's up guys. It's graham here so as most of you know since i i've started the channel and really for the last 10 years. I've dedicated majority of my efforts and my money towards investing in real estate with a lot of it documented here in the channel in fact up until recently real estate made up the vast majority of my portfolio and for the longest time. I invested with the assumption that these were going to be properties that i would keep for the rest of my life.

After all they've each been rented out without issues. Several of them have no mortgages and now i have a full time property manager to handle most of the day to day tasks. But now after a lot of consideration. I've made the difficult choice to begin selling off some of that portfolio.

I know this goes completely against the general philosophy of you shouldn't wait to buy real estate. You buy real estate and wait. But in this case circumstances have changed and it's worth explaining so that you could better understand my logic in terms of how and why this makes sense even though i went into all of this with no intention of ever letting anything go and listen all i ask is that you go into this video with an open mind. And if you think i make a convincing argument.

By the end of the video just do me a quick favor and sell that like button for the youtube algorithm by giving it a gentle tap okay no but seriously i think you'll agree with my reasons for selling once you hear this out and for anyone curious about the overall state of the real estate market hopefully. This provides a little bit more context coming from someone who's been full time in real estate since 2008. All right now first of all in terms of what's changed like i mentioned before i've spent the last 10 years doing everything i could to save and build up a portfolio of rental properties that would eventually provide that elusive financial independence. That everyone always glamorizes like i specifically.

Remember being a teenager and reading books like rich dad. Poor dad. The four hour work week and buy it rented profit and then charting out the next 20 years of hypothetical savings and rental income to determine just how much money i would need to make and invest in order to turn that into a reality and sure enough a lot of that came true i wound up working as a real estate agent in 2008 spending. The next three and a half to four years saving everything i could and then purchasing three bank owned properties near the bottom of the market between 2011.

And 2012. My first property was a three bedroom two and a half bathroom home in san bernardino. For 59 500. The second home was located just a few blocks away for seventy two thousand dollars.

And the third was a triplex just a few miles away for a hundred and twenty five thousand dollars and once they were all fixed up and rented they cash flowed about three thousand dollars a month. Which was enough to pay for all of my living expenses at the time this then allowed me to double down and save 100 of my income as a real estate agent until. I was able to save up enough money to buy another home and then a duplex and then another duplex and another duplex after that and within a decade. I had built up a portfolio that was eerily similar to what i had mapped out in a hypothetical situation.

When i was 18 years old all within a short driving distance from where i lived in los angeles. Now obviously since then there have been some changes. We've moved out of california. Which means i can no longer manage everything myself i've taken somewhat the opposite of early retirement by working more hours today than i ever have in the past and right as we entered the covet shutdown phase of 2020.

It hit me that i was stupid for having nearly my entire net worth tied up in only los angeles real estate after getting publicly criticized by kevin o'leary for not diversifying. I'm not gonna lie that was a really big wake up call that even though buying real estate worked really well. While i was in the growth phase. And could put in the work.

Now that i had built up enough to cover my expenses. It was more important to focus on preservation. So that i wouldn't lose what i had built up and so i began to rebalance my portfolio from that point on besides the home. I purchased in las vegas in 2020.

Almost all of my savings went into buying index funds with the goal of one day having just as much money invested in the stock market as i do in real estate. I wanted to build a portfolio that would be as resistant as possible the market fluctuations while still growing in value over time. And today. That's resulted in a portfolio that's now 35 real estate.

35 index funds. 20. In cash. 5.

Cryptocurrency split between bitcoin and ethereum and 5 alternative investments. So no matter. What happens. There's always going to be something to fall back on however in the process of doing that i have to say i have really really enjoyed the mental peace of mind that comes with taking a more passive backseat approach of buying index funds on a regular basis dollar cost averaging into the markets and i'm done.

There was something really calming about not having to take contract or phone. Calls. Answering questions to a property manager. Making.

Sure i reset my home insurance. Every single year and keeping track of all the bills. But even with all of that i still thought to myself for the longest time great. I'll just be able to keep what i have right now and keep buying more index funds that's fine.

But yeah. That's not what wound up happening now initially i had no intention of ever selling anything but earlier in the year one of my rental properties had a mysterious flood. I have my own assumptions about what happened but without going into too. Many details.

The property had to undergo a rather extensive renovation through the insurance company and in the process of fielding about a dozen phone calls a week. I realized now that it's vacant and being fixed up this would be the perfect time to sell not to mention. I never had a mortgage on the property. So i don't get the benefits of leverage or having a mortgage interest tax write off the property is located in california with some of the highest tax rates in the country and as property values increased the rental yields became a smaller and smaller amount relative to some of the other investments.

I was making although i have to say once i started moving forward with the process of selling. I thought why don't i list another one and just see what happens so i did. This was a property that similar to the first one was also paid off located in a state that i no longer lived and i had a few other investments that i could use the money towards so i put it on the market and within days. I had multiple offers over asking and hit open desktop to me this has nothing to do with the fear that real estate prices have peaked.

They're about to crash get out now. While you can but instead taking a very close look at where my money is allocated and handing off the keys to someone else who's able to manage it in ways that i cannot now in terms of the others. Though most likely. I'm going to keep them.

Because i have them all locked in on low interest fixed rate mortgages for the next 30 years. They're all in areas that i believe will continue doing well and they're rented to long term tenants. But in terms of where i'm going to be reinvesting that money along with my overall thoughts on the housing market here's where things get interesting since i've been focusing on a more backseat approach without being tied up in the day to day operations. I've invested with brandon turner in one of his recent funds where him and his team handle everything along with a partnership with ryan pineda.

