the best of both worlds, right? They would be able to get the income from the north, but be able to live afford and without state income tax in the south and get the the wages from the the north, but the lifestyle of the south and the affordability of the south. They're losing their jobs. So, they're getting returned to office.

They're getting cut. They're getting replaced with AI with virtual assistants. I've got a couple friends like that. It's it's awful.

They cannot find anything in Jacksonville that pays them $300,000 obviously, right? Like you're lucky to get six G's, six figures in uh in Jacksonville. So that the when the wages don't keep up, it's a huge it's a huge problem. So the average income that you need to buy a home in the state of Florida is $125,000.

So this map shows the median household income recommended for buying a three-bedroom home, you need $125,000. So that would generally be a dualinccome family or a parent co-signing with them. And this comes from realtor.com April 2025. The math isn't mathing.

So this is even realtor.com is like this makes no sense to buy a home right now. The baby boomers, their median household income was $23,000 and then the house was $83,000. The median home prices for millennials 486,000 but their incomes are 74,000. If you really just like 3x it, kind of compare it to the baby boomers, you would you expect prices to be around 220, not not 468.

Make sense? So, so if you cut it this way, this isn't like a perfect chart obviously from an adjustment, you know, expectation, but if you cut it this way, it's like prices are 30 40% over overpriced, which completely makes sense because we had a 52% run up the last 5 years, last four years since the COVID boom, which was all just because the government came in and just handed money to everybody by keeping rates low, right? Made the payments really low. So, that's why the consumer feels awful.

Everything's really expensive. They're maxed out on their credit cards. They have no savings. They're loaded up with debt.

So, the consumer sentiment actually plunged to the second lowest reading of all time. Okay, which is which is kind of crazy. So, consumers are feeling it right now. First-time home buyers cannot buy houses.

They're having a really hard time. This is like the lowest level of first-time home buyers share of home purchases and coming down. How can you? I mean, if you came out of college and you got your first job and you're making 55k a year and that it's going to cost you $125,000 to buy $400,000 house like for your income, you'd have to like basically nearly triple your income um to be able to purchase.

And this is what I was saying about the median age of home buyers is now above 55. This is the chart that came out about that. So, you can see over the years, you know, you used to buy your first house in your 30s. Now um because of the situation that we're in.

It's like near near 50s. This is a cool chart. 52 million people cannot afford a $200,000 house, which is crazy. Let me see if I can move this back over here.

Zoom is kind of silly sometimes. One sec. Here we go. So, this is this came out from the National Association of Homebuilders.

52 million people cannot afford a $200,000 house. So, you could see in different segments the their income is just not there. So this is U US households a million by highest price home they can afford 2025 right so the credit bubble is impacting real estate why it's simple especially in Florida the builders overbuilt the last four years right they thought this COVID demand that was coming from the north and the west would continue forever they thought it would continue forever so they built like like crazy this always happens in Florida builders get over their skis they try to take advantage of the situation and sell as much as possible as soon as possible and they're getting they're getting stuck right now there's communities that I've heard of that have, you know, 320 homes that they need to sell this year and they've only sold like 16 houses. So, they're like 85% behind their schedule this year.

There's a slow slowdown in migration to Florida. So, this is something that's come up the last two to three months. We're not seeing as many relocations from the north or the west. People actually migrating out of Florida.

This has to do with some policies of second homes with Canadians. That's mostly down in the south, not up here. But up here, the real big issue is the hedge funds stopped purchasing and that's allowed a ton of properties to come back on the market. The buy like they were 35% of of buyers were these hedge funds for the last 3 to four years prior to 2022 and they stop buying.

That's why you see all these wholesale operations kind of disappear overnight because they don't have a buyer to sell the property to. And then the local population, as we've already talked about, is priced out, right? Like the people who already live here, they can't afford this. So prices have to come down.

Realtor.com says you need 70% more income today to purchase a home than prior to the to COVID. Home prices rose 52% from 265 to 400,000 on average. Mortgage rates went from 4% to 7%. I mean, we were down in the twos at one point.

Um, affordable homes purchased by hedge funds and the wage growth is not enough. That's really the summary of of what's going on here. This is the demand for second homes fell to a six-year low in in 2024. So, you can see people are just not buying their second homes here.

I'm really curious to see what 2025 came out. 10.8% of homes in Florida are second homes, by the way. It's actually a pretty good chunk. And this has caused realtors to struggle.

