A Video Update with Daniel Rosen EP:2 Clickinvest's Rosario Terracciano

All right, going live with the one and only Rosario from Click Invest. Let me just start by saying thrilled to be on here with Rosario. Known Rosario for about 15, maybe more years. I wanted to focus in on rehabbers and flippers and what's going on in the for-sale market. Let me start with some gratitude. This guy and I would spend at least one time a month going through our business plans together, sitting outside a coffee shop, and for 15 years have supported each other and helped a lot of investors. I love working with Rosario because it's all about providing and giving to his clients. He continues to do it and was nice enough to come out here and share what Click Invest is working on today and what they're seeing in today's market. So that's a quick intro, and then we can jump in. Thank you very much.

Mr. Rosen, COVID-19 has been much better to you than me. You look good. I can't even get a haircut and my wife refuses to shave my head, so I've got this thing going. But yeah, I feel the same way. I can't believe it's been 15 years, man. You guys make me think we started when we were 15 because we look so young, but now we've been older for a while. Another wild ride we went through together. Yes sir. So Click Invest, the short story or the 30-second brief on who we are: my partner Jeff and I have both been in the industry for almost 20 years. We cut our teeth on the institutional side of the business, meaning we worked with the big hedge funds when they were buying a few years ago. Between him and I, we've done over 7,000 transactions, and we built Click Invest as a way to really offer the local mom-and-pop investor the tools and the deals they need to be efficient in this marketplace, especially as technology continues to come on the playing field and make things harder for the mom-and-pop to find deals. So we find deals, we also bring construction into the mix, so we have GCs that can manage the project for our clients, and then we help them on the resale of the properties as well. But a real deal platform, that's the easiest way to sell myself.

Awesome. One of the things I've always been impressed with, and I watched you do it in our own office for a long time, is you've really focused heavily on data and a platform using technology. We talked earlier this week, which got me excited to bring this conversation to other people. So I wrote down a couple of notes so I don't forget. There are three or four questions I know you actually took some time to put something together to go through. They basically were: what is Click Invest focused on right now? How do you use data and what data do you look at on a regular basis? For the foreseeable future, say the next three to four months, what is the data you're looking at telling you about that time period? And if you were an investor, what data would you look at on a weekly or monthly basis to help steer you and give you the confidence or the information you need to navigate as an investor?

Great question. So my partner Jeff, he's a financial modeling wizard. On a weekly basis, he goes through a ton of data and puts together reports for our clients, and then I share that data with our client base. We took a stance that when all this started to shake out, as the scariest things were getting real and still are, the stance we decided to take was we're going to focus more on data than emotions. Because everybody's an economist it seems like today. You go on Facebook and everybody's got their ideas what's going to happen, exactly how it's going to play out. So we kind of stayed silent for the first few weeks. We were emailing our client base, but we weren't really coming out saying this is what we think and here's what's going to happen. By just waiting a few weeks, enough data started to present itself for us to really start making some intelligent observations and share that with our client base. So just be very careful what you're putting before your eyes, because you want to focus on data. At the end of the day, that's all that's going to matter. Emotions are going to continue to be all over the place, and this coming from an emotional guy. I'm emotional, you guys see Rocky behind me. That's all that matters. So I'm going to start with this because it will prepare your mind for what we're going to be diving into. Ignorant optimist, panicking pessimist, and the opportunistic realist. These are the three types of people that I feel at least in the real estate space, and quite frankly this may be the same for the whole world, not just real estate. Depending on the day and what you woke up and did, you can be any one of these. I used to be an ignorant optimist. If you guys have kids and you've seen the Lego movie, everything is awesome, right? Everything is awesome all the time. Now I'm a big believer in affirmations and being positive, but the ignorant optimist gets himself into trouble because he's not paying attention to the edge of the cliff and then he just goes right off. Then there's the panicking pessimist. These are people that are always frozen and paralyzed and never do anything, and every day is the end of the world. You just have to be very aware of who those people are and don't surround yourself with them, because you'll get pretty depressed and they'll never work themselves out of any situation because they're overanalyzing everything. Then there's the realist. I couldn't fit opportunistic in there, but it's the opportunistic realist, and that's what I've become through the years. Being opportunistic with reality, what's in front of me, and where are the opportunities with what's in front of me? Because there's always opportunities, you just have to be aware of them and set your sights on them. For the sake of this call and this webinar, we're going to focus only on investors that are flipping. These are people that are buying, rehabbing, and then reselling those properties. We wanted to push three simple things that they need to focus on every single day if they're flipping. Number one was finish your projects. Whatever you have going right now, you've got to get them finished ASAP. You've got to put all your energy and time into getting those projects done, because in times of uncertainty, if you're able to work on your projects, you want to get them done because there's going to be no better time to sell your house. You always have to take that mindset: today's the best day to sell my house. You may say buyers aren't out, buyers aren't doing this. Believe me, just get your house done and get it on the market and let the market dictate. If you sit around waiting two to three weeks to finish your project, you're just losing valuable time. You have to make sense of what's happening right in front of you right now. So finish your projects, get on your GCs, do whatever you have to do. Some of these villages, I've been hearing a lot of the villages aren't doing inspections. Well, we have one going in Olympia Fields and we had inspections done last week, so they may be moving slower, but a lot of these villages are still working, they're just working remotely. So get on the horn, find out with your village what's happening, what you can do, what you can't do, and then obviously get your house on the market. We're doing videos now. Are there different strategies? Sure. At the end of the day, just get your house on the market. If you want to do video, great, but just get it on the market because if it's not on the market, you can't sell it. And then lastly, be aware of the inventory. I'm going to dive into this further, but inventory is the most important stat you need to be looking at right now. If you guys remember anything from this webinar, remember that. Be aware of the inventory in the immediate vicinity of your subject properties wherever you're selling. Inventory is going to be the driver for the next three, six, nine, twelve, twenty-four months. We personally feel in the Chicagoland market that the numbers are going to pop. As soon as the stay-at-home order is lifted, you get people that have been renting or they're cooped up in condos, and they're going to go out and try to find any house they can find. So we think inventory is going to get even tighter once the stay-at-home orders are lifted, because people are going to scoop it up whatever they can. And it's spring. This was a stat from about a year and a half ago: the number of people flipping in the US had jumped to a decade high. 138,000 investors had bought a flip. I think this was to help based on the numbers I know of in Illinois. I'm not surprised to hear that from the US. So I guess you could say good news for flippers, for experienced guys. Don't be surprised if that number gets smashed by 70 percent. A 70 percent decline. Interestingly enough, we have about 120 clients or so that we work with between Illinois and Florida, and I can say with total confidence there's probably about 30 of them right now that are the pro investors that have been doing this for 10 plus years and this is their full-time gig that are still actively buying. What we're doing every single week is we're tracking the number of contracts that are being put together on a weekly basis. The number on the left is thousands. The amount of properties, this is single family through four unit, single family and condos, not commercial, just residential. At the bottom number is the week we're in for the year. There's 52 weeks in the year, and we've now just started the 17th week of the year, April 20th. Looking at this number, we had our most positive sales call yesterday with our team. You know, as weeks go, you look back a few weeks and you just see contract activity is just straight down. In total transparency, that was the powers of March. If you look at week 11 of the year, that's when all that started, late March. In total transparency, our production dropped 70 percent because contract activity just went out the window. Every week on her plate, it's weird. If you didn't put this up and you said how many places do you think went under contract the last week of March in Chicago, I think a lot of people would think almost none. And you've got to get it, it's a significant drop, but it's still over a thousand places. So what we were doing, and I won't get into all those charts because I didn't pull them on this one, but what Jeff did which was really smart was he looked at China because China was 12 weeks ahead of us. He said let's see what their residential real estate market did. If you look at that chart, their volume pretty much flattened out. I mean, it just dropped off a cliff and then flattened out, and then it started to come back. If you look at their transaction volume now in China, it's pretty much falling right back in line to where the trend was. So Jeff said okay, well if that's what happened in China, we could assume that that should happen here. Then we looked at Washington State because they're four weeks ahead of our markets. We looked at them and said okay, what's happening over there? So sure enough, we bottomed out and now we're on our way up. We bottomed about two weeks ago and now we're heading into our third week potentially of stepping in the right direction. So contract activity is on its way back up. The other thing we look at is new listings. New listings obviously with everything going on. Just one last thing here: think about this. Everybody's like there's no deals getting done. Well, last week there were 1,200 that went under contract. New listings activity, the other thing, obviously nobody wanted to put their house on the market because they didn't want anybody coming in their house, so that went right off a cliff. Now we saw last week or the week before that it's bottomed out and now that's starting to uptick. Closings, this is kind of all over the place. Closings I don't like to look at in the short term because it's what we call a lag measure. You have great pleasure and you have lag measure. Closings we're not going to see really yet. What closes now was put under contract 60 days ago, 30 days ago. So we won't see that for another month.

