Introduction

America was predicated on the idea of equal opportunity for all of its citizens. It was built on the dream that if you worked hard, you’d be able to build a good life for yourself and your family. Core to this dream was the pursuit of homeownership, a place where your family could take refuge, grow into, and pass down to future generations. A home was something to be proud of and a tangible way to cement one’s legacy, and most people could cement their legacy by working hard until they had enough money to buy such a home.

Things are different now. It’s harder to become a homeowner today than it’s been in any other point in history. In short, the American dream is dying.

Owning and investing in real estate has historically been a great way to build consistent wealth over time. If you take any 10 year view of US real estate, you’ll see that the average home has appreciated at least 30% and delivered consistent monthly cash flow through rents. Unfortunately, for the last 10 years, home prices have been on a tear and the average person’s salary has failed to keep up. The median home price to income ratio for Americans is now at 7.78x – the highest it’s ever been. It would take the average person 8 years to be able to afford a home assuming they keep 100% of their gross salary. 20 years ago this ratio was 4.2x and, even during the 2008 housing crash, this number was just above 7x. In short, housing has become unaffordable.

With mortgage rates now climbing well over 6%, and real estate prices at sky high levels, the situation is dire. The average person wants to invest in real estate, but doesn’t have the means to access proper financing through bank leverage (mortgages) or cash.