I a lot of realtors out there are struggling. And uh they need to adjust. You have to adjust. You have to step up to the plate.

We're at the lowest number of existing home sales since the great financial crisis. It's likely that we'll we may continue to have a little bit of a decline in number of units sold if interest rates continue to move up because of this US debt crisis. Okay? So, it's possible to see a few there will be a point in time.

So, here's the good news. There will be a point in time where it makes sense for buyers financially to jump back in and start purchasing like crazy because sellers will finally become realistic on reducing their prices. It will happen and that will and then you'll see you'll your business will grow like 30% a year for a couple years like that's just how it is especially in Florida there will become a time so you want to survive this market cycle and then thrive on the other side of it you just need a longer term view of everything and then purchase apps um are below the great financial crisis as well okay so the purchase applications to buy and uh there'll be a lot of people who say oh the market's doing really well for purchase and they refer to purchase. It's like a weekly thing that comes out.

It's just a lie. It's so dynamic week to week. What you need to do is look at the trend, the trend line of where they're at. The prices are shifting very, very quickly.

This is price reduction surge as sellers overestimate the market. 18% of listings saw price reductions in April. This is across the country. So, you can see the country is not all the same.

You can see that Arizona is getting crushed. Florida number two. You're starting to see Texas. Texas is their home prices are down about 20% already.

Um, you look at North Carolina, the Raleigh area. You know, in South Carolina, they're getting hurt quite a bit as well. This data is laggy. I don't think this is really accurate data.

I think it's actually a lot worse than than this. And definitely locally, it's worse than this. I'll show you the data. And prices are down in the south, right?

The north is doing fine. So, it's basically like inverse COVID, inverse pandemic. The places where people were relocating out of and their prices were dropping, now people are going back and buying those same areas. The other issue is that like we built we so overbuilt the sunb belt like crazy.

Builders were just going nuts on it. And I think that's a a big contributor to it. So, you know, the market is softer, but my house is so special. Let's hold out for more offers is what most sellers are saying.

There's just a huge disconnect between sellers and buyers right now and what buyers are willing to pay and what sellers want to get for their house. And it takes time for sellers to become realistic, right? Some of you be like, I gave them all the data. They just won't do it.

I gave them and then you keep hitting them over the head with data every single time. It's either going to be you or it's going to be another agent that's going to sell that house if they're truly motivated. If they're not truly motivated, I wouldn't spend time with them in this market. It's a waste of time, especially I actually went on a listing appointment like two weeks ago and we just listed in Palm Coast and he goes, "Well, I want 419." And I said, "Listen," I said, "I have a house that I had up for sale two years ago, and they have now went through two other agents, and now they are at the price that I told them to be at, and it's still not selling because it was on on the market for too long, and it was overpriced." I said, "If you want to sell, we have to sell at the price at the right price." And then I screenshotted what you posted about sellers need to sell before July.

Good. Amen. That is correct. Thank you, uh, Lindsay.

Appreciate the confidence in uh the data because it's like you know we we I I probably talk just so you know Lindsay to about 15 top agents per day. Mhm. Not a not even just in Momentum outside of Momentum and around the country. It everybody's saying the same thing that you just said.

It's like it's the biggest waste of time to take an overpriced listing. You need to interview your seller more than they interview you. You need to decide if you're going to pay $1,000 to prep the listing, pay for the photos, help with the inspections, drive out to the house, get the sign, write all this stuff, maybe make a promo video. You need to decide whether or not it's worth spending that money or waiting for somebody who's actually willing to sell because everybody's got listings.

Shoot, momentum's up 38% from last year in active listings. We're killing it on paper, but the only thing that matters is number of units. We are up 12%. Momentum's up 12% from last year in number of units.

So, you guys are hustling. You're you're you're doing the right things. I still think a lot of agents are overspending and they need to check their personal budgets. They need to consolidate their debts.

They need to cut their spending more and they need to go into more organic lead generation. And I think a few of us are a little bit too slow to do that and they're let and you're letting it these problems drag on just too long. You need to cut fast and you need to cut deep when this type of change happens. And I really encourage everybody to go back and look at their financials and sell stuff you don't need.

Get rid of the stuff that doesn't add any value. You would be surprised at how little you can thrive on. And I'm not saying survive because you thrive. Once you simplify things, man, it feels good.

You go to sleep at night feeling really good when you kind of simplify and make things cheaper. But sellers need to become realistic. And there's a big gap right now. This is my favorite chart.

