This week, The Norris Group Real Estate Podcast is introducing a new segment featuring owners and leaders from investor clubs, REIAs, and Meetups. They will share insights on current real estate trends, effective strategies in their markets, and updates on upcoming speakers and events.
Our goal is to foster collaboration, exchange best practices, and provide valuable insights into the real estate investment world.
This week’s guests include Christina Suter from Pasadena FIBI, Mitch Craighead from NorCal REIA, and Rich Rice from the FIRE Center.
In this episode:
- Impact of Market Turmoil on Real Estate: How economic fluctuations are shaping today’s real estate market.
- Economic Uncertainty and Its Effect on Investors: Understanding risks and opportunities in an unpredictable economy.
- Expert insights on getting started and navigating market challenges.
- Key Indicators to Watch: Critical trends and data points that signal market shifts.
- Real Estate Outlook for 2025: Predictions on market conditions, interest rates, and investment opportunities.
- Investor Club Information & Contacts: How to connect with top real estate clubs, REIAs, and Meetups.
For more information on this month’s featured clubs and speakers, please see below:
Episode:
Narrator Welcome to The Norris Group real estate podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we’ll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever-changing real estate market. continuing the legacy that Bruce Norris created, sharing valuable knowledge, and empowering you on your real estate journey. Whether you’re a seasoned pro or a newcomer, this is your go-to source for insider tips, market trends and success strategies. Here’s your host, Craig Evans.
Joey Romero Welcome back and thank you for joining us again for The Norris Group Real Estate Podcast in part two of our episode of The Real Estate Investor Roundup Show. Alright, so, let’s shift a little bit here. Let’s talk about some current events.Now, lots of turmoil in the markets right now, the last couple of weeks, to say the least. Dow Jones, NASDAQ, S&P 500 year to date, all three of them are down. Okay, so how do you guys feel that that’s going to impact real estate, or does it have an impact at all? I’ll start with Christina.
Christina Suter Oh, man, I though I was 2nd.
Joey Romero All right. Well, alright, Rich, come on. Jump in.
Christina Suter You go baby, go ahead. You’re right. I shouldn’t be modest.
Joey Romero Go ahead, Christina.
Christina Suter Well, I just okay. So I think that this, if we’re. So, personally, I think the stock market has been the thing that, to me, is much more hyper in place inflated than the real estate market, in my mind, right? So, there’s been such low volume in the real estate market that it’s hard to get a lot of movement on price point when we really don’t have supply and demand. Is not a numbers game, it’s a balance game. We don’t have enough supply for the amount of buyers. It doesn’t matter if that’s 10 buyers or 100 buyers, it really is that amount. So, the whole volume being low means that real estate’s actually been more stable than maybe it deserved to be, but it’s served all of us. I mean, even single families have continued to go up by 11% in the last couple of years. Multifamily was the asset class that was hit the most in this particular interest rate rising. So, I’m kind of not surprised that we’re starting to see destabilization in a major asset class in the economy, and that the one that can be hit the quickest is the stocks. I also think, like I said, it was hyper inflated. How’s that kind of feed down through real estate? Well, the usual answer depends, right? It depends. It depends upon how steep it goes. It depends upon how concerned it is. I mean, this the concern right now that seems to have created. It is really more having to do with the tariffs and the feeling of weakening in consumer confidence and the weakening in spending, you know, and really the sort of economic uncertainty in general, of what is the current administration going to do? I think the current administration is very and I’ll call it showy, in trying to create changes in the economy. And a lot of people are finally like, ‘Yeah, we don’t know what he’s doing.’ We don’t know if what he’s doing is inflationary or or de inflationary. We’re not sure where he’s really going to land with the cut, with the amount of layoffs that he’s done, every economic panel I go to, every time I go to a real estate meeting, it’s been, ‘Well, what does this mean if he does tariffs? What does that mean? Well, it’s increased, increased cost and construction. ‘ Well, if he’s going to be do deportation, what does that mean? It means increased cost in construction. What does it mean for housing? It means that we’re going to have a lot less housing being developed. What does that mean to housing? Does it mean that it’s going to fall off the cliff? No, usually, actually, it means it’s going to stabilize it more because we already have a lack of volume. We already have a lack of units. So, even though we’re going to see the stock market have its own reaction, which is going to create, potentially a recession, based upon how long it goes on, for real estate might continue to stay cushioned due to its lack of volume, due to its lack of capacity to replace itself, and the existing shortage we already have. But it doesn’t mean it’s not going to affect your renters.
