Ep 95 – Port Backlogs & Housing Shortages

If you were hoping for good news on the inflation front, today isn’t the day you’re going to get it. The pressures that are exerting themselves on the market are not being alleviated; in fact some of them are getting worse. 

Adam Schroeder explores what’s going on with goods and housing, and how you need to be acting to protect yourself from this situation and future ones as well.


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Transcript:

Adam
Hey, Rent To Retires, it’s Adam Schroeder here with another episode I’m flying solo. But we will have some great episodes coming up for you soon that feature, Zach, the owner and founder of rent to retirement. So let’s get down to it. We have seen the GDP of the United States in the last quarter decline. And so obviously, people are concerned about a recession. But we are also seeing the significant inflation going on in today’s world. So what are we looking at? Are we looking at depression on a recession? Are we looking at Crazy inflation? What is going on out there in the world, we’re also seeing rates pulling back a little bit. You know, it’s, it’s a very interesting time, you know, rates have dropped a little bit, you can lock in pretty decent rates if you want, you know, especially if you pay a point or so remember, tax deductible points.

So let’s look at what’s happening in the supply chain. We talked about this before, we’ll probably continue to talk about it over the near in the in the near future here. But what’s going on, is obviously we’re having trouble getting all the goods that we need to come into the country. So that we can all buy what we want to buy and not compete with each other. And you know, companies aren’t having to fight with the government to get everything. And everything’s back to equilibrium. Like we used to have it. Well guess what? It is getting worse. We may not hear about it, because the large parts that get all the press are starting to clear up a little bit. But at the end of July, the number of ships stuck in queues off of North American ports, were up 66% From early June 66% increase in number of ships that are waiting to get into port. The offshore traffic jam is crushing us.

Absolutely. crushing us. Back in January and February, beginning of the year, North American congestion was the worst that had been. And there were a little bit under 150 container vessels waiting to get in and be offloaded. Two thirds of them. So 100 of them were in the LA Long Beach area. Well, guess what? Now in today’s world, there are 153. So more than that. And the majority of them are off the east and Gulf Coast ports. So they don’t get publicized as much. But it’s now everywhere. It’s more dispersed. So while we thought that port congestion was finally starting to give way, things were gonna go back, we were gonna get more stuff coming in. Well, sorry, things are getting worse and worse. And I don’t really know where it’s going to be solved. I mean, I’m, I’m not 100% sure how long it’s going to take. Because the waiting times in these places are kind of just undetermined.

You know, sometimes it’s short, sometimes it’s longer, they don’t really know. So they’re just sitting there waiting to see when there’ll be told to come on in and unload your stuff. So we better hope that nothing in there is perishable. And, you know, it’s just going to stuff like this, when you don’t have any supply to lose, and your supply gets delayed or lost. It’s not going to end well. So that 9.1% that we saw the last inflation number, it could go up, it could hold steady. It could if it drops, it’s not going to be my by much I can tell you that much. So we are seeing a situation right now where all of the signs are just pointing toward continued, continued continued backlog. And so what does that do? Obviously, we talked about it before, continues the inflation period and what is inflation do? We all know with the hard assets inflation continues to push up the values. And right now when you look at what you need to do to prepare yourself to get yourself ready for your future.


Make sure you are as set as possible. You can’t, you can’t be relying on the stock market. I mean, if anything, if 2000 didn’t teach you, if 2008 didn’t teach you, if today isn’t teaching you, when are you gonna get it through your head, you cannot rely on the stock market. And those savings to last you and get you to where you want to be in your financial future. I mean, think about it, if you retired at the beginning of the year, and suddenly your net worth has dropped 1520 25% in the last seven months, what are you going to do? Well, one thing you’re going to do is try to go back to work, which I don’t know about you but hard pass for me. Or you could have invested in something that’s going to make you cash flow, and grow in price. With the inflation that comes along. That best of both worlds best of all worlds, they’re a cash flowing asset that grows in price with inflation.

And that is where you get your equity that you can then utilize for living for more investments for whatever you want to do. Because when he pulled out your equity, and a 1031 exchange, you can do it tax deferred if you roll it into other investments, or if you do a cash out refinance, tax free money right there. So that is what you need to be looking at as we do this. I mean, you have to look at all of the options available for you out there and decide which one is the best one at this time. And I don’t see how you can look around in today’s environment and say, oh, there’s a better option than real estate. I mean, I would tell you, if I could, I mean, what are you gonna do? Look at Bitcoin. Good luck with that. You’re gonna go back to the stock market and hope for the best. Who knows?