So, if you're on here, like you're going to get complete value out of this chart. I posted this in the Facebook page. I wanted to go over it on this call. We've only got a couple minutes here, but we're we're probably going to run an extra 10 minutes late if that's okay.

Okay, I've got a bunch of data to go through, so just hang on there. This is the monthly ship shift in US home prices. This is according to the Zillow home value index. I want to go over this because look at this.

2000 to 2006, we saw all this hot market. The market was super hot, right? Blue is the prices going up. Red and yellow are the prices going down.

We hit the crisis. Look how long it took. 2006, you were starting to see signs of decay in the market. It was a 5-year period before prices started coming back in 2012.

Okay. So, a downshift in a market can take five years to hit bottom to hit bottom. So, you need to be thinking about how you're going to position yourself in a in a decreasing market that could be up to 5 years. Then we had 2012 to 2022, a decade of just pure home growth.

I mean, you could buy stuff back in 2014 for like 160,000. It's now selling for 450. Numbers may and then and then rates are just, you know, 7%. It it's not possible.

The wages have not increased enough to keep up with that. And then look what happened. March 2022, the Federal Reserve came out and they said, "We're going to raise rates from basically zero to 4.5%." Short-term rates and then instantly, usually has a lag and six to eight months later, you start seeing the decreases in the prices. You see seasonality pick it up and then you see the rest of the se.

So, so here's this is I bring this up because we're we're about to go into the end of the year. You need to sell before July. You need to sell these listings before July. This chart shows that or you could be stuck in a downturn that could last up to 5 years and you could be you could be chasing a falling knife.

So, what a lot of sellers do, they chase the market down versus being realistic today and getting it to be where it needs to transact and they're like, "Well, the last comp was this. Comps are out the window. Comps don't matter. You're pricing against other active listings.

The only other thing that matters is the competition that's against you. You're pricing against new construction, who by the way are buying down rates to five and 4%. And they're brand new. You're you're pricing against new construction and you're pricing against the other active listings in the neighborhood.

You need to be 20 $25,000 less than the other activives in the neighborhood for the average price point around $400,000. You need to be that much lower if you want to be competitive and actually move your house. The longer the house sits on the market, the less value it has. Yes or yes.

So, it's your job as an agent, show them the data. And by the way, the data moving forward is going to be ugly because guess what? You guys saw the numbers. We're our pendings are down 31.3%.

For April, this year versus last year, 31.3%. That's a lot. So, what's next? The speculators on houses, a lot of home flippers are losing money 30, 40, $50,000 per flip already.

One thing you may not have heard of is the f Philly Fed did a study that showed that there's occupancy fraud, which is basically people pretended to get an FHA loan that they were going to live in the property and then actually turned it into a rental. They're expecting that one-third of investors were doing occupancy fraud and they're going to start suing people and they're actually will pay you if you know somebody who did occupancy fraud. The government will pay you for exposing a house that they said was a was a primary that's not a primary. Existing defaults on the FHA and VA loans will start working through the system.

I don't know if you guys saw the demographics for Florida that came out, but there's more deaths happening in Florida than births. So, if we don't have people migrating here, our demographic situation in Florida is going to be upside down. There won't be any buyers in 30 years for houses here because our population growth will start declining very rapidly. And then of course the student loan defaults are are ruining credit.

But what what in the world, John? I see the stock market flying. Well, the stock market's overpriced. The stock market can be completely disconnected from reality in Main Street, right?

There's Wall Street and Main Street. Wall Street can be completely disconnected from Main Street for a very long period of time. Just like Michael Bur had his situation, he saw it coming from 2005 and it took three years for the Lehman Brothers collapse. And every metric shows that the stock market is over overpriced by about 30 to 40%.

Same as same as real estate. Why? Because the government printed 30 to 40% of money. There's no actual more earnings that's happening.

It's just because more money was printed by the government. So the value of the dollar is going down. So it's fake. It's all fake.

And you if you watch Robert Kiyosaki, regardless of what he says some crazy stuff. You you listen to Robert Kiyosaki. He's the author of Rich Dad Poor Dad. He's like a gold guy.

He loves gold. He's been saying this for like a decade about the government needs to stop printing so much money, but every time we get in a crisis, they start printing stuff out. But you can see even from 2007, it took a year and a half after the red flags came up for the market to really capitulate. A year and a half.

