Housing crash deniers ???

[Greg R.]

Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions. 

However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.

Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct. 

[Greg Scott]

The market may correct, but I firmly believe there won't be a crash.  The reason is simple, equity.

Before 2008 people with no income could get liars loans and buy much more real estate than they could afford.  We heard stories of cleaning ladies buying multiple million dollar homes.  When home prices starting falling, the whole thing collapses like a house of cards because nobody had any equity.  They couldn't sell and get out.  We had cascading foreclosures creating a downward spiral.

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  Appraisals have not been keeping up with prices and lenders won't lend above appraised value.  We sold a house in 2021 and in one day had 20 offers.  Several of them had acceleration clauses stating they would pay more than anyone else up to $X.  Both of them waived any financing contingency because they KNEW the house wouldn't appraise for what they were offering.  They had to make up the difference with cash.  Those people have a ton of equity in their homes.  If they had to sell, they might take a haircut, but they aren't going to get foreclosed. 

There is no  house of cards here to come tumbling down.

[Carl Fischer]

@Greg R.

The economy is being reset. The minimum wage is now $15/hour. Almost everything has increased/inflated in price. Some inflation is caused by an excess of money(PPP, EIDL, build back better) and some from supply chain issues creating shortages.

The correction/crash cycle will be less severe as a result but will occur. As always some locations will be better and some worse

than others. Real estate is local not national.

[Michael Wooldridge]

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Notice how all the chanting of "crash CRASH" has now shifted hard into reading tea leaves of "it's coming, IT'S COMING..... someday" lol. 

In 2020, somewhere in America, there was a bearded, weary old warn out guy who threw off his sandwich board sign, did a jump for joy, yelling and hooting, grabbing people saying "see, SEE, I TOLD YOU SO, you all laughed at me. year after year, decade after decade, but I KNEW IT, when Nixon got thrown out I KNEW any day those damn ____ were gonna get us with a virus" LMAO. 

Know who sits the sidelines and waits for things to happen, SPECTATORS. How many games you ever seen a spectator win, yup, 0. 

Feel free to lie to yourself how spectating will lead to playing in the game, by all means reduce competition, I appreciate the profits from others non-participation. But don't try to get me to chug your arsenic kool-aid with ya. 

Market appreciates, I got strategies for that. Market stagnates, I got strategies for that. Market drops, I-got-strategies-for-that. I'm a Pro-player, rain or shine, hot or cold, I play the game and score goals regardless of conditions. The conditions are just part of the sport. If you only play on perfect sunny days of temperate temps between _ and _, when humidity is under _, blah blah blah, lol, well hell you might get "A" game of two in before ya die. Good luck with that. 

But I suppose, some truth that if you never play you can never lose right. You can also never win, never get better, never move forward. No thanks, sounds like a miserable life. 

Hey, remember that guy who never risked? Yeah, neither do I, or anyone else. 

 there's huge difference between headline narratives and trendline narratives.

This is BULLISH:
- Dollar is 3 months low
- Dow is 9 percent away from ATH 
- Yield is dropping below 4 now and mortgage rate is crashing 50bps to 6.6 
- Long term bond got the highest record # of bid
- Vix at all time low
- corporate America is giving higher guidance for the whole next year
- active real estate in US MoM inventory is ZERO, this is extremely bullish for stable price action LOL
- 25% of real estate purchases are cash buyers and they keep buying more every month.

Just a month ago, all indicators above signaling a bearish market. not sure why people unhappy

I won’t be happy until I see 2023 rental income similar to 2022, if it is, I’ll build more. 

Even I'm not expecting that more like 5-7% down. Well assuming you mean first half of 22/last half of 2021. I assume we are talkign about STR of course.

More profit is always good but I need to do something with cash. I guess the alternative is you could go into the markets but it's hard not to see the current run up as a bit of a bull trap. But then I'm just honestly comfortable with real estate I know how to not lose money there. Stocks have too much variance and no passive so I just don't care for it - not to mention more write offs with housing.

STR is a whole different conversation, COMPLETLY different everything.

