The Norris Group Real Estate Podcast

Bruce Norris Market Timing Journey | Part 1 #943

• The Norris Group, Craig Evans

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In this episode, Bruce Norris takes listeners through his personal journey into real estate and the path that led him to master market timing. From digging into early research and writing his first market timing report to navigating the 2008 crash and identifying the recovery in 2012, Bruce shares the key insights that shaped his investment strategy. He breaks down why understanding market cycles matters, how timing influences risk and opportunity, and what trends may shape the future of real estate. 


In this episode:

  • Bruce shares how he first got into real estate and discovered the importance of timing.
  • His early research into market cycles and why timing shapes smart investing.
  • What inspired Bruce to write his first market timing report.
  • Key lessons from the 2008 financial crisis.
  • The role of market timing in managing risk and finding opportunities.
  • Bruce’s outlook on future market trends.


The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669.  For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.


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Narrator:

Welcome to The Norris Group real estate podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we'll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever-changing real estate market. continuing the legacy that Bruce Norris created, sharing valuable knowledge, and empowering you on your real estate journey. Whether you're a seasoned pro or a newcomer, this is your go-to source for insider tips, market trends and success strategies. Here's your host, Craig Evans.

Joey Romero:

All right. Welcome everybody to The Norris Group Real Estate Podcast. We have a very special guest today, Mr. Bruce Norris, oh, wait, let me do the official two page introduction. I got it right here. Hey, Bruce, how you doing?

Bruce Norris:

I'm good. Joey, how are you?

Joey Romero:

I'm doing well, doing well, trying to try to get my lighting right. Oh, we can. So today, I thought we would, we would take some time and go through the journey of your time reports and how they came about, you know? What you learned, you know, how accurate they were and and just, I thought it'd be fun to do that, and then, and then get to the end, talk about, you know, what this upcoming event will talk about, and what you hope to accomplish with it.

Bruce Norris:

Okay.

Joey Romero:

But you know, I honestly, I know your history. You know, I'm sort of, I fancy myself a little bit of The Norris Group and the Bruce Norris historian. But I've heard you're journey through a you know, I got fired. I was working hardware. How did you end up in buying houses, though? I don't think I've ever heard that.

Bruce Norris:

Well, I was in sales, and I had somebody that I knew. He said, 'Let me show you what I'm doing. I work for a company that buys houses', and so I find houses for him. So I went with him. It was a home in Orange County. We went in there was a single lady that owned the house. We were in there about five minutes. We got kicked out, and went back to the car with him, and I said, 'You know, the lady will sell you her house. You just didn't listen to her, and you irritated her'. So I knocked on the door and got us back and we bought the house. So driving home that night, I thought, You know what? I think I understand the concept. You know, the basic thing is, we have money, you have equity, and sometimes our stuff is cooler than yours. I just simplified it to that extent. I then went, I said, 'Okay, what do I have to have to work for the company?' And I had to have a real estate license, back then you could get in a weekend. I took a course. I sat in front of the owner on Monday, his first question, and by the way, there were two people applying for the job. This guy had brought his trophy case with him, so he literally had 50 plaques, you know. And then he went first, and I went. He said, 'How long have you had your license?' I said, 'One day'. And he laughed at me said,'Yeah, this, this is no place for an inexperienced agent'. I said, 'Well, let me ask you a question'. I said, 'Isn't the bottom line here, whether you buy properties for profit or not?' He said, 'Yeah'. I said,'You'll know in 30 days, I can do that better than anybody you have.' And he was like, 'Okay'. Now what was interesting I had, I still had a job. I mean, I was selling electrical stuff to hardware stores, so I couldn't do it full time. I would get there about noon, and they had, he ran ads and stuff, and you're supposed to take there were five other buyers, so every sixth phone call was you. I didn't wait for that. I didn't know anything about real estate, but I just called every expired listing. Made offers on anything that made sense. I was the least popular person in Orange County real estate for the three months I was there, because I did some pretty bold things anyway. Long story short, I bought 10 houses the first month, set a company record, made a year's worth of money, and I did it every month I was there, and then I, I really didn't like how he do did business.

