The Home Builder Problem


From The Desk Of Cody Sperber:

Last week I told you about my conversation with a person who knows things…

He told me the housing market was starting to feel a lot like 2008.

But according to a recent report from the National Association of Realtors, the problems of 2021 are a bit different than those of 2008. 

In 2008 the problem was unregulated private mortgage lending markets. 

For those of you that don’t remember, private mortgages were being chopped up and packaged as securities then sold into all sorts of pension funds and other places normal people and banks kept their money. 

So, when the housing crisis hit, it took the whole global financial market with it. 

That’s NOT what’s happening now. 

What’s happening now is a legitimate housing shortage. 

The latest report from The National Association of Realtors estimates that we are short 5.5 MILLION houses…

When you consider that the entire homebuilding industry only builds 1.5 million homes a year, a 5.5 million home shortage is a big one! 

I mean you can do the back of the envelope math here and see we’re at least a few years away from catching up to the demand. 

We’re going to be in a housing shortage for a while… 

Which is one of the reasons why the median sales price for a home in the U.S. increased by 20% from $310,000 in April 2020 to $372,000 in April 2021! 

The good news is that homebuilders are gearing up to increase production. 

The bad news is that raw materials like lumber are still quite expensive so that is going to put a damper on how much they can up the production of new homes. 

What does this mean for you, the Clever Investor? 

Well deals are gonna be a bit harder to find…  

There simply aren’t enough houses for everyone right now. 

Which means you’re going to need to put in more work upfront. 

That’s the bad news. 

Here’s the good news.

Once you have a deal under contract you won’t be able to keep it. 

Some of our students are selling their houses the DAY they list it. 

Because again, there’s not enough houses. 

Now, what happens when there’s not enough houses and the value of houses starts to fall?

We’ll talk about that next week! 

From The Vault: 

This week we’re opening up the vault to give you my BEST contracts.

That’s right, my Iron Clad Real Estate Investing Contracts!

With these contracts you can control any property without putting down a dime!

I spent BIG $$$$ developing these contracts but you get it free for being a member of my VIP Newsletter.  

Download the contracts here and start controlling properties today! 

* As always, be sure to consult a lawyer before using these contracts in your area as some local laws may change from state to state (even city to city). 

Recommended Reading: 

Today’s recommended reading is “Scaling Up” By Verne Harnish.

Ten years ago, Verne Harnish’s first best-selling book “Mastering the Rockefeller Habits” was released to mass acclaim.  

In “Scaling Up (Rockefeller Habits 2.0)”, Harnish builds on those ideas and gives you practical tools and techniques for building an industry-dominating business. 

In “Scaling Up” Harnish lays out the 3 major barriers to growth every business will encounter, which are: 

  1. Leadership – As businesses grow they will need different types of leadership and leaders must learn to delegate.
  1. Scalable Infrastructure – The physical and organizational systems and structures. 
  1. Market Dynamics – The different competitive pressures the business will face at different levels of growth. 

In order to deal with these challenges, Harnish recommends a 4D Framework of habits and routines:

  1.  Drivers: Drive the implementation of 10 Rockefeller Habits internally.
  1.  Demands: A core challenge of scaling up is to balance the conflicting demands of people as well as the demands of processes. 
  1.  Disciplines: You must build multiple disciplines that support effective execution and increase productivity.
  1.  Decisions: Use the data and experience you gain to make the right decisions.

Scaling up is a great book for anyone who has a business they are looking to grow and is available anywhere books are sold.

More to explore

Is this a housing bubble?

Is This A Housing Bubble?

From The Desk Of Cody Sperber: Ready for another awesome work week? I know I’m raring to go. Over the weekend I

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