Meet New Zero-Down Mortgage+Why Lumber Prices Are Dropping

Dave:

You’ve probably heard of Zero Down mortgages and thought that they were a thing of the past. Well, they actually might be making a comeback. Do you have any idea how much the price per square foot in the US has grown since the pandemic or what product is being hit hardest by interest rates Staying high in today’s show, we’re covering all this.

Hey everyone, this is Dave Meyer and welcome to On The Market. With me today is the whole panel. We have Henry, James, and Kathy, and the whole crew being here means we have a headlines show for you. This is a show where we pull four headlines from the news cycle to discuss how they impact investors so you can make the most informed investing decisions possible. In today’s episode, we’re talking about no money down mortgages and their comeback may be being problematic. We’ll also talk about the skyrocketing of price per square foot and how that impacts investors and how the lumber industry needs interest rates to go down really badly. Last, we’ll talk about the best places to invest internationally due to price drops. Before we get into our headline show, make sure to hit that follow button on Apple or Spotify to make sure you never miss an episode of On the Market. Let’s get into it.

Alright. The first of our four headlines today reads a shady financial tool from the housing bubble era is making a comeback. The story comes from CNN and basically the point is the zero down mortgage is making a comeback. A company called United Wholesale Mortgage rolled out a new program that allows first time home buyers to secure their purchase with no money down. You finance 97% of the mortgage and borrow 3% as a no interest rate loan. However, upon the sale of the property or refinance, this 3% no interest loan is fully due. How clever of them to come up with this? Now, Kathy, I know that you were a loan officer back in the quote Ninja Days, which stands for no income, no job loans. Did you ever think we would see again a day where zero down mortgages were available?

Kathy:

I actually don’t have a problem with no down payment loans. The problem is, the problem always in real estate is if you can’t make the payment, if you can’t make the payment, no matter how much money you put down, you’re going to be in trouble. And people who put down big payments still lost their homes when that payment adjusted. I mean, we’re seeing it today in commercial real estate. So I actually really support this idea. I think there’s a lot of people who would love to own a home. They don’t have that down payment. Inflation’s been so high, everybody’s going to buying eggs as long as they qualify for the loan and the payment. I think it’s fine. Now, if for some reason values went down, they just need to not sell that property. So if they can’t live there, they have to be able to rent it out. If the rents are about the same as that payment, they should be fine or at least have reserves set aside so that if instead of making that $15,000 down payment, have that in a bank for tough times. So I’m all for this, just don’t overpay would be the key. Don’t be in a market that is already starting to see prices decline, be in a growth market where there’s not enough supply and lots of demand and I think that this will help a lot of people get into their first homes. I’m all for it.

Dave:

Kathy, can you just explain briefly why for this type of loan it is particularly risky to overpay or if prices decline

Kathy:

Or if you’re not planning on living there for a long time. So if you are forced to sell, then you could be in trouble because real estate does fluctuate month to month. I mean if rates went up for some reason, it might be hard to move that property if you had to sell it, if you were in a situation where you lost your job and had to move on or got a different job somewhere else and couldn’t rent it out. So it always comes down to stress. If you have to sell and the timing isn’t great, that’s where you get in trouble. So real estate, unless you’re a professional flipper, it’s hard to time. So make sure you’ve got either plenty of reserves and for me, I’d rather see instead of a down payment, I’d rather see reserves because if people take all their money and put it in a down payment, they’re not in better position. For me, it’s like be able to hold it, put that money in savings and don’t touch it. So if there is a difficult time, you can hold that property and not be forced to sell at the wrong time.

Henry:

Man, I’m glad Kathy, you said that I thought I was going to have to come onto this show and fight y’all over this. I thought for sure y’all were going to be like, this is terrible. Why would they do this for people? Look man, I 100% agree we can’t complain about affordability being a problem and about people not being able to get into homes. And then when someone puts something out that helps people do that, complain about how it could hurt people. Now are some people going to use this loan product and then end up in a bad situation? But there are also people who are going to use regular loan products and end up in a bad situation. Affordability is a problem and some people are going to buy more home than they can afford. They’re going to get in over their heads. That happens with any loan product.

