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Last week, the most expensive listing in the country hit the market for a whopping $295M. The 105,000-square-foot Los Angeles home features a moat, running track, beauty salon, and a whole lotta drama. Nile Niami, a former Hollywood producer, racked up over $180M in debt on the build. If the mega mansion doesn’t sell soon, it’ll be auctioned off to the highest bidder next month. This property lets you go big AND go home! 

– James and David

Today’s Blueprint:

• How does metaverse investing actually work?

• There’s more than one way to get in on virtual real estate

• Cities reversing the endless rising prices trend

• How to tap into the exploding new construction market

This is why sharp investors love virtual real estate

According to a report by the crypto investment firm Grayscale, the metaverse is expected to become a $1 trillion annual revenue opportunity. But if you’re still not sure exactly what that means, you’re not alone.

In simple terms, a virtual world in the metaverse is like a Monopoly board. Investors use cryptocurrency to purchase spaces for varying prices. Because each world has a pre-set number of spaces available, scarcity helps drive prices up. To date, the biggest virtual land deal topped $4.3M. The property might not be real, but the money definitely is.

Investors turn a profit with metaverse land by developing their spaces into homes, businesses, museums, amusement parks, or just about anything they can imagine. Then they meet with an architect to draw up a 3D-rendering of the property. Finally, they send the plans to a game developer who turns their vision into virtual reality. While meta-investing is still speculative and risky, with a bit of luck, investors can sell their one-of-a-kind homes or businesses for "virtually" anything!

Our take

If your clients are coming to you with more serious questions about buying virtual real estate, connect them with a metaverse expert or investment firm that can help them make an informed decision. You should be following this developing industry, but when it comes to giving your clients investment advice, we’d recommend bringing in a financial adviser.

And on the less-risky side of the metaverse… 

Contrary to most news headlines these days, buying up virtual property isn’t the only way to get in on the metaverse land-run. Roundhill Ball Metaverse ETF was the first metaverse-based exchange-traded fund, launched in June. This fund consists of companies that are heavily involved in metaverse activities, not just real estate-related companies. 

Holding cryptocurrency is another way investors are hoping to capitalize on the mega meta real estate growth. As the value of virtual property increases, they’re hoping the currency tied to it will also grow. Most virtual real estate transactions use Ethereum, making it a popular choice for these investors.

These assets allow investors of any net worth to take advantage of virtual real estate growth without shelling out the big bucks it takes to own their own space on the board.

Our take

With highly volatile investments like those related to the metaverse, it makes sense to diversify as much as you can. But again, do your research before you go all in. Who’s running the ETF and what companies are in the fund? Make sure the fund’s risk tolerance and philosophy align with yours before you start pouring your hard-earned commissions into a new investment.

Watch for a price drop in these five metros

After the year we’ve had, buyers are desperate for relief. As of November, home prices nationwide were up 18.1% YoY. Every single state posted a positive price change last year. Arizona and Florida saw the biggest home price increases at 28.6% and 25.8% respectively. 

But it’s not all bad news for buyers! CoreLogic’s latest market prediction names the five metros most likely to see a price decline in 2022: 

High risk of decline | 50-75% probability 

• Prescott, AZ

• Lake Havasu City-Kingman, AZ

• Worcester, MA-CT

Moderate risk of decline | 25-50% probability 

• Springfield, MA

• Merced, CA

Our take

We’re expecting prices in many parts of the country to level off, but not to decline. There’s just no inventory in any of these cities. In the coming months, a wave of new homes will hit the market and stabilize prices. But demand is still so strong, even in smaller cities. And no matter what market you’re in, the best properties will still fetch an above-average price.

Schematics

The news that just missed the cut

• Adele scoops up Sylvester Stallone’s mansion to the tune of $58M

• Need some motivation? Meet the 49 richest people in real estate

• The pandemic housing market: how it started, how it’s going

• If Realogy wins this fight, your commissions may look a lot different

• Land new listings this year with these 22 quick tips

Foundation Plans

Advice from James and David to win the day

This year we’re expecting an abundance of new construction homes to hit the market. That means a huge area of opportunity for the agent who knows how to tap into it! To land your own new construction listing, you’ve got to: 

Know your s**t. Before you approach a building site or a developer, study what has sold, what local buyers are looking for, and how to score the best sales price for your developer. 

Get ready to get dirty. How do you find developers? Walk the construction sites. It’s your best chance of getting in front of the decision-maker. We’ve had fantastic luck showing up to sites and pitching in the moment. When you know what you’re talking about and you present with confidence, the world is at your fingertips!

Build relationships. Partnering with just a few developers can really take your career to the next level. Today’s networking will pay off big time as you create a pipeline of listings that will feed your business for years to come.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

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Thanks for spreading the word and we'll see you on Friday! 

– James and David