Joey Romero There you go.
Christina Suter Right? Longer it goes on, the longer it cascades through, and the more layoffs we have because of the destabilization in the stock market. But it takes months for that to rotate through till it hits your renters and then hits your multi family, which has already been struggling. Multi family has already been having a hard time. It’s already went down 20% last year, and they’re saying that it’s going to go down potentially another 20% this year, because we’re not seeing a decrease in the Fed rate, right? They’re not promising to do multiple decreases. So, I’m trying to keep it short. I’m trying to shove a lot of stuff into a very small amount of time. But I think watching that what does to your renters is what’s going to be really important, because the asset itself is kind of buffered.
Joey Romero Mitch, do you have anything to add there?
Mitch Craighead Yeah, I have something to add. And I’ve been accused too many times of oversimplifying things, and I’m going to continue to do that.
Joey Romero Here’s something to dance and keep it at a third grade level that way. That’s what I understand.
Christina Suter I think I over, I think I over. I think I make things overly comfortable. So go for it.
Mitch Craighead I love it. I love it. And we could chat all day long about the little nuances and speculate. And I absolutely love hearing you know your perspective there, and I agree with almost everything you said there. It’s like, really, really great stuff. I’ll say that I enjoyed this idea. I enjoyed the idea that with the stock market doing what it’s done, the real estate market sounds, looks ,and feels like the stable investment to for investors, for people with cash, and when people are deciding where they want to put their cash, then putting it into our industry instead of what the stock market that is highly likely going to be highly volatile for the next few years. I like that idea. I like that idea, and I think it’s going to I think it’s going to serve us, our our members and our fellow investors, a lot of our friends, very, very well.
Joey Romero Rich, you got your wish. You got to go third.
Richard Rice No, all great points. I just wanted to add, you know, we, I just, I spoke last week at my club and kind of touched on this a little bit, you know, we, we have, you know, a lot of people are calling him like a wild card in office, like Christina was alluding to, we don’t really know what, how some of this stuff’s gonna shake down and shake out.
Joey Romero Is he crazy or crazy like a fox, right?
Richard Rice Yeah. It’s like we could speculate it all to death, and maybe one of us will pick the right answer. Who knows? You know, but I just tell people, you know, people are asking their concerns, should I jump in? Should I not jump in? I just don’t look ,my Buy Box hasn’t changed. You know, I’m still looking for, you know, rentals that I could make cash flow or turn into ADUs. You know, I am still flipping mobile homes. I’m still flipping regular homes. What I’m telling people not to do right now is I would not go jumping into, if it’s your first flip, I would not go jumping into a billion dollar flip with, you know, $150,000 spread on it, or something like that. I wouldn’t go jumping into anything skinny if you’re brand new, you know, I wouldn’t this now’s the time, not, not the time to get into, like, a brand new Airbnb, if that’s what you’ve been thinking about doing, you know, you know, be careful. But if it’s a good deal, jump on it. You know, that’s what I’m doing.
Joey Romero And that’s a great point. You know, economies change, the mood changes. You know, Bruce, I was talking about the moodometer, right? But fundamentals don’t right. Stick to what you know what you do well. And if you’ve done something, your Buy Box is your buy box for a reason, going outside of what you’re good at, that’s where people can get in trouble, right?
Christina Suter So, if I’m if I may.
Joey Romero Yeah. Jump right back in.
Christina Suter I think again. I try not have a political conversation what I’m trying to have is an economic conversation, because that is the thing in which my asset class exists in is a larger economy. And so I think that our current administration is looking to intentionally create inflationary and deflationary activities at the same time. And I think moving forward, people ask me about what am I going to do moving forward? I kind of agree with Rich, which is, right now, it’s not so much that I do or don’t believe the intention of the current administration. I believe they’re actually trying to create a balanced reset. I believe that’s what they’re trying to do, whether they do or don’t, whether it’s successful or not is a completely different conversation, and that’s what I’m waiting for. The truth is in the pudding, and that’s what we’re going to see in the next because basically the administration, every administration, has about two years to get stuff done in right? Because then mid year elections can, drastically shift the House and the Senate and their capacity to implement quickly, right? So, in this next two years, I don’t know if they’re going to hit the balance point they’re looking for.