Joey Romero:

So I guess that's what I was gonna get to is that you learned the ropes, you know, while you were there, but you also learned that it didn't fit the person that you were, you know, the way they did things and and the way they just kind of were, right.

Bruce Norris:

You know, I can't even say I learned the ropes. What I learned I already I a price that's at 65% of value. So that's what I did, well, and there was a lot of things Joey, when I left that company, there were big holes. I understood how to get a yes answer. I didn't understand how to do a lot of stuff that you think, okay, oh, now you have to fix your house? What? So that was a lot easier if I was wholesaling it to the company I worked for, but there was a transaction where I was just really disappointed at the outcome. Bought it from a lady that had lived in neighborhoods for 30 years. Neighbors were so sorry she was leaving. They threw a big block party, and then the guy didn't close, and so she had all her furniture sent to Northern California. She had to bring it all back face a neighbor. She wasn't going. That

Joey Romero:

Absolutely disappointing. So now, from correct me, if I'm wrong, from what I understand, you know, you worked and you had some success. You bought houses and you ended up doing your your first million dollars in a big transaction where you were, you know, you we've heard the story about how just irritated me. I said, I don't want to deal with the you lost, but what I want to get to is the next time you went out on a strategy, it didn't really work out. I'm talking about Palm company that does that. Springs, and that caught you off guard. And is that really what sets you on this market timing journey, like not knowing why things weren't working?

Bruce Norris:

That was my first glimpse at it. You know, it was interesting because I had the success on the 50 building lots that was right outside of the track of houses I had a problem with. So I I had a million dollar success selling 50 lots, and six months later, couldn't sell three houses, and you're going, 'Okay, well, that was my first inkling'. But a few years later, there was a house on a VA list, and that was really the eye opening thing that had me just scratching my head. You know, at the time, I had already been doing it for over 10 years, and this was a house on the VA list. Gonna try and remember, Oh, well, I remember because, Aaron's car. Remember I was, that's it was Aaron graduated, and I bought his car for 15 seven, and then I buy a three bedroom house in Riverside that would rent for 500 bucks, for 13-3. And what bothered me about it, it was on a VA list, which means all the people that would occupy it got to bid first. No one did, and their asking price was 15. So no one would buy a house for 15 that rents for 500 that was first, wait a minute, and then I was the only bidder. And I knew the formula, so my bid for the 15 grand house was 13-3, and I was the only bidder. And it was that moment that I just thought, I have no idea what happened to real estate. How could you have, you know, the momentum that I could sell 50 building lots inside of, you know, the timeframe I had, like, a three or two month escrow, and I counted on being able to sell all those lots that I did, and then it changes, where you couldn't sell anything, and you had to give it away or trade it for a boat, which I did, by the way, so it just was that aha moment, and I didn't start to learn it as much as I wanted to find the expert that had figured it out. So I went to the library and I looked up every article for 25 years about how real estate works. You know, what's the timing of that type of thing? I just found nobody that gave me a complete answer. I found a lot of people that said things after the fact that actually disagreed with what they said before the fact. And so I thought, okay, maybe you can't figure it out, but I'm going to try. And that was the impetus to try and figure out, and it was probably the biggest thing for me was I didn't have an agenda to be somebody. I wanted to know where to put my money safely and know when to get the heck out of it. Because you're usually in a really euphoric state where it's about the same time you used to say, I'll see you later. It's really hard to do. And you also ought to say, I'm going to go all in. When everybody hates real estate, they're fearful. But you can do that with charts, if you understand them. Can you do it emotionally? No.

Joey Romero:

So, so once you figured it out, and you're like, Okay, I think I've got this, at least this first go at it. I've got to figure it out. What made you decide to give it away? We'll not give it away, but you know.

Bruce Norris:

You know, I really wrote that report to help my dad. That was the original thought. Is that I wanted my dad to do better in retirement, that I knew where he's headed, and so I wanted him to understand he could buy a rental house, and it probably would work out really well. And so that was kind of the gist of it. You know, I was already speaking in front of some real estate places, and so that was, I had that door open. And of course, it's interesting when you write a very happy report at the bottom of a market, you're just wonderful.