So, you can be wrong for a very long time and then be right. Not going to say this is going to happen this time, but um yeah, I'm actively shorting the market right now. Got to short on the market. You could be wrong for a very long time and then be right.

Michael Bur, he sold all of his stock portfolio except for Estee Lauder. Anybody know Estee Lauder? It's makeup company. It's recession proof because people buy makeup regardless of what they buy.

No matter what, they're buying makeup. So, he doubled his position in Estee Lauder and sold everything else and then shorted the MAG seven, the large seven companies in the stock portfolio. I again, I follow really, really smart people and I watch what they're doing. Thankfully, the cool thing about today's market is you can follow these people on Twitter or sorry, X or Facebook or they have Substack articles where they release all this information of what they're doing and you can see what they're doing.

So, here's here's on the ground. Here's Jacksonville. All right. So, we had the big view, the credit issues.

Obviously, I didn't even talk about auto loans, which is like another, you know, market that's starting to go upside down, but this is Jacksonville data. This is the hot sheets. You can find it on MLS. We're up, sorry, I should say 8.83%, 83% not 883.

8.83 in one% in one week. Oh, sorry. No, it's it's 883 net new listings in one week for 7.3% listing growth in one week. What you do is you take the and you can you can toggle this in the hot sheet one week.

You take the new listings and then you add in the back on market. You subtract out the active under contract and you subtract out the pending and that gets you a net new listings of 8.83. Now, the reason why you do not see listings like explode, like why are we not at like 20,000 listings right now is because every week there's like a thousand listings that are expired or being cancelled. And these listings will come back on when they usually come on in the next 90 days.

60% of these listings that expire or cancel will be back on the market in the next 90 days. And the listings will continue to stack. So, my prediction is by the end of the year, we could see 18,000 active listings in Nefar. We're currently about 12,000.

That's a significant significant change in number of listings. And by the way, this does not even include new construction inventory, which we call shadow inventory. That's not even being listed on MLS. Yes.

So, this is not the full picture. You can also see the number of closed sales. Usually, we're around 2,000 um per week. So, it's about 1500 right now.

So, we're down. We're down about 25% in closed sales. And the pendings are down for the future. You can also see that 3,800 had a price change.

There's 12,000 listings. So you're seeing about in one week 25%. So the other data showed 25% are getting in a month changing their price. We're seeing it in 20 in in one week, not a month.

So four times faster than that. One-third of homes are basically getting uh a price reduction per week. Per week. All right, you guys excited?

Come on. So what do you do? What do you do? What do you do when the market's changing really quickly?

And by the way, this was all very obvious for people understand finance and economics, right? Interest rates go up, asset prices come down, interest rates continue to go up, demand drops because people can no longer afford it. We're in afford it's like an obvious we're in an affordability crisis. You can't have a runup of 52% in just a few years and not have consequences of of that.

It has to it has to balance out at some point. Unfortunately, Florida is a boom bust market. So, we usually see like super super highs. All of us benefited from that unless we're in the business.

And then it comes down a lot as well. What do you do? It's it's really boring and there's no secret. This is the secret.

All right. This is the secret. You get listings. You do lead generation round the listings to get buyers.

Those buyers walk in and you have an offer to make them of why they should work with you after figuring out what their motivation is. It's as simple as that. We got away from fundamentals. Everybody was getting cute and fancy with their business models, making things really complex.

But the traditional realtor who has the most success in every market is the person who gets a listing and then does tons of activity around that listing. You only need one listing to build a big career in real estate sales. One in the right neighborhood, at the right price point, in good condition. You get that sucker.

You have to take advantage of those opportunities and market around it. What do I mean market around it? Are you putting out are you door knockocking 100 doors around the listing? Are you handing out flyers while you're doing it?

Are you calling all the neighbors? Are you doing a mega open house? Are you doing a Facebook live video? Are you doing a YouTube video?

Do everything humanly possible around that open house. Seventh level open houses. We have a bunch of classes on it to draw attention to that listing. And when you get people in that web, you offer them something.

I can get you a free inspection. You can work with my lender. My lender can give you a $2,000 credit. Do you see what I'm saying?

You start putting a little package together for them of why they should work for you. Why? Because buyers are in control now. They have the power.

We used to beg and cut deals with sellers. Because sellers had all the power. Now buyers have all the power. You need to And what would we do as sellers?

We're like, "We're going to do this. We're going to do this. We're going to do this. We're going to do it at a discount.