Where we could cumulatively buy more real estate along with other accredited investors than i could do on my own. Which by the way if you're interested in potentially. Partnering with us. I'll link to some more information down below in the description to see if it might be a good fit separately.

I'm also expanding for the first time ever into a franchise opportunity with houston's hot chicken. Yeah. It sounds random right well long story short a few months ago. We had houston on the podcast.

The iced coffee hour. Where he mentioned his chicken restaurant and how he was about to host a car show at a new location that was about to open of course. I showed up i ate the food and it was so unbelievably good houston also gave us the full behind the scenes tour of his entire operation and when i jokingly said ooh. I want to be able to invest in this he said uh sure go ahead now as of right now we're still working out some of the details.

But fingers crossed in maybe the next few weeks or the next month or two. I could have my own location here in las vegas. We've structured it in such a way where him. And his team can handle all the day to day operations and then i could focus on what i'm good at investing and eating hot chicken sandwiches okay.

No. But for real selling off. These properties. Just frees up a little bit more capital that i could reinvest somewhere else at a higher return with a lot less work on mine.

Although in terms of the overall state of the housing market. Here's what you should be made aware of first of all it's no surprise that higher mortgage rates are going to have a negative impact in the housing market. In fact. It said that a one percentage point increase in.

Mortgage. Rates. Reduces demand by 104. Suggesting.

That policies that target mortgage. Rates are an effective way to influence. The housing market in the short run. Because of that corelogic found that out of the 392 markets.

They looked at 45 of them had a greater than 50 percent chance of seeing a decline over the next 12 months. Which just for reference a month ago. Only 26 markets fell into that category as you're about to see even though some areas show some risk of the decline. The most susceptible areas are the ones.

Which saw the biggest increases including boise idaho. Bend oregon. Fresno california and lake havasu. However just because they deem them as overvalued doesn't necessarily mean they're going to drop and with inventory still remaining your record lows.

Believe it or not prices are still expected to rise by another five percent year over year of course in terms of the good news for home buyers. It does appear as though more inventory is coming in the market as sellers list their homes price cuts are becoming slightly more common with eleven and a half percent seeing a reduction and home buyer demand is down 14 percent year over year. Giving buyers. A little bit more leverage than before on the rental side.

Though prices are actually still increasing and catching up with the cost of everything else like according to redfin median rents rose 15 year over year above 2 000. A month for the first time ever with some states like texas seeing an increase of nearly 50 percent of course since a third of the inflation rate does comprise of what's called the owner's equivalent rent. There is the concern that higher rental rates would contribute to a higher likelihood of seeing a bigger rate hike. Which in turn would decrease housing affordability.

But overall in terms of the big picture. The honest answer here is that most likely we'll see higher inventories. More sellers list their homes buyers are qualifying for less because mortgage rates are going up. And rents will keep getting more expensive.

Yes. Some areas will probably see a decline in value. But others could stay the exact same or even going up. So some words of wisdom for someone who's obsessed with all things real estate.

Here's what i think for home buyers be patient take your time. Don't rush into a deal shop around your mortgage. And only buy something that you intend to keep for at least seven to ten years. This way you're not going to be at the mercy of fluctuating values.

And generally the longer you hold on to a property for the less likely you are to lose money now for home sellers you have to price aggressively if you want to sell your home in a market. That's becoming slightly more competitive. Unfortunately buyers. Only look at the newest properties that are coming on the market.

So if you come in right off the bat overpriced. They'll easily look over it. And then you lose all the momentum thankfully. Though for investors.

Now is the time where you could actually negotiate on a property with the seller who wants to unload as quickly as possible on top of that rental prices tend to remain fairly stable regardless of what happens to housing values that means for buy and hold investors who simply want to rent their property. Long term. This could be a great way to leverage your money and hedge against inflation. In an asset that tends to go up in price over time now sure some markets could see a decline.

But if you focus on cash flow. As long as you have a fixed rate mortgage. This could end up being a pretty good opportunity and finally for renters do your best to shop around. And it never hurts to try to negotiate with your landlord not to increase the rent.

I'll tell you firsthand as a landlord. Myself. I would much rather keep a great tenant and not raise the rent than go through a vacancy and try to find someone new in fact this philosophy has worked so well that out of 10 rental units. I still have some of the original tenants from 10 years ago where i have never increased their rent probably a bad business move.

But i have a lot of peace of mind knowing that they take care of the place really well they always pay on time and when they help me out i'm more than happy to help them back so overall. I hope that explains my thought process for selling off some of the real estate that i honestly thought i'd be keeping forever. The older and busier. I've got the more i began to value the mental clarity of freeing myself up from the day to day things that pull me away from the bigger picture and by diversifying into new ventures.

I'll be able to expand and talk about brand new topics here in the channel that i haven't been able to before so. If you want to be a part of the journey and see what happens with the hot chicken franchise make sure to subscribe and there will be a video coming very soon with all the details so thank you guys so much for watching also feel free to add me on instagram and don't forget to get your free stock down below. In the description. When you sign up for public.

Using the codegram that could be worth all the way up to a thousand dollars. As well as sign up for ftx us. Also down below in the description also with the code gram and you could get all the way up to a hundred dollars worth of free crypto depending on how much you trade so enjoy let me know what you get thank you so much for watching and until next time.