What we need first and foremost, we need the banks to fully vet people and make sure and realistically vet people and make sure that they can afford the home that they’re trying to buy. But we also need education for people so they fully understand what costs and things come with owning a home, not just your mortgage payment. There’s a lot of stories right now of people who bought a home a year or two ago and now the taxes and insurance have gone up so much that they are in a place where they’re struggling to afford their payment. So people need to understand what are these associated costs with a mortgage? How can this go up over time, even if the value of my home goes up over time and can I still afford this home in a year or two years? Right? Your goal should be, you need to stay in this thing long enough for it to make sense for you if you’re going to use a loan product like this. But people who are using these products probably don’t have the education to know that. So we need to have products that help people and education that helps them understand what risks they’re taking on so that they can make educated decisions about the home that they’re trying to purchase.

Dave:

James, do you agree or do you think you live through the crash? Do you think that this is a dangerous loan product to be putting into the market, especially at this time in the market cycle?

James:

I think this article is all hype and it’s grabbing a bunch of different things from 2008 market crash and putting it together. The big issue with 2008 market crash when it just unwound on us wasn’t the zero down. It was the liar loans that you could say you made whatever you wanted on paper and they were going to give you approval on that. And in today’s market they checked your DTIA lot harder and they got to make sure you coverage. It’s not about your equity. Equity comes up and down. There’s plenty of people that went negative equity 2008 to 2011 and they did not get foreclosed and it’s because they can make their payment and it’s more about the monthly payment in your debt to income. But the reason why I just don’t think it matters is because the VA product for veterans, they go zero down all the time.

It’s been a product that’s been available forever and to show the default rate on average, the default rate for a VA loan is zero down is 0.87 in 2021 and it was 1.24% for conventional loans, even though they’re putting down zero down, they’re in default less because they do a good job of checking their income and making sure that they can cover. And so anytime you’re putting less down, there’s more risk. But as long as you can make the payment, it’s not what’s going to cause the product’s not a shady, weird product. The article indicates it really just helps people get into housing and it’s more about can you cover not abusing the numbers, getting a good qualification and everything should be smooth. Yeah,

Dave:

I’m not personally against this in principle, it makes sense to me. I’m more curious if this is actually the type of creative loan that is going to help people in this type of environment because to me, what’s preventing people from getting into homes is not the down payment maybe for some people, but the bigger problem is the monthly payment and by putting less down, your monthly payment is actually going to go up more. I guess you’re not, it’s the same as a 97% because three of it’s no interest, but still you’re going to still have a very high monthly payment. And so I’m just wondering if this is actually going to be effective at all in increasing the home ownership

Henry:

Rate. I mean I agree with you. I think there’s two levers, right? Two problems with the affordability. Yeah, I do think the down payment is an issue for people, especially for people in markets where James and Kathy live, right? Because your down payment is substantially higher when the cost of the home is higher and people like markets I live, it’s a little more affordable to get into the down payment. What they’re concerned about is the monthly payment. So I think you have both, right? I think this product is going to help a lot of people. Again, the concern is can you sustain? So a lot of people don’t know this, but my very first home I ever bought was a condo in Virginia Beach and I bought it in 2000, late 2007, and I knew nothing about buying a home, but I vividly remember thinking this was the easiest process ever.

I just literally just walked into the office of the condos where they were selling it. They had everything set up. They basically told me like, oh yeah, get you approved. And I remember I put down, I think it was like a 1000 or $2,000 earnest money check that I got reimbursed when I got my loan. And then it was a hundred percent loan and the payment was fine and affordable. I ended up having to short sell that house, not because of the a hundred percent loan that I had. I had to short sell the house because the market tanked and they started to sell brand new condos in 2008 for less than what I paid for my brand new one. And so I was just upside down because of the values that went down, not because of the a hundred percent loan, it’s just can you afford staying in that home? And I could afford to stay in that home. So it really wasn’t a big deal. I short sold it. I had to move to Arkansas.

James:

What Henry just talked about, it was a very easy process back then and was, I remember I’ve signed my first documents at Red Robin on the bar top and I was like, oh, cool, I just bought a house. I don’t think my tips were verifiable at the time. Just for

Dave:

The record, James’s work there, he did just choose to close at Red Robin. He wasn’t just

Kathy:

Eating dinner and signing socks

Henry:

On your loan application. Did you have to mention how many pieces of flare you had to wear at Red Robin?