We're going to have everything done for you because we knew it would sell immediately and you would get a commission check. When you have the buyers who are motivated, you're guaranteed to make money. So, if you have a gu buyer who's extremely motivated, you need to get in control and have a fat pitch to them, a fat offer that's going to make no sense for them to go somewhere else. But, you have to build the net first to catch them.

Are you guys following? The number one mistake agents make is they do nothing when they get a listing. They put a sign in the yard and they put it on MLS and they do nothing. Who's done one of those?

I've done them. I've made that mistake. Every one of you should be raising your hands because I know you all have listings that you did not maximize. You're lying.

I get it. It's embarrassing. You don't want to raise your hand on camera that you you didn't do your job. But this is where the money really is.

You put them in your database. Then what do you do? You follow up with them forever and you have a strategic touch program where you communicate with them every week, every month, every year based on their level of motivation. Who's doing that?

Who has the database that they're following up with their people strategically based on their level of motivation? I ranked every single one of my customers 1 to 10. One being highly motivated, 10 being not very motivated. Based on my rankings, I'd communicate with them daily, weekly or three days, and then weekly and then monthly.

Same for sellers, same for buyers. You build a huge buyer list, you build a huge seller list, and the market doesn't matter because statistically they will start to transact over time. I don't think agents are doing this. I know agents aren't doing this.

Your business would be double, triple, quadruple what it is now if you were doing these basics. Maximize your listings, the people in your web, follow up with them forever. Never give up on them. Connect with them on social media.

Start putting out your own media content so they can follow you and get you as a trusted advisor and start to get your and put yourself out there and attach your name to everything and have an offer for them when they come to you. Why should I use you? They have 12,000 other realtors that they can they can transact through. What's going to connect them to you?

That's going to be a no-brainer for them to be connected with you. That'll open it up to the floor and we'll start having a conversation about this. Thank you guys for listening. Alex, I see you laughing.

Nate, I see you laughing over there. No, I'm just laughing at not really anything in specific, but no matter how hard it is, we just get up every day and do everything you can. That's all you can do. And it's so basic, right, Nate?

There there's nothing. We've been through it. We've been through it. And so now I feel like just get up every day and work your ass off.

I don't know. I work seven days a week, so and I wouldn't have it any other way. I don't know what else I could do. Nate, maybe you don't need this message, but you relate to it.

Oh, absolutely. Awesome. Let's see. Go ahead.

How do we balance with all this data? How do we balance if somebody comes to us and they say, "Hey, I'm thinking about buying. Is it?" And then they're pretty motivated. And I I kind of pre-screen everybody and make sure roughly that they're in a pretty good position.

But how do you kind of balance that between How do you balance that? What's sorry what's the question specifically? So if a how do you balance this data with a buyer coming to you and saying hey I want to buy why are they buying just cuz they want to you have to tell you have to let them know the average payoff period is 5 years just on transaction fees that's my personal opin I I operate differently because I want to gain trust with my people I want them to be lifetime customers of mine that's why me and Britney have been able to generate so many referrals is people trust us it's going to delay our income but the trust is going to be there where we're going to get tons of referrals there are reasons to buy that are not financial. Somebody wants to be in a school district and they don't want to rent for a year and then have their landlord change the rules on them or kick them out or decide to sell and they have to move away from their friends and family that are across the street.

Do you know what I'm saying? There are personal reasons to purchase if they're trying to purchase for a financial reason, which by the way is only about 10 to 15% of buyers. No, this makes no it's actually cheaper to rent. From a financial perspective right now, it makes no sense to purchase a home.

But again, most people do not. I always ask them, "What is your motivation for purchasing?" And it might not be important. Now, time heals everything, right? My thing here is if they're going to stay in it for 2 years, they're like, "I just want to be here for two years." Let's say you have a Navy guy that's like, "I'm going to live here for 2 years.

I'm going to turn around and sell it or rent it." No way. I'd be like, "It's the worst time ever to do something like that." But if it's somebody who's like, "I'm going to be here for the next 20 years and I know that." It doesn't matter. The market will be back at some point in time. And real estate is a good inflation hedge in case we print ourselves to the moon.

Real estate will be will will be a fine hedge against that if we really go into an inflation type of situation. You you don't want to confuse them for sure, but you want to ask them what their motivation is and then understanding the and their time frame and based on their motivation in their time frame and the reason then you kind of figure out what data would be most appropriate for them. But we're in the business of telling the truth and for some people it makes no sense. I just talked out a friend out of buying out of Etown.