First off, STR is NOT Real Estate Investing, it just is not. STR is as much real estate investing as a car wash is REI, or a McDonalds is REI. STR is micro-HOSPITALITY business. It has vastly different factors to it.

Not to mention the plethora rushing into the segment with little to no clue what the heck there doing, and then making a race to the bottom with prices to try and overcome their ineptness in running a hospitality asset. 

We have mass flooding of the market in not just offerings but also poorly ran units. There absolutely with 100% certainty will be various "Crashes" in the STR segment, hyper localized in there expression though, and extremely short-ran durations.

And it's a GOOD thing, it's a growing pain, a coming of age for the STR industry and segment. It's the STR gold-rush and just like the Yukon most will go bust for the market to find itself.

I have multiple of both short and traditional. It’s statements like this though that’s put you out in left field. 

If you had said hey STR has attracted people who have no clue what their doing - like the 2006 run up did on flippers - then I would agree. THere are plenty of investors who have proven STR is investing. Hell if nothing else the high end luxury market at $70k - $100k a month for beach front or at nation parks proves it. BUt yeah STR is not investing…. 😂

 Read what I wrote, not how you took it. 

I was very clear that STR is NOT REAL ESTATE Investing, and it's NOT. It is Hospitality Business, and thus, Hospitality Investment.

The word investment is used way too liberally. Real Estate Investment/investing is a specific terminology with a specific meaning, which STR is NOT part of. STR is a Hospitality Business. One can "invest" in a hospitality business, yup, and it has a component of real estate, but it is no more real estate investing then it is furniture investing.

 Ehh I look at it differnetly. There’s the investment portion of the business which you are still investing ina property. And then there is some hospitality. Frankly I farm it out - it’s just easier so that I’m just managing numbers. 

But not so sure why you would throw out the entire investment portion of the property. It’s not like you aren’t look for appreciation even if you are grabbing more cash flow. 

In Real Estate Investing; the real estate itself is "the" investment. The asset is the business. There is the business component of renting out, conveying use of the property, or doing some change to the property to re-sell at profit, but follow that the business is the property itself. 

STR is NOT Real Estate Investing, because while there is a property, the business is not the property itself, it is the Hospitality. The property itself is not leased by people. It is the FURNISHED property, the location, the packaging. I get it, it does seem much like real estate investing but ask yourself this, is Hilton a real estate investor? No, they are a business, just like McDonalds. They sell a service, the service sold is a user experience.

In real estate investing we "sell" a product, not a service. The "buyer" uses the product in connection to other actions. 

Again, STR has a real estate component, but the real estate itself is not the whole, just a part. The real estate is simply where a person provides the service that customers purchase. One can do STR without ownership of the property, one can do STR with a tent, or even just raw land, I have seen these.

Also "investing" is different then "an investment". GM makes "investments" in it's robotic assembly line systems, right, but those are just assets to perform the construct of making there final product of which they sell. The "investment" is a function of the business. In STR the property is similarly just a component of the "production" to make the final product which is a service. Hospitality is a Service industry, not a product industry.

Real Estate Investing is an asset industry, more similar to ownership and trade of stock. 

Think of the operational aspect, STR is an active business operation. It requires a continuous active day-2-day operations.

There is many many aspects to this but end of day it all boils down to the defining difference that STR is NOT Real Estate Investing, it has a component of such, so STR can and most often does incorporate Real Estate Investing but it is, not in and of itself, REI.

Real Estate Investing can utilize STR. But again, each is distinctly separate.

This is a BIG part to the whole calamity in STR many are getting into. Not all, many are great at STR but I assure you all ro near to all of those doing well in STR "get-it" that STR is a Hospitality Business.

Similarly, a 200 unit community in MFH is more then just Real Estate Investing. 

It's a distinction between an active B-2-C business, and a stand alone "investment". 