James:

Yeah, I rocked my Letterman coat, but I remember back then it was easy to get a loan. But one of the risky things, and this is why I don’t think the low down is a very risky, it’s what it was in 2008. In 2008, the mortgage professional could pick the appraiser that would go out into these properties. There wasn’t third parties. And so it was like you got this red Robin waiter coming and going, I want to buy a house. And it doesn’t matter what it appraises for because the mortgage professionals instructing the appraiser of where they need to go with the value to get the loan done and then it would just get done. And so there’s so many more things that are now in check for when you’re getting a loan, they check your DTI, it can’t be a liar. Appraisers are done through third party systems. So the mortgage professional can’t manipulate the values and that’s why it’s a lot less risky than it was in 2005, six and seven when it was just kind made up numbers. Anything you can start making up numbers, things can go awry.

Kathy:

And I just want to say you guys, the way I understand this mortgage is that that 3% down payment that you’re getting, I don’t think you have to pay interest on it. Why wouldn’t you not do this instead of putting a down payment, you can go make interest on your money. To me, this is just such a great opportunity and in no way, similar to 2008, I’m so tired of these headlines that just take off and they’re viral, especially when they’re scary and comparing anything else to 2008, this is not the same thing. I was a loan broker then I can tell you there was absolutely no verification of anything. That’s why they were stated income loans. You could be a gardener cutting lawns and say that you’re a landscape artist and make a hundred thousand dollars salary. So today you are full doc. You have to show in every way that you can qualify for this payment. It’s not like they’re just giving out loans to anybody. It’s a very different situation. The person who shouldn’t do it is somebody who’s just planning on being there for a short time and planning on moving because then you will maybe be planning to sell. The only time that might work is if you improve the property and improve the value because selling a home costs between six and 10%. So you’ve got to at least make 10% on the value to cover closing costs if you sell it.

Dave:

That’s a great point. I mean it’s the same thing as a 97% mortgage, which has been around for a while, but you’re actually just not putting down a down payment. So comparatively, if you’re choosing between those two, if the interest rates are the same, this would be a better mortgage. So yeah, it sounds like we all sort of agree here and just like with any loan product, the key is just that you understand it and fully acknowledge what you’re getting yourself into before you commit to any of these kinds of things. We’ve hit our first headline on zero down mortgages, but we have three more after this quick break. Stick with us.

Welcome back to On the Market. Let’s get back into it. Alright, let’s move on to our second headline, which is that a key home price metric has skyrocketed since 2019. And this is actually one metric that we don’t talk about that much on this show. Basically what this says, it’s from HousingWire is that across the 50 largest US metro areas, the price per square foot rose by 53% during the five year period ending in May, 2024. And by comparison, the national median list price for a home jumped 37.5% during the same period to its current level of approximately 442,000. So Henry, let me ask you, do you look at price per square foot when you’re comping homes or considering what houses to buy?

Henry:

Absolutely. We look at price per square foot 100%. Typically when I’m comping a house, I’m looking at two values. I’m looking at what is the sale price at the average and the highest cost per square foot and the lowest. And then we look at what is the sale price based on total sale price in the neighborhood. So if I’m looking for a house that I’m going to potentially flip, I need to understand on the front side what am I going to be able to sell that home for? And I want realistic view of what I’ll be able to sell that home for. And so when I’m analyzing a deal and I’m trying to figure out what’s that sale price going to be, we pull price per square foot and we see what is the average and the highest price per square foot in that neighborhood that we could sell for.

And then we also look at just total sale price because even if I’m at the average price per square foot, my sale price might be one of the highest sale prices in the neighborhood. And then that would let me know that I need to be a little more conservative because I don’t want to list at the highest price in the neighborhood. I don’t want to have to set a record to sell my house in that neighborhood. I want to be conservative when I’m underwriting. So we take both values into consideration, but I’m not surprised that this value is up. If home prices are up in general, your price per square foot’s going to be up, it correlates. But

Dave:

What do you make of the fact, Henry, that it’s going up faster than prices? That essentially just means probably that smaller homes have prices going up proportionately faster than bigger homes.

Henry:

That’s always how it works with price per square foot. So if your home is smaller, then your price per square foot that you could potentially sell for is higher because if your comparable homes in the neighborhood are bigger, you’re going to be priced around a similar size with maybe just a little less. So if you’re selling a house that’s 1200 square feet in a neighborhood full of 2,400 square foot houses, you’re going to be able to sell it for a higher price per square foot because the neighborhood is going to allow for you to do that tracks.

Dave:

Kathy, you invest in a lot of markets where houses are bigger like Dallas and Florida. Are you seeing the same kinds of increases there?