I mean, at some point, that might be a good idea. But right now it’s not, are you going to look for a property that can actually cash flow today can get you money, and still continue to be a play for appreciation. I mean, the stars have aligned, it’s looking up. Yeah, like we’ve talked about before, year one isn’t going to be as pretty just because we’ve had the run up, rents are still trying to adjust. But it’s still a situation where things are lining up, just begging you to take care of them. That is the environment that we’re in, we’re in an environment where you need to find a deal. And act on that deal, whether it’s a turnkey, whether it’s a burr, whether it’s whatever you’re going to do.

But you need to take action in today’s world, because it is not getting better out there. We are still in a place where we are in the mix. We are still seeing these things happening. And we’re waiting for us to come out the other side. But we are not on the other side yet. So position yourself so that when we do come out the other side, you are ready to crush it. You’re ready to absolutely crush it. Okay, so prepare yourself. Because we still have a shortage of housing everywhere. We still have that shortage of housing. And with Home Builders starting to get a little leery. It’s not going to help. It’s not going to help that at all. I mean, we are short. You can look it up anywhere you look, Fannie Mae, Freddie Mac, numerous Housing Studies, were short, at least three and a half to 4 million homes in the United States. Sure, we’ve had a growing number of households, and not enough fast growing builds going on.

So we are short on housing pretty much everywhere in the country. And what does that do? That’s more home appreciation, pressure. I mean, we’re at the point where home prices continue to grow, you get your equity. But also, the people who are renting now continue to rent and your rents increase, but your payments, don’t. We talked about this all the time. You can’t just look at your one. You have to continue to look out over time. And see even if my home doesn’t appreciate if it stays static. And I can get my returns from my cash on cash and continue getting that cash flow will eventually I can sell my property and get my money back that I put in in the first place and still have all my cash flow.


If it appreciates at all, hence it will then I’m going to be in a situation where I’m getting gravy on top of that. And I’ll get my cash flow and the appreciation at that point. And I can choose whether I want to take the capital gains and pay tax, or do a 1031 exchange, it all depends on where you’re looking and what investment you’re looking to do at that time. For example, if you’re doing a 1031 exchange right now, and you want to do one of our new builds in Florida, well, guess what, probably not going to work, you’re gonna look and see, make sure you’re okay, paying that tax on the money that you get. Just so you know, using that money for that probably isn’t going to work. But just look at your options out there. That’s really all that I want you to do right now is look at your options.

And see, does this make sense today, so that I can succeed later in life. So we have a whole lot of people looking for homes, both renting and owning, we have a whole lot of not enough homes across the country, where people are trying to find, you know, the place for them. But it’s still on you to take that first step to go out there and get the property that’s going to work for you. So go out there, look for properties in whatever type of investing you’re you’re doing. We’re obviously doing turnkey, obviously not gonna hide that from you. We’re doing turnkey, it’s the way I invest, it’s the way I like investing, because I don’t want to do all the hard work, I’ll just say I’ll reap the rewards.

But get out there, find a deal, do the deal. Get the benefits, you can find us at rent to retirement.com, that’s rent to retirement.com, you can see all of our inventory, set up a call to talk with the strategists such as myself. And we will help you figure out how you can get from point A to point B, where point B is your financial independence, because that is where we want to help you get that is where we think real estate can get you because it’s been proven to get people there all the time, throughout history. So find that at renttoretirement.com really appreciate you taking the time to join me today. I know this has been a bit of a short show. But I just wanted to let you know when you look at the numbers, not a lot is changing out there. So you cannot delay your strategy. Quit saying I’m gonna wait for this and wait for this and wait for this and realize we are in a situation that is not waiting on you. You can sit around and twiddle your fingers and hope for the best. Or you can acknowledge the situation and take advantage of what the situation is offering you now.

And I want you to take advantage of the situation. Because I want you to be in a better position a year from now than you are today. And not sitting there waiting and saying when is this going to happen? So rent to retirement.com Reach out to us they’re really appreciate you taking the time to listen in today. You can see all of our podcasts and YouTube videos there on the website as well see the properties we have available. Leave us a review on whatever podcast platform you listen to. If you have any questions, email them to me podcast@renttoretirement.com That’s podcast@renttoretirement.com and I’ll talk to you all in the next episode.

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