The US dollar could be ousted as the world’s reserve currency as more and more countries move away from using a dollar-backed standard for trade. This could lead to an economic domino effect causing more inflation and a difficult domestic economy. But what will this do to the housing market? How will investors be affected, and will this global move put downward pressure on the US economy?
Welcome back to another Seeing Greene where your “this is just my opinion” host, David Greene, shares his take on economics, lending, investing, and where to find cash flow in 2023. This time around, David touches on topics like flipping vs. BRRRRing and which makes more sense with high mortgage rates, why using a HELOC to invest in real estate could be risky, what to do when your rental won’t cash flow, and how to turn a troublesome rental into a fully-occupied cash cow.
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Episode #762
Show notes at:
00:00 Intro
01:33 Quick Tip
02:44 BRRRRing vs. Flipping in 2023
08:17 The Destruction of the US Dollar
14:10 The Problem with Using Your HELOC
17:35 Questions from the Comment Section
25:09 How to Get Pre-Approved When Self-Employed
32:57 Selling a Property for MORE Cash Flow
38:18 Real Estate Side Hustles
40:37 No One Will Rent My House!
44:13 Stick Around for More Seeing Greene!…(read more)
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The United States dollar has been the dominant currency in the world for decades, but recent economic and political changes have raised concerns about its future. While the prospect of a declining US dollar is alarming for many Americans, it could have major implications for real estate.
A weaker US dollar means that foreign investors will have less incentive to put their money into American real estate, since the value of their investments will decline with the dollar. This could lead to a decline in the demand for US properties, leading to lower prices and a slower pace of home sales.
On the other hand, a weaker dollar could make American real estate more affordable and attractive to foreign buyers, particularly those from countries where their currencies have remained strong against the US dollar. In some cases, this could lead to increased demand for US properties and higher prices.
Another possible outcome of a weaker dollar is increased inflation, which could make borrowing more expensive and put a damper on real estate sales. Higher interest rates would also make it more difficult for buyers to obtain financing for their purchases, leading to fewer real estate transactions.
In addition, a weaker US dollar could also lead to greater volatility in the stock market, which could have ripple effects on the real estate industry. Uncertainty in the stock market might lead to more investors choosing to put their money into real estate instead, but it could also lead to a decrease in overall spending and economic uncertainty.
Despite these potential challenges, there are also opportunities that could arise if the US dollar continues to weaken. For example, American buyers may find it easier to purchase properties abroad, particularly in countries where their currency is stronger. Weakening real estate markets in other countries could also make American properties more attractive to foreign buyers.
In conclusion, the fate of the US dollar is still uncertain, but it is clear that a weaker dollar could have significant effects on the real estate industry. While there are potential challenges, there are also opportunities for savvy investors to take advantage of market shifts. Time will tell whether the US dollar will continue to reign supreme, or whether it will be toppled from its throne.
On the first question there is another missing point. With only $100 per month cash flow, if the property is expected to have little appreciation then a pending furnace replacement becomes much more terrifying when it could take years to pay that expense off. If it will have low appreciation then regardless of closing costs…SELL.
Having lived in multiple countries with high inflation, this advice is golden. Bravo.
So if our debt defaults you think we will have inflation and not deflation?
Hi,Green.Great topic and trustworthy advice.Keep it going. Thanks
Hi,Green.U just a good cook to prepare your vegetables.Good luck.Tell me how it fared in the future.
You have to season your vegetables to make them taste better. I didn't like vegetables when i was a kid until we started seasoning them
on the heloc note, you can look for a property that needs a little TLC then refi to a traditional loan to pay off the heloc faster. .02
OMG his beard is awesome, BUT it makes me immediately think of the cute little mogwai from Gremlins…any one else?
I have a duplex in Detroit that I ranked out to Section 8. It's excellent compensation for the market.