Kathy:

Well, we do both. Our fund in Dallas, we were buying little tiny, actually two beds because it was unique and a lot of people are moving to the area and maybe they’re single and they just have one room and one office. So it just depends. I don’t pay too much attention to price per square foot unless I’m really comparing the same product because again, you can’t compare a condo with a four bedroom house. It’s going to be very different and it’s not going to help you. But if I were looking at condos in the same neighborhood, I would absolutely, or four bedrooms in the same neighborhood, I would look at the price per square foot as a builder. We use that metric for what’s the cost to build per square foot, and then we compare that to the existing homes and the price per square foot that we could eventually sell it for.

And we want to make sure there’s a big difference there of what it’s going to cost us to build versus cost to sell. So that’s super helpful. But again, comping properties, it’s never easy to just take numbers in real estate. These are not gadgets that are all the same that you could just sell. Every house is different, every view is different. Every street is different. So comps are the better way to really gauge the price of your property. And at the end of the day, putting on the market and selling it is how you absolutely know what the value of your property is at that time.

Dave:

That’s great insight. Thank you for clearing that up, Kathy. I appreciate that. And James, do you see this in the same way? Do you rely more on comps, more on price per square foot or do you sort of use some combination of the two

James:

With price per square foot? We use it mostly for new construction when we’re evaluating developing out of site, because typically with new construction, you’re going to get a more baseline evaluation on a property. It’s going to be very similar for new construction when we’re going to sell with the renovations, there’s so much variance in what the finished product is size of a property. And so we use it as a reference point, but we don’t use it as much to evaluate a property. I believe the reason why this article talks about price per square foot has jumped so much is because affordability is in high demand and people want to buy and get into the market and they’re focusing on smaller houses, which is that entry point kind of market that you’re going to get into. And because there’s the most amount of buyers in that median home price in the more affordable, it’s causing that price to shoot up.

And we’re seeing that even with our dadoo houses that we’re building right now where we are buying a property, flipping it, building a very small 800 to 1100 square foot house. Our average price per square foot that we’re selling those for are nearly $800 a square foot. We build those for three 50 and they get this high price per square foot. And so as developers, we like building small properties because the smaller the property, the higher the price per square foot that goes up. And if it costs us $300 a square foot to build, that just creates a bigger margin. And so I think the price per square foot has exploded on the smaller product, but I’ve actually seen in the bigger homes that kind of come backwards a little bit, at least in our market, maybe homes that we’re selling at 500 a foot are now selling at four 50 and it just comes down to that affordability rather than the actual price per square foot.

Dave:

All right. Well, this is definitely something maybe we need to be talking about more on the show. I don’t think we’ve really talked much about price per square foot, but maybe we’ll factor it into future conversations. Let’s move on to our third headline, which comes from fast markets. And this is sort of an interesting one. The headline rates, federal reserve rates, stagnation impacts, wood products markets. And this is again, something we haven’t talked much about, but it’s an interesting article that touches on some of the secondary impacts of high interest rates. We all know we’ve often talked about how that impacts home affordability, but what this article talks about is that because rates are high, we’re seeing construction go down, developers haven’t been building as many homes, haven’t been building as many multifamily markets, and that has actually really softened demand for lumber. And if you remember back during the pandemic, lumber went on the craziest price ride. It was like a game stock stock essentially. It went from 300 bucks per board foot up to almost, I think it was almost like $1,700. And now it’s come all the way back down to pre pandemic pricing. And I think this is an interesting story for people who either flip or who are developers. So James, I’ll ask you, are you noticing a decline in cost in materials and has this helped you improve margins in any way?

James:

It kind of depends on what you’re doing On our new construction, for us developing and building new, we have seen about a 10% decline to 15% decline in building costs. Wow,

Dave:

That’s

James:

A lot. It is. It was a big pullback, which is what we were looking for because it definitely crept up really high. 2021. Now our remodel pricing has not came down at all. It’s actually still kind of creeping up, and it really has nothing to do with material cost. It’s about who you’re hiring, their labor costs and what the demand is. Even though we’ve seen the break of the material costs, it’s also that the labor, because there’s less transactions going on, there isn’t as many projects going on and there’s more remodels than there is new construction, at least in our market. And I think the biggest thing of why we see that variance too is land has got more expensive, debts got more expensive, builders have been more selective about what they’re buying, so they’re buying less product. These companies that were booming in 2021 hired up majorly with their siders, their plumbers staffed up and they got to stay busy to stay in business.