Maybe more said to say a standard rental is 90% investing and 10% business operation, and STR is 90% business operation and 10% investment. Look at the allocation of actions over say, 5yr span. In STR those actions associated with the real estate is a very tiny portion of the whole. It's a 1 time event/ action and the operating of the asset, it's the everything, right. In a standard rental it's a passive action, setting a user contract and walk away. I know, there is PM but in fundamental PM is an over-sight activity not an active action. There is brief windows of active actions but let's look at say a 3yr lease, over the 3yrs there is maybe 14 days of active actions at most when figuring a standard 8hr day and going by labor hrs of input. Honestly, the ideal window is 8 labor hrs per yr of leasing. yeah, ~$100mnth of PM does not purchase a whole lot of labor hrs. How much is the average service provider in real estate, yeah, around $100 per hr billing rate right.

I get it that this defining line is hard for many to understand or see the distinction of, but this is a major defining line of difference and it's why the BIG impacts of results stand. We have people jumping into STR thinking, incorrectly, it's real estate investing, and then suffering for not comprehending the very active business operation aspect and trying to do it passively.

And on aspect of hiring management, I can buy a restaurant and hire a GM to run everything, it does nto make it Real Estate Investing, it is food service. The real estate is a component, how one acquires the real estate, positioning, it will impact the business BUT end of day it's not the product, what is being done at the site of real estate is the product that dictates profitability. 

In REI, the asset itself dictates profitability. In STR, the service itself dictates profitability, a great property can do poor performance in str disconnected from the property itself.

Picking up what I am putting down? 

 Ehh I I’m picking up your nit picky as hell yes. I get it I just think it’s stupid.

1) if you get into STR and don't relative it can be more active work than a traditional you are an idiot.

2) My traditional is more work than the STR because of the management firms I use. And my traditionals aren't much work.

3) Your argument over real estate investing comes down to degree of work which is frankly a meaningless line. 

Frankly real estate investing is any property you buy used for a long term investment. How you operate that investment whether it's traditional, business, MF, STR is an independent action from the property investment itself. It can add more value to the investment but it's just a business.

your line drawing is beyond odd too me any way you slice it. And I'm not sure how in your mind you justify that because it's traditional are low operations (if you screen well) it somehow is investing but because STR require more it's not a property investment. It's just odd.

[John Carbone]

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Notice how all the chanting of "crash CRASH" has now shifted hard into reading tea leaves of "it's coming, IT'S COMING..... someday" lol. 

In 2020, somewhere in America, there was a bearded, weary old warn out guy who threw off his sandwich board sign, did a jump for joy, yelling and hooting, grabbing people saying "see, SEE, I TOLD YOU SO, you all laughed at me. year after year, decade after decade, but I KNEW IT, when Nixon got thrown out I KNEW any day those damn ____ were gonna get us with a virus" LMAO. 

Know who sits the sidelines and waits for things to happen, SPECTATORS. How many games you ever seen a spectator win, yup, 0. 

Feel free to lie to yourself how spectating will lead to playing in the game, by all means reduce competition, I appreciate the profits from others non-participation. But don't try to get me to chug your arsenic kool-aid with ya. 

Market appreciates, I got strategies for that. Market stagnates, I got strategies for that. Market drops, I-got-strategies-for-that. I'm a Pro-player, rain or shine, hot or cold, I play the game and score goals regardless of conditions. The conditions are just part of the sport. If you only play on perfect sunny days of temperate temps between _ and _, when humidity is under _, blah blah blah, lol, well hell you might get "A" game of two in before ya die. Good luck with that. 

But I suppose, some truth that if you never play you can never lose right. You can also never win, never get better, never move forward. No thanks, sounds like a miserable life. 

Hey, remember that guy who never risked? Yeah, neither do I, or anyone else. 

 there's huge difference between headline narratives and trendline narratives.

This is BULLISH:
- Dollar is 3 months low
- Dow is 9 percent away from ATH 
- Yield is dropping below 4 now and mortgage rate is crashing 50bps to 6.6 
- Long term bond got the highest record # of bid
- Vix at all time low
- corporate America is giving higher guidance for the whole next year
- active real estate in US MoM inventory is ZERO, this is extremely bullish for stable price action LOL
- 25% of real estate purchases are cash buyers and they keep buying more every month.

Just a month ago, all indicators above signaling a bearish market. not sure why people unhappy

I won’t be happy until I see 2023 rental income similar to 2022, if it is, I’ll build more. 