Joey Romero So, okay, so it’s not stock market, or maybe it is stock what other indicators do you look at? You know, is it? Is it jobs? Is it, you know, pricing. What is that? Mitch, what other indicators do you look at?
Mitch Craighead Yeah, definitely. Definitely pricing. I mean, what? Gosh, when we think about our renters, we talk about the people in our homes, the people that are planning to buy our rehabbed homes. It’s all about affordability. Everything comes back to affordability today and people are stretched. So yes, looking at CPI and what people are spending, where prices are going, is one of the, is the one of the big things that, you know, we hope, stays in some type of control. Because, over the past 18 months or so. I bet we’d all agree that it’s, it’s felt like a kind of a spiral that’s been, it’s been challenging us all in the in the people that are either buying our properties or renting our properties.
Joey Romero Rich, what other indicators are you looking at? Yeah, we just, we just, you know, put out last week, or was it a couple weeks ago? Debt is up ever except for in real estate, you know, real estate, it’s ticked up a little bit, but if you look at it, compared to credit card and cars, like, it’s nowhere near the levels of those types of debts.
Richard Rice I like to listen to a lot of people’s different opinions on things and try and figure out, you know, kind of like a, about anything, whether it’s, whether it’s economics, real estate, you know, history, whatever, and try and figure out what’s what I think is going to happen from my point of view. I don’t, I definitely don’t, like, pour over economic forecast numbers or anything like that, unless it’s something that like I really so the other day, this video is kind of going around the real estate circles about some FHA, about the FHA, the government paying people’s mortgages for them and letting them do these massive reductions, and kind of creating this bubble of things that should have gone under foreclosure, but now they haven’t, because they’ve been making these, these mortgage adjustments, and we’re supposed to be for COVID. But now it’s kind of, you know, gone a lot longer than that, you know. And so the video was making some claims that weren’t really lining up with the article that it was, well, I that it was referencing. So, I started diving into the like, the FHA data, and just kind of looking at it a little bit, I found out that, you know, yes, you know, overall delinquencies are up, like, a little bit, like maybe a one and a half percent from where they normally are historically, you know, going back to last five or 10 years. Are they elevated? Yes, is it something that’s going to, you know, crash the housing market? I don’t think so. Yeah, yep. So, you know, I operate in a very small market. I keep an eye on that market. I keep an eye on the rentals, I keep an eye on resales. Like, I’m very, you know, compartmentalized in where I invest. So, like I said, I have a great, tight Buy Box, unless I start seeing massive shifts there, you know, I’m kind of seeing things happen because it is a smaller market, tertiary market. I’m seeing those shifts probably faster than some other people are seeing, you know. So I’m already making adjustments there. I’ve already dropped my rents a little bit to get, you know, a wider pool of renters, you know, and trying to get those best people in there, you know. So, that’s what I look at. Christina, what are the indicators are you looking at? I know you’re a big data geek.
Christina Suter I would say all of them, but there’s way too many to say all of them. I run out of time, so I really look at GDP, growth, consumer confidence.
Joey Romero How about that outlook for this first quarter?
Christina Suter I wouldn’t… what in particular you speaking about the fact that the GBP has gone down? And then…
Joey Romero Did you see what the projection from the Atlanta Federal Reserve?
Christina Suter I did not. Joey, you got me on that one….
Joey Romero The projection, the projection for first quarter is a -2.9.
Christina Suter Ah, okay. Because first quarter, what I saw was the estimated contraction of 2.4% of the first quarter. That’s what I’m seeing. It’s actually right, which was concerns about a potential recession, which is part of why the stock market responded. But that the actual fourth quarter of GDP was, you know, 2.3% following the expansion they had of the 3.1% of the third quarter of last year. So, I really think it. I think they’re over. In my opinion, they’re over projecting the effects of tariffs. I think they’re over projecting the effects of the deportation. In my opinion, I don’t think that that’s really going to slow it down that much, but the stock market responding the way that it has, could slow it down that much. So, the fact that the Atlanta has put that out now can actually create a cascade that would potentially be a recessionary quarter and actually have negative GDP growth.