And then it’s also the professional trades. When you’re bidding a project with new construction, your subs are bidding right off your plans. What is the price per square foot? They stick to standardized pricing. And so if they charge five bucks a linear foot for millwork, they can read right off the plans, they’re going to give you the number. Whereas the remodel contractors are still the guys just walking through and going, I think it’s going to be about this much. Right? It’s not an exact plan. You don’t know what’s inside the walls, and there’s a lot more variance. And so they’re bidding things a lot higher. In addition to who’s hiring, these people are just different types of professionals. As a builder, we know what our price per square foot is for drywall, insulation, electrical. We just know what those costs are with flippers and remodelers. They may have less construction experience, which if you don’t know the experience and you don’t know how to battle back on those costs, you just kind of accept what you can accept. And so I think it’s the people hiring the trades, the remodelers are different. How you bid it is different. And then the amount of bodies that are available is different right now too, because it’s much harder to find a remodel contractor than a new construction contractor, at least today in our market.

Dave:

Henry, are you getting any discount on building costs right now, lumber or anything?

Henry:

I’m only working on one new construction project right now, and it’s really my first one, so I don’t have a baseline to be able to tell you if it’s more or less expensive, but I am not seeing discounts on the remodel side. Things seem more expensive on the remodel side. My bids, every project, it seems like the bid is higher or a little bit higher for the same type of work. So I don’t know if that’s more a reflection of my contractor trying to squeeze more money out of me or if the materials are really going up.

Dave:

All right. Kathy, anything to add here?

Kathy:

Yeah. Yeah, this article cracks me up. It’s so funny. The federal reserve rate stagnation impacts the wood products guys. It’s impacting everything. Everybody wants rates to come down. That’s

Dave:

What they want.

Kathy:

I know

Dave:

That’s what they’re trying to do.

Kathy:

And as soon as rates come down, prices will hopefully come down, but then there’ll be a rush of people buying, which then you’ve got supply demand. It’s always about supply demand. So anyway, I thought it was so funny. Yeah, wood companies. So is everybody waiting for this? Everybody’s impacted and we’re all waiting every single month. What’s the Fed going to do? What’s the fed going to do? And as we know, we’ve talked about incessantly on this show, they are going after inflation harder than they’re going after keeping the job market or fueling the job market, I should say, because the job market seems to be doing pretty well. So their focus is on inflation and it’s not where it needs to be yet. So we’re not going to see rates come down quite yet, so people are just going to have to deal with it. The whole point is slowing things down and companies need to have plenty of reserves on hand to get through these times and not overproduce and sit on a bunch of supply, right?

Dave:

Yeah. Would companies get in line, get

Kathy:

In line the rest of us?

Dave:

We do have to take a quick break, but we have one more headline about international investing. What countries have seen the most home price decreases and are they worth investing in? We’ll discuss when we return.

Welcome back to the show. All right, well, let’s move on to our fourth and final headline for the show. It reads three international locations where house prices are plummeting post pandemic. This comes from Yahoo Finance. And the key points here are that unlike in the US where residential prices have kept growing in a lot of international markets, we’re seeing housing prices drop. Germany is one example that has seen multifamily buildings lead a downturn with a 20% drop apartments down 9%, single family homes down 11%. That’s a pretty significant, that’s bordering on what a lot of people would call a crash in Hong Kong. Prices are down 10% and in Luxembourg average, average price of a house is down 14.4% since the last quarter of 2023. So Kathy, I’ll ask you, I know your business, you touch on international investing. Is this something that’s localized to certain countries or is this more of a global phenomenon?

Kathy:

I think the world is a lot like the US in the sense that there’s some markets that are booming and some that aren’t. And it has to do with so many things. What are their interest rates like in those places? Is it like Canada where residential homeowners are dealing with massive price adjustments because their rates went up? They’re not on fixed rate loans and so their payments went up and it’s tough. So I didn’t take the time to study the loans in Germany, Hong Kong or Luxembourg, but I know that there are some European cities that have been on adjustable rate mortgages they don’t do fixed and just like commercial real estate here in the us, those places are terribly affected. It’s just the difference is they’re individuals who are, they have a salary and all of a sudden their home prices go up dramatically. And it’s tough.

I can tell you that my daughter, as you guys know, she got to speak at investor, it was so great. It was her first time she did great, but she sells international real estate and the market she’s in, this is not the story. So Spain, Portugal, prices are going up so quickly, at least in the coastal markets. And Mexico too, I think I might’ve told you I bought through her because I wanted to support her company. We bought a three bedroom house in Tulum for 268,000. It’s gone up a hundred thousand in just a few months. It just depends on the market and what’s going on in those markets and the kind of growth that they’re experiencing and the kind of loan structures that they have.