Joey Romero:

People can't wait to book you up.

Bruce Norris:

Yeah, then they don't believe a word of it. But, you know, I said prices were going to double and but they were just happy it was going to do something other than go down or be dead.

Joey Romero:

That was an ask you. I was going to ask you, what was your prediction and then what was the result? So, what was the result?

Bruce Norris:

Well, California, come back, yeah. Predicted prices would double in eight years, and it doubled in seven and then tripled in nine. And I was like, well, mathematically, that makes no sense to me. And so we had an event where we had hundreds of people, and I was, we were at an affordability number that had never been attained before. We were at 13. We always stopped at 17 and I, in front of an audience, I asked a lender, 'Stated income loans, where does the stated income number come from?'

Joey Romero:

So we're jumping ahead, though now, right? Because this is, it tripled. But now you're starting to talk about why you, why you created the next one, which was, right?

Bruce Norris:

Like I got, I got concerned that, okay, how did we even get to this price level? Because it had never, it never happened. Well, as soon as she answered the question, I said,'Stated income, loans, where do you get the number of the income?' She said, 'Oh, we just make it up'. And there had to be at least a 42nd pause as I contemplated what that meant, because that was an acceptance of an, in the whole industry. We do not care that the people actually make the money and the people that buy the loans from us don't care either. We just want to fund a loan. And I went it, 'Whoa!'

Joey Romero:

And I'll tell you, I'll tell you from the consumer side, because that's the first time I ever bought a house, was in 2002 and so did I understand what was going on? No, but my real estate agent brought in a lender that just filled out that stack of papers, right? 'Oh, initial here. Oh, that's just saying this. Oh, it's, yeah. Nobody stays in this, you know, you're probably gonna refi in five years', you know, I didn't really understand what, what I was signing. I was like, 'Well,'Okay, I qualify? Me? Okay, let's do it', you I get to buy a house?' know. And so that's how it was. So I imagine there was probably millions of people that were in that same boat, you know.

Bruce Norris:

Yeah. For sure. And for three years, four years, it was an exciting thing you did, right? 2000 2006 was cool.

Joey Romero:

I bought, I bought at 202 in Corona.

Bruce Norris:

Right.

Joey Romero:

202,000 and like all my neighbors were talking about, 'Well, we're refi, we're refinancing'. 'Why are you refinancing it?' 'Well, because they're worth 300 now'. 'Oh, they're worth 450 now? Oh, they're worth 550 now?' And so all my neighbors were just refi in to the hilt, you know. And I had a wife that stayed at home, and she was like, 'No, we're not doing that. We're not doing that. We don't need a new car. We don't need a boat, you know, I just want, I just want to be home with the kids and, not lose our house'.

Bruce Norris:

Okay.

Joey Romero:

And so we didn't, and luck to leave we didn't, because, you know, while everybody's, you know, values still went down even below what I had, we had, I didn't have to lose my house because, but everybody around me did.

Bruce Norris:

Yeah, oh, that was a crazy, a crazy time.

Joey Romero:

So all that stuff's happening. When did you actually decide, like, 'Hey, this is gonna hit the fan, and I want to figure out how bad it's gonna be.'

Bruce Norris:

Well, oh, I think at '05 or '06, we wrote a report that was...

Joey Romero:

Yeah, you wrote in'06. But you know, that had to, there hadn't been some lead up on why you did it

Bruce Norris:

Well, but we wrote a report before the crash that had...

Joey Romero:

You did.

Bruce Norris:

Yeah, and it was basically telling investors, this is on its way, and that's when we went to take everybody to other states to buy houses. So we had a lot of California investors selling their stuff and going to Texas. That was the state that I felt was the safest, because it virtually went up when California had gone up and gone crazy. Texas had barely moved. You can still buy a house for 120 grand. It was new. And so we had a bunch of properties that we bought. But then when the number kept on getting crazier, that's when we wrote the crash and said, 'Okay, this is really going to be ugly'.

Joey Romero:

What was the prediction for California Crash?

Bruce Norris:

There was a range. There was, you know, if you get this kind of a number of foreclosures, it'd be this, but it was, it was a good half off is, was...