He's going to buy a townhouse for 450. And I was like, you you need you wait 6 months, you you can buy this for like 375 twobedroom, two and a half bath for 450. Crazy prices. Crazy.

That stuff should be 200. Makes no sense on paper. He he can rent the same unit for 2,200 that he can that his payment would be $4,000 a month for. Why Why would he do that?

So, it doesn't make any sense. So, I talked him out of it because he he doesn't have an actual motivation to purchase there. His his reason was, "Well, I just want to buy." And I was like, "I'm not going to let my friend lose $75,000 on that. That makes I'm not going to do that." And guess what?

He sent me like three referrals. He's like, "Oh, here's people who actually need to buy for legitimate reasons, not just financial reasons." You gain you gain trust that way. Sure, you're shooting yourself in the foot, but you're playing the long game. And I'm always interested in playing the long game.

If their timeline, it's a pretty good hedge. If they're time, if they're comfortable being there at least seven years, then that that's not really then we're good. We Yeah, I I would say probably seven eight years you break even. Well, they're not dead set.

They're like, I I want to buy a house. I'm going to live here for a while. When the market goes back up, I'll think about selling. But then it's pretty we're pretty safe.

And if and if they can wait until the end of this year to purchase, they're going to get massive discounts, right? If if they can wait until probably November is a great month to purchase, especially when everybody's on holiday, usually over Thanksgiving, uh Thanksgiving to Christmas, because all the sellers are getting so desperate. They're not getting any showings because everybody's on holidays. It's like the great time to be able to purchase and you can get stuff because or or I mean, Brad, the other way is like you you just say, "If if I can get it for a price that makes sense for you, would you purchase?" And there are sellers who are capitulating.

So if you can negotiate 30 $40,000 off, sure, you just reduce the risk a ton. Go ahead, purchase it. I'd be like an expert negotiator, show them the data, be real with them, and then and then buy at the right time of year. But you you can't just go out and just randomly buy.

I think you're going to get in trouble in that case buying at retail prices. I think if you if you negotiate really well for them, understand their needs, understand their time horizon, you can actually act as an adviser to them versus just being transactional. Thank you. You're welcome.

Do whatever you want. It's your business. This is just how I run mine. But we have high expectations for Momentum Realy Agents and we we want to be known as a brand that people take seriously.

A lot of agents don't care to know any of this information, share any of this information, try to help their customer. They're just trying to make a commission check. I get it. Times are tight.

But if you want to grow a really successful business long term, the more honest and transparent you can be with your customer, you're going to get the refer. It's gonna it's going to come back to you 10x. It always has and it always will. Great question.

What else you guys got? Hey John, it's Andrea. Hey, how are you? Hey, I'm good, thanks.

Sorry I'm not somewhere where I can be on video, but uh I had my hand raised. Just wanted to say a couple things if that's okay. Love to. First and foremost, this is my 23rd year in real estate.

And I say that very humbly because 90 I'd say 95 to 98% of you are way better realtors than I ever was or ever will be. But I do want to say a couple things. First of all, and this isn't to fluff anybody up. Are you kidding me right now, John Brooks is dumping this data on us to help us grow our businesses?

Do you know how many realtors pay $1,000 a week to coaches to learn this stuff? And I'm not saying this to pump anybody up. I've been in this business 23 years. John and Britney have done more for me in one year in my business.

I had the best year ever last year in 23 years. Please guys, listen to what you are being taught. This is pure knowledge, pure wisdom. This will help you grow your business.

In the 2008 crash, I had two young teenagers, a single mom, no family. I don't have any family. I had no husband. Uh couldn't pay my bills.

And guess what? The word that you need to tattoo on your forehead, guys, is pivot. I don't know who you got, if any of you guys are friends episodes lovers. Pivot, pivot, pivot.

You have to pivot. And what I did during that time was I have to feed my kids. I don't have anybody else that's going to feed them and put them through school. I had to learn real fast how to do short sales and foreclosures.

And I made more money on I would cry my eyes out being in people's homes realizing that they've lost their home. It. I wear my heart on my sleeve. But I'm telling you guys, if you're listening to what John is throwing down here and teaching us and you make those pivots and you do the basics, it is the basics.

