Strategy in this Market

[Bobby Paquette]

What’s some strategies you’re taking in this current market? 

[Joe Villeneuve]

All and none.

[Carlos Ptriawan]

Quote from @Bobby Paquette:

What’s some strategies you’re taking in this current market? 

sell condo and buy falling single family, every market is different but this is the best time to acquire higher end OO property in general.

[Chris Seveney]

@Robert Paquette

We are buying distressed debt.

[Steve Vaughan]

Quote from @Carlos Ptriawan:

Quote from @Bobby Paquette:

What’s some strategies you’re taking in this current market? 

sell condo and buy falling single family, every market is different but this is the best time to acquire higher end OO property in general.

Yep.  If I was hunting, equity capture on nicer homes would be the play. 
That and mortgage assumption or sub2 to keep low rates in place.  

[Carlos Ptriawan]

Quote from @Steve Vaughan:

Quote from @Carlos Ptriawan:

Quote from @Bobby Paquette:

What’s some strategies you’re taking in this current market? 

sell condo and buy falling single family, every market is different but this is the best time to acquire higher end OO property in general.

Yep.  If I was hunting, equity capture on nicer homes would be the play. 
That and mortgage assumption or sub2 to keep low rates in place.  

Yes I capture the fact that during Q3-Q4 2022, condo appreciation ranges between -10 to +5%.
While Single Family appreciation is between -5 to -35%.  The more luxury it is, the worse is the appreciation. But that didn't happen in condo market.

So I have appreciated asset like a condo, where I can re-invest into an under-appreciated asset like Single Family. 
This is one of the weirdest time in real estate market where the gap between high-end condo and low-end SF is only $100k. 

There's also another phenomenan and this is more like in "general" observation, especially in CRE, the spread between bank lending and commercial lending is the highest now compare to 2008 era ! this is because the perceived higher risk of CRE investments. This give a very high reward/risk investment to invest in debt secutization like asset-backed MBS. When spread is normalized, the IRR is north of 20%. I almost see this as very riskless strategy to make money lol

[Eliott Elias]

Owner finance & subto. 

[Matthew Wolach]

Quote from @Carlos Ptriawan:

Quote from @Steve Vaughan:

Quote from @Carlos Ptriawan:

Quote from @Bobby Paquette:

What’s some strategies you’re taking in this current market? 

sell condo and buy falling single family, every market is different but this is the best time to acquire higher end OO property in general.

Yep.  If I was hunting, equity capture on nicer homes would be the play. 
That and mortgage assumption or sub2 to keep low rates in place.  

Yes I capture the fact that during Q3-Q4 2022, condo appreciation ranges between -10 to +5%.
While Single Family appreciation is between -5 to -35%.  The more luxury it is, the worse is the appreciation. But that didn't happen in condo market.

So I have appreciated asset like a condo, where I can re-invest into an under-appreciated asset like Single Family. 
This is one of the weirdest time in real estate market where the gap between high-end condo and low-end SF is only $100k. 

There's also another phenomenan and this is more like in "general" observation, especially in CRE, the spread between bank lending and commercial lending is the highest now compare to 2008 era ! this is because the perceived higher risk of CRE investments. This give a very high reward/risk investment to invest in debt secutization like asset-backed MBS. When spread is normalized, the IRR is north of 20%. I almost see this as very riskless strategy to make money lol

Hi new here and there’s a lot of terms, can you simplify what you’re saying here plz? 

[Ben Freeman]

We just finished a brrrr deal. It was a duplex which we rent out by the room. While a little more work, the cashflow is much greater and is allowing me to continue to buy even in this market where affordability is challenged. Our next goal is to by a larger primary and convert our existing primary into a medium term rental. I think the more creative you can be, the better results you will see. 

[Carlos Ptriawan]

Quote from @Matthew Wolach:

Quote from @Carlos Ptriawan:

Quote from @Steve Vaughan:

Quote from @Carlos Ptriawan:

Quote from @Bobby Paquette:

What’s some strategies you’re taking in this current market? 

sell condo and buy falling single family, every market is different but this is the best time to acquire higher end OO property in general.

Yep.  If I was hunting, equity capture on nicer homes would be the play. 
That and mortgage assumption or sub2 to keep low rates in place.  

Yes I capture the fact that during Q3-Q4 2022, condo appreciation ranges between -10 to +5%.
While Single Family appreciation is between -5 to -35%.  The more luxury it is, the worse is the appreciation. But that didn't happen in condo market.

So I have appreciated asset like a condo, where I can re-invest into an under-appreciated asset like Single Family. 
This is one of the weirdest time in real estate market where the gap between high-end condo and low-end SF is only $100k. 

There's also another phenomenan and this is more like in "general" observation, especially in CRE, the spread between bank lending and commercial lending is the highest now compare to 2008 era ! this is because the perceived higher risk of CRE investments. This give a very high reward/risk investment to invest in debt secutization like asset-backed MBS. When spread is normalized, the IRR is north of 20%. I almost see this as very riskless strategy to make money lol

Hi new here and there’s a lot of terms, can you simplify what you’re saying here plz? 

How do I explaint it in plain English.

Here's the basis data.
Average MBS Spread between 2001-2023 is 90bps
2008 MBS Spread is 175 bps
2023 MBS Spread is 135 bps

The higher the MBS Spread reflect the volatility of CRE(and SF) of real estate market ; but at same time, those volatility would be normalized from average 20 years prior history.

Having said that, there're lot of way to exploit this, for example: buy a crashing property, buy mortgage REIT, but MBS funds, buy MBB, bRRR highly priced home, goes to syndication that purchase MF with 30% discount....

lot of method but the basic idea is , 2023 is the limited edition of 2008, and investing in 2009-2012 is the wet dream of real estate invstors LOL

[Matthew Masoud]

I'm spending a lot of time stabilizing my current portfolio. Fixing them up, raising rents to market.

I'm also looking for distressed sellers, especially in the commercial space with their mortgage coming due soon.

Sitting on dry powder waiting for the right opportunity. Not just sitting around though, active waiting. That's constantly looking around for the right opportunity.