Hey David! We can't decide if we should turn our first property into a duplex or rent it as a single family home. We bought our first house in Knoxville, TN, two years ago and will soon be searching for our next primary residence, focusing on the PRR method for now. Our first property, which we currently live in, has an unfinished basement where we can add 2 bedrooms, a bathroom, a living room, and even a kitchen. If we converted the home into a duplex, the top unit would be a 3/1, and the bottom unit would be a 2/1. Would it be worth the extra effort to convert the home, or would it serve better as a 5 bed, 2 bath single-family home? Thanks!
Aloha David, Yes on real estate-adjacent jobs! I'm a software engineer in honolulu, which is a flippers market. With prices and interest so high, and inventory so low, even house hacking a slow flip is nearly impossible to do here. I am passionate about everything to do with houses–it would literally be a dream come true to renovate a house–so I'd love to know more about real estate adjacent jobs that an engineer could succeed at and use as a stepping stone into the industry. 🙂
Hi David- Thanks for another Great episode of “Seeing Greene”. As always I love your answers to the BP community questions. I learn a Ton! Please keep them coming! ✌️
As long as we can still issue dollar denominated debt it’ll just mean we can inflate our way out of any issue, but if we have to issue non dollar denominated debt, then we are screwed a bit
Can't wait to watch episode about self directed IRA!!! Thanks for ALL you guys do! Love it all! Pro member❤
VERY much looking forward to episode 770 for the 401k usage information!
Hi David thank you for answering my question. I would be looking into private money to complete my project. My whole rehab was 20 K and I kept it under two months, helps to have a family member that does construction. I was able to get a full new bathroom, all new piping, pluming,flooring, gas lines, new kitchen, with washer dryer in unit . On the credit card I only put about 12 K. The first units is done and I’m screening tenants. Once I’m able To rent out the first unit will cut my mortgage payment, so I will be able to pay my credit card in 3 months. Unfortunately at the time I had not discovered bigger pockets and did not use a bigger pockets Realtor . However I will be using a bigger pockets realtor for my next deal. With that said I Do you have my eye on my next deal. If you have any recommendations , On finding a realtor that is comfortable Using creative financing I’m thinking subject to or seller finance. I have a off the Market property that I would like to acquire. It is my grandma’s house. Located in San Diego, she passed away six years ago and left her estate and a trustee and looking for creative ways to Acquire the property. Is there a realtor that will work with me with creative financing of course paying a commission? By the way since you dislike eating vegetables you should try eating a broccoli every time you have to do An episode to remind you to turn on the light green. I did notice for the last two episodes you have been turning the light green so good job on that. Thank you can’t wait to hear any feedback.
In regarding to the HELOC question, a HELOC interest is calculated daily, where a mortgage is amortized you're paying all the interest upfront with very little going towards the principal. If you use the velocity banking method you can pay down the HELOC balance quickly and then after the balance is paid to zero you can utilize the HELOC to pay off your new mortgage making large principal payments. Rinse and repeat.
Hey David, I’d be really interested on your take on jobs (or even career paths) people can get that are RE adjacent and could help you build knowledge and network while working a steady job.
Hey David. What about a video. Using a 401k loan to use as a down payment on a rental. Your thoughts please thank you
David, they've been trying to dethrone the dollar as the reserve currency since the 1960's, and now it's 2023 and it still hasn't happened. Don't believe the fake news emanating from the CCP and the Kremlin. The USD is the currency of settlement for 84.3% of international trade. The Yuan is used in 4.5% of the trades. Real Estate is your expertise, please stick with that.
David, I love your work. I have a question for your next podcast.
I live in Switzerland and am planning to move to SWFL in a few years. I already have money in the US. I am wondering if:
1 – I should find and buy a deal on cash, try to rehab and manage remotely (relying on professionals, I bought your books) maybe BRRR in the future.
or
2- Down payment and try to get a loan on 3 properties (not sure if possible without living in the US)
I want to get started. Stock markets is too slow =)
Thanks for your time and I wish you all the best!