Joey Romero That’s why the, that’s why the Fed always hesitates to say anything, right? Because everybody’s like, what lever are we going to pull?
Christina Suter Well, and they’ve been pulling level levers, there’s no question that they’re pulling levers. I mean, they’re not going to be pulling like we said, they’re not going to be decreasing the rate, but they are also decreasing their they’ll be purchasing a bonds, so they’re doing the reverse of the quantitative easing right now. And that’s on their projection list of what they’re going to be doing, and that will start to create a slowing of pulling money off the market, which creates a slowing of cash movement, which can create a recessionary movement in money, especially compounded with the other things that the President is talking about doing, or is doing, with the tariffs being kicked into place already, and, you know, imports being more expensive, and therefore the cost of living going up, being more expensive. So, that is going to create that difficulty. As far as real estate, I still think that single family is going to be relatively well cushioned. And I’m doubling down on multifamily right now. I’m buying in Indianapolis and Tulsa. I’m out buying multi family because I think that is what is going to be hit by having the interest rates not go down. They’re already destabilized because interest rates went up. They’ve been getting temporary spending and doing capital calls in order to expand the note actually being called on them, and therefore having to face a forced sale. I think they’re going to be running out of time on that, but I’m not seeing very much of it in Indianapolis or in Tulsa. So, it hasn’t we haven’t gotten enough tired sellers yet that I’m seeing people accepting offers easily and gracefully that would fit with the current cap rates, or the cap rates actually expanding in order to fit with the current interest rates. But what I’m purchasing into is looking at the one area of real estate that has been affected that I want to own is multi family. So, that’s what I’ve been doing on that level. So, what am I looking at? I’m looking at CPI. I’m looking at GDP. I’m looking at unemployment. And we’re looking at the I’m looking at pending sales, volume of sales. And then, of course, you do look like, look at price point for real estate, whether it’s single family or multi family, based on what you’re looking for. And those all start to create a story, right? And I do look at the, look at the S&P 500 and the growth in that. And I do look at the stock market, but that isn’t my primary asset class I invest in, but it is something that I am invested in. So, I do track it, and I use Fed the, you know, St Louis Federal Reserve. I use their charts all the time to give me a feeling for what it is that’s happening with that city, because I’m investing, you know, two different cities outside of California.
Joey Romero As we start to wrap up, I want to get you guys outlook for the first half of this year. And we’re going to be in 2025, overall, in the real estate investing space. Rich I’ll go to you.
Richard Rice Especially in my market, you know, I’m in the mountains, San Marino mountains. I’m in a tertiary market. I’m already seeing, you know, a shift there. I think that shifts going to continue and maybe pick up here a little bit. That’s why I’m trying to exit some flips. I’m in right now up there, as soon as possible. I’m preemptively looking, you know, lowering my, my rental rates on the stuff that I have vacant at the moment, just to try and get a, you know, best renter I can get in there, regardless of price, hopefully for the long haul, I think overall, I mean, we’re going to, there’s going to be a lot of shakeups across, I think, multiple markets across the country. But here in California, in the markets that you know, especially here in Southern California, is really a lot of what I what I look at, you know, we’re still, we still have a massive supply issue, which, you know, we were touching on earlier. And, you know, there’s still things are priced right? Are still flying off the shelf. It’s the people that kind of, you know, are putting it up for these ridiculous numbers that are just kind of sitting and seeing these price drops. You know, Orange County is still looking, you know, insanely strong. You know, parts of San Diego, even parts of Inland Empire. I know LA is kind of down a little bit, but even when I look at things are down a little bit like our, you know, they were already pretty, kind of inflated. So, you know, maybe we’re just kind of leveling out here. I don’t know if I really have a great guess, other than, like I said earlier that I’m just, I’m anticipating that we’re just going to kind of go sideways, like Bruce has been talking about for years now. And we might bump up, bump down, bump up, dump down, but we’re going to be pretty you know. And I’m just making decisions based on that. I’m staying in the buy box and just making sure I’m not, you know, getting crazy or you’re going, you know, off doing something that I don’t know where it is, you know, so.
Joey Romero Christina, what’s your outlook for 2025 in the first half?