Even I'm not expecting that more like 5-7% down. Well assuming you mean first half of 22/last half of 2021. I assume we are talkign about STR of course.

More profit is always good but I need to do something with cash. I guess the alternative is you could go into the markets but it's hard not to see the current run up as a bit of a bull trap. But then I'm just honestly comfortable with real estate I know how to not lose money there. Stocks have too much variance and no passive so I just don't care for it - not to mention more write offs with housing.

STR is a whole different conversation, COMPLETLY different everything.

First off, STR is NOT Real Estate Investing, it just is not. STR is as much real estate investing as a car wash is REI, or a McDonalds is REI. STR is micro-HOSPITALITY business. It has vastly different factors to it.

Not to mention the plethora rushing into the segment with little to no clue what the heck there doing, and then making a race to the bottom with prices to try and overcome their ineptness in running a hospitality asset. 

hahaha part of this is Biggerpocket (as a whole) mistake. No wonder John wrote that good post about STR promoters.

I am seeing this clueless fools now pricing there STR down to, I kid you not, $45 per night on say a 3br HOUSE, which I gotta assume it's because there freaking out over seasonal vacancies, thinking "I know, i will just make it cheaper", ugh.... I spoke with one last night, I asked him just who the heck he thought he'd get at $45 a night, and then asked if he has rubber sheets in the place, or maybe wanted to go to a charge by the hour, because that's about who and what he is gonna get.

Yeah, and how many have tried to say my doing STR-Arbitrage is "dumb" because you don't own the property, lol. Well, how many of these who rushed in without a clue, paid based upon STR sky-high rev expectations just to find oh, it actually takes active work to run it, and can't, or suck at it, but great they own this property they can't monetize profitably..... There going to be wishing they listened to me and Arbitraged there start vs purchased.

But know what, when they fail, I bet they will blame the market! It won't be the furnishings from garage sales, nope, no way. Nor the lack of marketing, no way, couldnt be. it will be the markets fault.... Uh-huh, sure it is. 

 It is a day to day operation, but it’s still real estate investment. Can’t be compared to a restaurant. According to the IRS it is real estate, and it can be sold to anyone to live in long term. I think the IRS knows more than you James 

[Bobby Larsen]

What are we defining “crash” as?

[Fernando Figueroa]

The truth is, nobody knows.

[James Hamling]

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Notice how all the chanting of "crash CRASH" has now shifted hard into reading tea leaves of "it's coming, IT'S COMING..... someday" lol. 

In 2020, somewhere in America, there was a bearded, weary old warn out guy who threw off his sandwich board sign, did a jump for joy, yelling and hooting, grabbing people saying "see, SEE, I TOLD YOU SO, you all laughed at me. year after year, decade after decade, but I KNEW IT, when Nixon got thrown out I KNEW any day those damn ____ were gonna get us with a virus" LMAO. 

Know who sits the sidelines and waits for things to happen, SPECTATORS. How many games you ever seen a spectator win, yup, 0. 

Feel free to lie to yourself how spectating will lead to playing in the game, by all means reduce competition, I appreciate the profits from others non-participation. But don't try to get me to chug your arsenic kool-aid with ya. 

Market appreciates, I got strategies for that. Market stagnates, I got strategies for that. Market drops, I-got-strategies-for-that. I'm a Pro-player, rain or shine, hot or cold, I play the game and score goals regardless of conditions. The conditions are just part of the sport. If you only play on perfect sunny days of temperate temps between _ and _, when humidity is under _, blah blah blah, lol, well hell you might get "A" game of two in before ya die. Good luck with that. 

But I suppose, some truth that if you never play you can never lose right. You can also never win, never get better, never move forward. No thanks, sounds like a miserable life. 

Hey, remember that guy who never risked? Yeah, neither do I, or anyone else. 

 there's huge difference between headline narratives and trendline narratives.

This is BULLISH:
- Dollar is 3 months low
- Dow is 9 percent away from ATH 
- Yield is dropping below 4 now and mortgage rate is crashing 50bps to 6.6 
- Long term bond got the highest record # of bid
- Vix at all time low
- corporate America is giving higher guidance for the whole next year
- active real estate in US MoM inventory is ZERO, this is extremely bullish for stable price action LOL
- 25% of real estate purchases are cash buyers and they keep buying more every month.