But now what do I do now? What see? Perfect timing.

So if you have a house that you're putting on the market, what we're advising our clients to do is put it on the market and wait. Now I want to say wait, I'm not saying wait six months, but give it 30 days. The reason why: you don't have a ton of buyers in the market right now, and there's not a lot of inventory. So we're expecting a pop. We're already starting to see the contract activity ticking up as people become more and more confident to go out. Your property should sell. So if you just rehabbed your property, get it on the market. It's a sprint to get it on the market right now, and we're in the spring. Then this thing's going to get lifted, and I won't be surprised if you get it sold even now, but once the stay-at-home orders are lifted, you'll sell it even quicker. We're seeing a good number of contracts come through, not everything, but a good number. The other thing, if you have rentals, I'm sure you already dove into this, but just screen your tenants, screen them good. We had a client from Boston that bought a house here in Florida. He put it on the market, got a contract, contract busted out, he freaked out and said I just want to rent it out. He put it for rent, he had 10 people through the house in the first 24 hours. So we're seeing that's not the issue. Honestly, it goes back to how are you buying? Are you buying right? Are you buying in the right areas? Are you rehabbing it right? It's really a game of data and inventory right now.

So if I want to stay in tune with you, and I want to, through being the optimist and pessimist, somehow figure out the realist part here, and I want some data to help guide me and give me some sense of what's going on, is this I email you?

Yeah, just shoot me an email. I'll get you on our distribution list, and we do a market update every single week. Also, we are paying attention to what economists are saying and what's happening in the stock market and obviously unemployment numbers and all that. We are not trying to predict the future because we just can't. So who knows what's going to happen six months from now, nine months from now? Nobody knows. I think in the next three to six months, if you're flipping, this sounds nuts, but I think the market is setting up nicely for you to sell your house. You're in a market that inventory is tight. So if I could give you one nugget to take away from this, look at the inventory in the immediate vicinity of your property within a few blocks. Pay attention to that, be nuts about it, and track it. If you're not tracking it weekly or daily, track it weekly. And let your listing agent know the second that starts to tick up to let you know.

Awesome. Bro, sorry, as I started, always a value-add guy. Love you, I love your business, I love doing business with you more importantly. I'm so happy that you and your family are doing well, enjoying the nice weather in Florida, and I look forward to the other side of this one and many more rollercoasters working together. Amen.

Thanks brother, love you. Thanks for the opportunity, man. All right, turn it out.