And I'm guilty. I'm not doing the basics. And when I hear it and I'm saying, "How can I say this to others?" Cuz I want, you know, I'm 59 years old. I'm probably going to ride off into the sunset soon.

You're the next level of amazing realtors out there. First of all, because you're amazing. Second of all, because you're with momentum. And third of all, because you have a heart for people and for your customers, and you guys are the next wave of the the leaders in this industry, listen to what you're being told.

Pivot. I'm put all around sticky notes all around your house. Pivot, pivot, pivot. That's all I got to say.

I love every one of you. Thank you for the kind words, Andrea. That's really uh really well put. Pivot.

Let's do it. Um let's do it. Thank you, Red. Do you have another question?

With these with these FHA delinquencies coming and everything, how is there any way that we can we can find these FHA people who are going to be in trouble soon. Um, and how do you go about you don't really want to knock on somebody's door, hey, you're going to have to foreclose? How do you find them? How do you help them in a good way?

It takes time. It's a good question. When the government decides to actually start foreclosing on these, which takes time because they have to be seriously delinquent and then they have to communicate with the borrower that they're starting to foreclose, they'll issue what's called a list pendance. They'll make a formal motion with the with the courthouse and the county saying, "Hey, we're beginning the process of foreclosure on your house." They'll get a notification and they set there will be list pendant sheets.

You can buy list pendants like wholesalers do it, right? They contact people. Every single morning the courthouse comes out with a list of the list pendants and you can research it. It's all public information depending on your county.

You can buy this data. You can go you can buy it from PropStream. That's one of them. And you can contact these people.

Now, would I spend the majority of my time going after that if I was a realtor? No. Because I'm lazy. I'll be honest with you.

I want the easiest deal humanly possible with the easiest rich people I could ever find that won't I know a lot of people try to be like I want to go after I want to do divorce attorneys I want to do probate I want to do this that's like saying I'm going to go I'm going to go pick the hardest thing to do for no reason I go the other way what's the easiest thing that I can do right now is get probably about a $450,000 listing that's in like really mint condition in a A+ area that's like completely upgraded that I mean that like that's that sounds way better. You need to gear your marketing strategy unless you really want to become if like like Andre said if it's like short sales are the only thing that's available short you got to become an expert at short sales. If foreclosure is the only thing that's available you need to start calling asset managers at banks and start building relationships with local community banks and larger banks and see if you can get into their ecosystem. But right now it's still bread and butter.

Things are just normal. We're in a balanced market right now. It's just happening to go right from balance straight into a buyer market. The pendulum is swinging and it's picking up speed.

And the best thing you can do is get a bunch of listings, price them right in really good condition, and make that happen as soon as possible and stack that cash. Cut your expenses so you can expand your runway. Number one thing you can do in business downturn, every business, not just realtors, every business is having issues right now is cutting expenses. It's the number one thing.

Number one thing you can do is cut expenses. Personal and business expenses that don't make a difference. Obviously, if the expense is getting you a positive return on investment, continue it. Maybe double it.

But all that stupid stuff that we're spending money on, I would just I would just get rid of it. And then the second thing is go back to the fundamentals like we're talking about with Nate and Andrea. Just pivot. Go back to those fundamentals of what we were talking about.

Do the activities around the listings. Have an incredible follow-up program with everybody that runs into your net. And have an incredible offer to keep them in your ecosystem. And then connect with them.

Get them to your Facebook private page. Get them to your get them on Instagram. Get them on YouTube. Start f uh start reaching out to everybody.

Organic networking is the way to go. Marketing, you're not going to be able to market your way out of this uh out of a downturn. Marketing works on the upturn when everybody's motivated and you can get your return on investment back really quickly. On the downturn, it doesn't work as well.

Guys, I mean, this is a great the the agents who who survive and thrive through this are going to be the best agents on the next upturn. And there will be a year where the market rebounds 30%. And you will be you'll become a millionaire in that year. I guarantee it if you follow these fundamentals right now.

Hey, I have a question. Hi. Hi. You mentioned about uh the A type of real estate, prime real estate that's in good condition for you to get that listing.

What is the marketing strategy that you would recommend to getting those great deals like the good listing, the good buyer, the buyer, let's say in a better financial situation, how do you gear towards them? That's a great question. There's about 30 different ways that you can lead generate and there's marketing and then there's prospecting and then there's some lead generation levers that's a mix of both and you want to figure out what your personality profile is like mean are you good on the phone or are you good in person in person better than on the phone right it's like and I know you so I know your personality type you would crush at open houses I would try to do open houses in a neighborhood that's in that area that you think is going to great school district the people coming in who are buying there have money. They're in good condition, right?