Christina Suter So, I feel like single family, like I said before, he was cushioned by the lack of inventory and lack of volume, right? So there’s just not enough housing to house the people we want to have. But at the same time, I’m seeing affordability, because I I’ve been listening to Bruce, and I see the affordability index in parts of LA are hitting below 20, the 20, and that means that we’re going to potentially 20% which means we potentially might hit a destabilization. Even in the inventory we do have, um, 60% of mortgage rates are below 4% but we still have 40% of those potential potential houses on market, and I think, like I said, in multifamily, it’s going to continue to get hit this year, especially since we’re looking at the Fed keeping interest rates up and the capacity to get that sort of intro financing, I think is going to become harder during 2025 and we already know that office has been having a hard time recovering, and then hospitality seems to be relatively more fully recovered by having to do with people being back, at back at it after COVID. But if we’re going to have a decrease in the stock market, we’re also going to have a decrease in luxury activity, so we will see whether what happens to hospitality coming in the middle of this year, because they really rely on that sort of summer season. And then, I’m not a real industrial or retail expert, but I think industrial will still keep saying strong, because as they bring AI online, what they actually need is more space, and they actually will be creating more jobs as AI comes online. So, industrial potential will continue to have a strong demand, having to do with the fact that we’re still living with this high level of delivery, and we still need space for our greater areas of servers being able to have more and more AI. So, it’s kind of across different industries, but really, I’m much more of an expert in single family, multi family. That’s really my area.
Joey Romero You know, I’m seeing that a lot in my area, too. Here in the Inland Empire, it’s that that, what they call it the final mile. You know, I get warehouses in really residential areas now, that’s in the valley that I live in. Last question that I have for all of you is, I’m a brand new investor, and this is my first day at your club. What advice would you give me? I haven’t invested yet. So, I’m looking to get in brand new, as new as you can get.
Christina Suter I say, ‘Talk to rich about his Buy Box.’ That’s right. Have a really clear Buy Box, right? The first thing you want items, if I always tell people, the first six months of being new to investing, you want to take every you want to go to every meeting, you can take classes, not the expensive ones, right? I won’t mention some of the expensive ones. I specifically saw people do not take these classes because they’re way too expensive. They will take all your down payment in your class cost. So, don’t do that, but take a whole bunch of inexpensive classes, like built in class, or go to the exchanges out, you know, in the Riverside, go to places where you feel like you’re going to get educated. Or NorCal REIA, go to places where you feel like you’re going to get educated. And just spend 20 bucks going to meetings, 20 bucks, 20 bucks, 20 bucks, 20 bucks, and get yourself involved in a community that you know you can trust people who are willing to steward you towards having a network where you’re going to be successful and whatever you’re going to choose, whatever you end up landing, and you’re going to need a mentor. You’re going to need people who can bring you cash. You’re going to need inventory. So, your network is how you survive. It is how you’re going to be able to build. Can you build your education at the same time. So, spend six months building your education and building your network, and then find a real clean Buy Box and talk to Rich about your Buy Box, because he keeps doubling back to that discipline, because it is just a discipline to know your Buy Box and stay in your Buy Box, because your Buy Box is both what’s happening in the market and what you bring to the market, that is your Buy Box. That’s what gets merged to create a successful buy box for you.
Joey Romero Awesome. Rich, alright, brand new, first time at at the FIRE Center. What are you going to give me advice on?
Richard Rice Yeah, I really, Joey, I would tell you to, you know, number one, stop being a secret agent. You know, you got to, from now on, you are a real estate investor, okay, when people ask you, what you do, you know, you don’t, you’re not a sales guy or, you know, whatever, or a mechanic. Today, you are a real estate investor, and you want to start looking for problems. We are problem solvers, so you want to start looking for people with problems. We’re not looking for people that are just, you know, need to sell their house because they want to, you know, we’re looking for people that have some kind of problem that we can help solve. Okay, so, and I give them, you know, examples of what that would be. And then start talking, talk to your neighbors, talk to your, you know, your colleagues, talk to whoever, like everybody. You meet your real estate investor. Do you know anybody that’s got a house problem that I could help them solve? And then, when somebody says yes, then you come back here and you find somebody to help you out. That’s basically how this all works. We do a group coaching model, you know, where it’s we’re all just trying to do this stuff together. So, it’s hard to, you know, tell you this whole thing from A to Z right up front, but if you go find me that, yes, I’ll take you the rest of the way.
