Value Is Backward Looking Not Forward

·38 min·3 clips

Jason Bible explains how a $100,000-per-door apartment complex bought during COVID panic just appraised at $170,000.

In this solo episode titled 'Value Is Backward Looking Not Forward,' Jason Bible explores the concept that value is recognized after the fact, not in anticipation. He opens by critiquing the common phrase 'provide value,' arguing it's earned through past actions. Bible illustrates this with a personal real estate deal: a small apartment complex purchased for just under $100,000 per door during COVID, which recently appraised at $170,000, highlighting how value accrued over time. He then shifts to current economic conditions, discussing the September CPI report that came in hotter than expected, marking the 28th month of inflation increases. Bible predicts the Federal Reserve will respond with at least a 75-basis-point rate hike, affecting real estate markets. He shares insights from conversations with investors, noting that some are stepping back, creating deal opportunities reminiscent of early COVID. Bible addresses common fears of a real estate crash, citing data that over 90% of mortgages have interest rates at 5% or less, and distressed sales are below 1%. He uses analogies like dating and education to reinforce that value is backward-looking, emphasizing that amateur investors often mistakenly try to predict it. Bible discusses supply chain issues, using Toyota dealerships as an example of inventory shortages driving inflation. He touches on personal anecdotes, like planning a cruise and noticing drink inflation, to make economic concepts relatable. The host analyzes historical data, referencing the FRED database to show real estate prices have generally increased even during recessions, with 2008 as an anomaly. Bible predicts rates will come down after the midterm elections, driven by political and lobbying pressures from real estate associations. He concludes by urging listeners to act now, as serious inflation fighting could push mortgage rates to 12%, and reiterates that real estate is a strong inflation hedge.

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