They're not built in the 1990s, like my house that needs everything updated. They're built like probably you you want stuff that's like six, seven years old. So, you you want something that was probably built in 2018, 2019, 2020, one of those type of neighborhoods, and it's in a price point that like a dual income family can afford. And I would do open houses there because of your personality.

I would also door knock around when you do that open house. I would do because you're personable. I would do Facebook lives showcasing the house, showcasing you, offering with an offer, right? I think a lot of agents miss that they don't have an offer.

Like, you got to have a reason for people to reach out to you. Either you're your content has to be so incredibly valuable that they have to reach out to you and they want to get to know you and be in your world or you need to make a really creative offer to them of why they should work with you and and stick with you. Thank you. Hope that helps.

But I there's um in Thinkic there's a great training and we'll and we'll we'll do over the the basics training as well probably near the end of the year. Right now over the summer attendance for trainings there's like basically zero. Everybody's kids are graduating they're traveling all this other kind of stuff. When school starts in August we usually do an 8week course for free that kind of goes over how to build your business literally from one to zero.

It's a we do it about an hour and a half for for eight weeks uh once a week and it's really effective. I think that'll be really helpful to kind of describe exactly that question. How do I figure out what I should be doing? Um, and we have worksheets and everything like that, too.

I'm creating content, but this is going to be my first listing. I have never had a listing yet. That's why uh I'm asking. So, you would say still the goal is to get the listing.

Even in this market that is a buyer market, it's still the goal should be to get a listing and not a buyer. It's always get a listing in every market. And the reason why is because you can manage a 100 listings. You can't manage a 100 buyers.

And so listings, you can sit back and control the market through your listings. And just just something to say from everything that you've said, everything that you said here, I have lived because I people don't know me here. I'm probably showing up for the first time, but I'm from Brazil and everything that's happening here, I've seen. So it has happened in Brazil many times over the past.

We have been downgraded many times. Our interest rates are through the roof. Affordability crisis, you name it. Everything has already happened over there.

Whatever John is saying, it is true and it will happen. But just on the optimistic side here a little bit, there's always going to be buyers. And he said something very kind of like on the good property property types like a properties in good locations, good properties, they always sell regardless of the market. That's kind of like just a note that I wanted to put down.

You're you're so right. So I was talking with Norian. I don't know if you guys know Norian. She was the number one agent last month in terms of number of sales at Momentum and she sells in J Beach and Neptune Beach.

Well, guess what? Limited supply of inventory, great school system, high demand. Who's buying? Rich people.

They have cash. People who have cash, the market doesn't matter to them. They want what they want and they're just going to pay the price that they want. Money is not as important to them.

Of course, that's like 5% of the marketplace. But if you can find that type of recessionproof market that she has, she's still selling stuff. She's like, "This is a little bubble over here." That's great. Like if you're the agent that m that has a niche in a bubble type of where the recession doesn't impact those people, you're golden.

You're golden. But for the most of us, the best price point is like 400 450. She also happens to live there and been there for 20 years, right? You usually, you know, the I I see a lot of people who want to be I want to be a luxury agent.

The way you become a luxury agent is you live in a luxury neighborhood and everybody around you is a multi-millionaire. So you're by default you are a luxury agent because everybody around you is rich. Um because you're luxury yourself. Yeah, you're luxury yourself.

So I think it was one agent asked me like, "Oh, how do I become a luxury agent?" I said, "Move to Pontavidra, right? Go live in Panava. Everybody there is luxury." And that's just the reality of it. Um but the problem with luxury is that it's it usually they pay you 1.5% commission instead of three.

It's in most cases and and you have to spend more money on marketing. In most cases, it's better to sell the breadand butter 400 to 450 in great condition than it is to sell luxury. They sell faster. They're easier transactions.

There's less marketing. Your profit margins higher. But we can we can have another call on that. This has been an hour call.

It's supposed to be 30 minutes. Thank you for hanging on. I hope this information was valuable. Next week is a by week.

We have tons of moms in here. 70% moms. Momentum. And uh you know, congrats to your kids if you have kids graduating the next week or two.

A lot of people going on vacation. We'll restart in June. So enjoy the week. If you need anything at all, me and Britney are here for you and we'd love to support you.

See you later.