Dave:

Well, to your point, Kathy, one of our favorite guests and a friend of the show, Logan posted something on Instagram the other day. It was really good. It’s basically a evaluation of risk and it’s all based on what percentage of homes are bought with variable rate mortgages versus fixed rate mortgages. And just for everyone who is unfamiliar with this, the United States is extremely unique in that almost all of our debt is fixed rate. It is very rare in other countries that you would be able to get a 30 year fixed rate mortgage. And so I think Kathy’s dead on in that countries where you are having more adjustable rates are naturally going to be more susceptible to downturns right now because the rates are going up in countries where people can lock in low rates over the last couple of years, there’s going to be less vulnerability. James Henry, would either of you ever consider investing internationally or do you just, you’re just happy in the USA?

James:

I explored Australia really hard and I really want to invest there, but it is tricky. You got to get a golden visa. You got to invest 1.25 million to get yourself in. You’re basically buying that golden visa. I don’t a backyard investor, I don’t mean like crossing state lines, so let alone oceans. I would definitely look at it, but I would be more concerned if I’m looking at anything, I’m going to look at, yes, what the market’s doing, but also what’s the government doing? That’s going to be my biggest concern. How much government control is, what rights do they have? How do they control the banking? We’re lucky in the US to where we believe in capitalism, free trade. We can go around buy, we don’t have to worry about people taking our property. We can get access to debt. If that changes, I mean, it doesn’t matter what’s going on. If the government decides to change a bunch of things around, it can make it very hard. And so if I was going to invest internationally, I’m going to actually focus on government policies over even what’s going on in their economy like Hong Kong. There’s no way I’m buying in Hong Kong. It’s just there’s way too much government control. Even though it could be a thriving economy, I’m still staying clear from it. And so I’d be more about the government and what they’re doing in their policies than I would about the economic conditions.

Dave:

Henry, if you had a dream country you could invest in, where would it be

Henry:

When you asked that question, Dave? I think it’s this new and shiny thing for me, right? To invest in another country. So I think the only way that I would currently think about doing that is if I visited a place that I fell in love with and I’d consider buying something maybe that I could utilize when I want to go there and then have as a short-term rental, but as a plan for overall wealth building and growth and scale. I’m like James, I like investing in my backyard, my furthest property, like an hour away from where I live. And I think I’m selling that one.

But more importantly, I think what makes me a good investor is the knowledge that I have about my local market, the knowledge that I have about what’s coming to my local market, the insider, almost what an insider trader would have knowledge of because I know what’s coming. I know the people in the market. I know what price points make the most sense. I know what bedroom bathroom counts make the most sense in certain neighborhoods. I have this unfair advantage. And for me to have that level of an advantage in another market would take me a long time and a lot of experience to be able to gain, to have that level of confidence. And I like where I live. I like where I invest and I have an advantage. So I just think that that’s where I’ll stay.

Dave:

All right. Well Henry, I hope you just realized you admitted to insider trading on a public podcast, so we’ll make sure no one at the SEC listens to this.

Henry:

That’s totally fine.

Dave:

Well, as someone who lives in another country internationally, this is probably one of the most common questions I get is where in Europe do I invest? And if I do, and I always say the same thing, no, I do not. I actually rent my apartment here in Amsterdam and because for me, I literally get paid to study the US housing market all day. And so why would I spend more time understanding a different housing market when I get paid to study the US housing market? It’s just a lot easier. So that’s not to say that there aren’t opportunities. I know a lot of people who are looking into Mexico and Portugal has become really popular. I would just say go with experienced operators. I think it would be very difficult to just go in and try and set up shop for yourself in any of these places.

And you’re probably better off doing either a fund or a syndication or working with someone who really understands the market. It can be completely different, totally different laws, totally different loan products, totally different tenant situations than the United States. And it will take a lot of work to understand that. Alright, that is our show today. Hope you all enjoyed these four headlines. Henry, Kathy, James, thank you so much for joining us for your insights and for the conversation. Thank you all for listening. If you like the show, please don’t forget to give us a review on Apple or Spotify. We really appreciate it and we’ll see you for another episode on the market very soon. On the Market was created by me, Dave Meyer and Kaylin Bennett. The show is produced by Kaylin Bennett, with editing by Exodus Media. Copywriting is by Calico content, and we want to extend a big thank you to everyone at BiggerPockets for making this show possible.