Joey Romero:

What ended up being the result? Wow. Would you say that this time period as

Bruce Norris:

It was a little more than half, not much more than half. But that was, that was unbelievably devastating to people that owned real estate, because they kind of did what you said. As equity grew, they refined it, and so they were pulling out stuff. If they had stayed maybe with the original loan, they might have survived it. But was also going on, Joey, which is really devastating to prices, was the market became dominated by lender owned properties, and the lenders were very stubborn at first. Yeah, we were all 400 we're going to ask for 350 and so we had relationships with these REO agents, and they asked us to offer them 100 grand, just to smack the lender upside the head and go, you aren't going to get 300 or 200 but they didn't do it right away. What happened, though, the building department had nothing to do, so no one could build a house, right? Made no sense, but those people were employed with nothing to do. So what did the builder or the like Marino Valley people that work for the city, they inspected REOs, and they find them $1,000 an infraction a day. Now most of these lenders weren't in California, so they would get an inspection and say, you have a green pool?You have a broken window? You have a garage door that's cracked? Starting Monday, devastating as it was, free was the biggest wealth, generational that'll be three grand a day, and it would go to 100 grand. And then they couldn't go beyond that. Lenders freaked out because they weren't getting the 150. So we started buying properties in Moreno Valley for 70, 80 grand. There was one that actual the lender fine was more than the purchase price, and they had to write a check to get rid of the house that they had a 300 grand loan. wealth creator that you had in your lifetime? Only because I got out. You know, when I wrote the report, we had, we had a track of homes that we're building, and we made sure that was done in time, and those were all done. Had I not gotten out of California, the only thing I kept was my residence, but I had some rentals, and I had those other houses. I had 100 total houses I sold in 2005 and six, and that's the only reason I survived it, because I had made a profit, I had sent it on the fine line and, you know, waited for the prices to come down. Well, who's been...

Joey Romero:

I've heard from a lot of people that did the same thing because they followed you.

Bruce Norris:

Yeah, that was scary, though. You know, it's interesting again, the mood of, when you have a report called the California Comeback and everybody's depressed about the real estate market, they love to hear you speak when you're at the peak of the market, and you write a California Crash, when everybody's making money and you can't do anything wrong, that's a very different reception. You're like, 'What are you talking about? Man, I have listings that sell for hours'. Yeah, that's not wonderful.

Joey Romero:

I've heard you talk about your hairdresser. You know, everybody's jumping real estate...

Bruce Norris:

...three of them in one year. Well, oh, that's often.

Joey Romero:

So I was, I was doing insurance for 10 years between 2004 and 2014.

Bruce Norris:

Yeah.

Joey Romero:

Well, in 2008, guess what? Every application that we got in to sell insurance was an ex-realtor. They were just left the real estate industry. They're trying to start over, but.

Bruce Norris:

The guy that was the biggest guy in Moreno Valley that had REO listings by the many hundreds, some almost 1000 I would be there to speak to their office, and they would go over their monthly numbers, okay? And it would be like,'Okay, this guy has 70 closed transactions. Second place, Doris with one'. It wasn't anything.

Joey Romero:

Yeah.

Bruce Norris:

And by the way, that agent took our seminar, and made relationship with all those agents, or all those companies, before they had foreclosures.

Joey Romero:

So, all right, so after that, you know, once the dust settled, people were actually getting really active. Got to, you know, buy some houses on the cheap, but there was a point, where your your next time report was in 2012 and it was called All In or Fold. Why was that a big deal and that in that time frame?

Bruce Norris:

Well, we had really started deteriorating price in '08, and it just went down, and then it stayed there. So from 2008-2009 lot of the price damage was done, but now you're at a price that's half and you don't have, you don't have any of swing. It's just camping out there. And it's camping out there with people getting paid eight grand to buy one. So my daughter Sarah had an eight grand check from the government that she got so she could buy a $350,000 for 100 grand. That's how much they were motivated to try and get somebody back into wanting real estate, okay? And it just kept on sitting there, and the price from the national number to the California number had never been that close, and I just played devil's advocate. I wanted to know, and maybe it's over. Maybe the differential from California to the national number is not going to be there anymore. So I studied all that, and I came out with the opposite conclusion, that it's all in and as a lender, we added, we created an eight year program so people could buy in 2012 and finance it all the way to 2020 and I'd have to say we created our fair share of multi millionaires doing it.