Joey Romero It reminds me of, you know, a lot of stuff reminds me of things that Aaron or Bruce would say, but one of the things that Bruce always talks about is, us as investors we’re in the starting over industry. We give people fresh starts. We don’t know who we’re going to help by buying that house given getting that cash and starting the next part of their life. So don’t be afraid to ask. You know, that’s the one thing that Bruce always did, you know, like he was just successful because he was willing to take more no’s than anybody else. So, get out there, get active and go, change people’s lives by in this great industry that we’re all in. Alright, guys, I’m going to give you guys an opportunity talk about your club for how can they find your club? When can they attend? And how did they go about that. So Rich, I’ll start with you.
Richard Rice Yeah, sure. You can check out the FIRE Center at firecenterhq.com. Like I said earlier, we do 15 meetings a month. The primary ones, we do Wednesdays from two to four. That’s our SoCal Exchangors meeting. And then we do our education focused with the speaker. You know more on stage on Wednesday nights, starting at six o’clock, so two to four on Wednesday. Just plan on being here Wednesdays two to about nine o’clock at night every Wednesday will change your life.
Joey Romero Mitch, how can people find NorCal REIA?
Mitch Craighead Alright, NorCal REIA, norcalreia.com. There’s there’ll be a link in there to our Skool Channel, which is our private online community. And you can actually sign up for either a month to month or an annual membership there. We also offer a seven day free trial. So, if you see a speaker that you’d like to see, go ahead and wait to just before that speaker speaks and get your seven day free trial and see if the club is going to be a great fit for you. But best places to find us, we do zoom meetings about 75% of the time of in person events and many conferences sprinkled throughout the year.
Joey Romero When are your meetings?
Mitch Craighead They are on second Tuesdays. Sorry, second Wednesday of every month.
Joey Romero All right, Christina, how can folks find you?
Christina Suter So, we’re still on meetup.com we’re doing it the old fashioned way. So we’re still on meetup.com that’s where you can find us, and you’ll find a PayPal link in there to be able to pay for us. You can get discounted ticket if you buy it before you actually show up at our front desk. And it’s FIBI Pasadena or ITI Education and Networking, those are our clubs. And between those, that’s four different meetings you can go to a month. So, FIBI Pasadena is the third Thursday. ITI, Glendale is the first Wednesday. City of Industry is the second Thursday, and El Monte is, which is all networking is the last Thursday of the last Wednesday of the month. So, you can find all those on meetup.com.
Joey Romero Guys, thank you so much for jumping on the first real estate investor meetup Roundup, whatever we’re going to call it. I really appreciate you guys jumping in and guys so throughout the rest of the year, once a month we’re going to do this. It’s not always going to be the same, folks. I hope that, you know, maybe a couple times a year you guys will be willing to jump back on with different different people. So, that would be really cool to have you guys on a different time. Especially, please don’t hesitate to reach out when you guys have something maybe a little special coming up, you know, you guys need a little help pushing that along and or just getting getting the word out, you know, good time to jump back in. I really want this to be a highlight of what is out there, that there is a home for, really, anybody who wants to get started, and anybody who feels like they’re just out there doing it on their own, there’s a whole community out there waiting to support you, waiting to help you and what, waiting to help you be successful. So, thank you so much, guys. We’ll have this out this Friday. Might be a two parter, since we did go a whole hour, and it might not always be on on the regular Norris Group slot. We might just release it separate, because I think this could be a really cool place where we could build some synergies. And who knows, we might even, I have an idea of even having a summit once a year where we could have you guys actually come out and teach a specific strategy, and we make a whole day out of it, so that would be really cool. Thank you so much for joining us. Good seeing you all.
Christina Suter You know we’re here for you, Joey whenever you need it.
Richard Rice Thanks, Joey.
Joey Romero Thank you
Narrator For more information on hard money loans, trust deed investing, and upcoming events with The Norris group. Check out thenorrisgroup.com. For more information on passive investing through the DBL Capital Real Estate Investment Fund, please visit dblapital.com.
Joey Romero The Norris Group originates and services loans in California and Florida under California DRE license 01219911. Florida mortgage lender license 1577 and NMLS license 1623669. For more information on hard money lending go to thenorrisgroup.com and click the hard money tab.