Joey Romero:

But ultimately, what came out of the report was that, yes, it would, it would, it would go up again.

Bruce Norris:

Yes, it would escalate. And as you know, the Mood-O-Meter chart that we have, that Mood-O-Meter is very gradual in process. You don't get euphoric in 2012 you're still afraid in 2012 and 2013 you feel a little better in 2014 and then by 2018-2019 okay, we're losing people that are arrogant. But it is, it's a process. Because especially when you sell properties, you realize, okay, I don't have any multiple offers anymore. And when it was in the heyday, you knew by noon you were going to have seven offers and you were going to sell it. That's a very big difference in confidence level of what you can get, you know.

Joey Romero:

The next time that you jump back into the market timing report, there was one in between. There was category five, but the one where you really made some headlines is one that you thought was going to be your, you know what? I'm this is the last one I'm gonna do. And it was 2% mortgages, 40 trillion in debt and other surprise endings. That was, I remember that because that's the first time I ever went to an anything that was Norris Group event. Okay, you know, Aaron. Aaron had asked me, like, Hey, are you interested in coming out? If you are, like, come on out. Take a look and see if this is something that you'd want to be a part of. And so that was my introduction to The Norris Group.

Bruce Norris:

Okay.

Joey Romero:

And so I came in and I saw, you know, it was like 400 people at the convention center, and it was, it was, it was you doing your thing up there, and it was an hour of Aaron doing his, you know, innovation in real estate and what's coming and, and so I was excited, but that was February 4, 2017 so how cool was it to actually see that two point, whatever number come to fruition? Because...

Bruce Norris:

Yeah.

Joey Romero:

You were early. You were early on that. I mean, you came out and said, hey, it's gonna be, yeah.

Bruce Norris:

No, yeah. Well, first of all, most people thought, 'Well, of course, that's just really a dangerous thing to say, Bruce, because that'll never happen', you know. So it's interesting. John Burns, you know who he is. He's got a big following at the builders and all that. And he and I are exchanging emails as the 10 year T-Bill goes goes below 1% which is was crazy, and that made the the mortgage rate go below three. That's such a significant event because of the safety it created. So you know, one of the things that the event that we'll have is there's a chart that shows 40% of all real estate, residential real estate, is owned, free and clear, and another 40% which is like up to 80% has a mortgage that's under five it's just sort of like you have built in safety for a ton, a ton of the property, very little of it is at risk. And that's why, you know, if you go on YouTube, oh my god, you know, foreclosures are up 50%, well, what did they go from two to three? In other words, it's a rounding error in 2000's and let's say eight at the worst, it was 70% of the California market. 7 of 10 sales were lender owned properties, and it was the value of what you had. Well, now it's not even, even in Florida. Florida is like, 'Oh my gosh. Florida is terrible'. Well, Florida's REOs and short sales did not make up 1% of the closings. They do not impact the value of what you have now, what does? Okay? You can have new homes that are having a hard time selling, and they have a lender that has a 12 month loan. And so, okay, I'd like you to get paid back, please. That type of thing. As far as the normal person fearing that foreclosure going to dominate, there is just no way.

Joey Romero:

All right, everybody that's going to do it for part one with Bruce Norris as we talk about his journey through market timing. Be sure to tune in next week as we get into his latest coming next year, in February of 2026 Beyond

Uncharted:

What's next has never happened. Tune in to hear about why he decided to write another report.

Narrator:

For more information on hard money loans, trust deed investing, and upcoming events with The Norris group. Check out thenorrisgroup.com. For more information on passive investing through the DBL Capital Real Estate Investment Fund, please visit dblapital.com.

Joey Romero:

The Norris Group originates and services loans in California and Florida under California DRE license 01219911. Florida mortgage lender license 1577 and NMLS license 1623669. For more information on hard money lending go to thenorrisgroup.com and click the hard money tab.