Just a month ago, all indicators above signaling a bearish market. not sure why people unhappy

I won’t be happy until I see 2023 rental income similar to 2022, if it is, I’ll build more. 

Even I'm not expecting that more like 5-7% down. Well assuming you mean first half of 22/last half of 2021. I assume we are talkign about STR of course.

More profit is always good but I need to do something with cash. I guess the alternative is you could go into the markets but it's hard not to see the current run up as a bit of a bull trap. But then I'm just honestly comfortable with real estate I know how to not lose money there. Stocks have too much variance and no passive so I just don't care for it - not to mention more write offs with housing.

STR is a whole different conversation, COMPLETLY different everything.

First off, STR is NOT Real Estate Investing, it just is not. STR is as much real estate investing as a car wash is REI, or a McDonalds is REI. STR is micro-HOSPITALITY business. It has vastly different factors to it.

Not to mention the plethora rushing into the segment with little to no clue what the heck there doing, and then making a race to the bottom with prices to try and overcome their ineptness in running a hospitality asset. 

hahaha part of this is Biggerpocket (as a whole) mistake. No wonder John wrote that good post about STR promoters.

I am seeing this clueless fools now pricing there STR down to, I kid you not, $45 per night on say a 3br HOUSE, which I gotta assume it's because there freaking out over seasonal vacancies, thinking "I know, i will just make it cheaper", ugh.... I spoke with one last night, I asked him just who the heck he thought he'd get at $45 a night, and then asked if he has rubber sheets in the place, or maybe wanted to go to a charge by the hour, because that's about who and what he is gonna get.

Yeah, and how many have tried to say my doing STR-Arbitrage is "dumb" because you don't own the property, lol. Well, how many of these who rushed in without a clue, paid based upon STR sky-high rev expectations just to find oh, it actually takes active work to run it, and can't, or suck at it, but great they own this property they can't monetize profitably..... There going to be wishing they listened to me and Arbitraged there start vs purchased.

But know what, when they fail, I bet they will blame the market! It won't be the furnishings from garage sales, nope, no way. Nor the lack of marketing, no way, couldnt be. it will be the markets fault.... Uh-huh, sure it is. 

 It is a day to day operation, but it’s still real estate investment. Can’t be compared to a restaurant. According to the IRS it is real estate, and it can be sold to anyone to live in long term. I think the IRS knows more than you James 

Go ask a bank for a DSCR for a property with intent for STR, I know you never have and have all but 0 experience in STR, because if you actually did have any experience, you would already be well versed in this.

[John Carbone]

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Notice how all the chanting of "crash CRASH" has now shifted hard into reading tea leaves of "it's coming, IT'S COMING..... someday" lol. 

In 2020, somewhere in America, there was a bearded, weary old warn out guy who threw off his sandwich board sign, did a jump for joy, yelling and hooting, grabbing people saying "see, SEE, I TOLD YOU SO, you all laughed at me. year after year, decade after decade, but I KNEW IT, when Nixon got thrown out I KNEW any day those damn ____ were gonna get us with a virus" LMAO. 

Know who sits the sidelines and waits for things to happen, SPECTATORS. How many games you ever seen a spectator win, yup, 0. 

Feel free to lie to yourself how spectating will lead to playing in the game, by all means reduce competition, I appreciate the profits from others non-participation. But don't try to get me to chug your arsenic kool-aid with ya. 

Market appreciates, I got strategies for that. Market stagnates, I got strategies for that. Market drops, I-got-strategies-for-that. I'm a Pro-player, rain or shine, hot or cold, I play the game and score goals regardless of conditions. The conditions are just part of the sport. If you only play on perfect sunny days of temperate temps between _ and _, when humidity is under _, blah blah blah, lol, well hell you might get "A" game of two in before ya die. Good luck with that. 

But I suppose, some truth that if you never play you can never lose right. You can also never win, never get better, never move forward. No thanks, sounds like a miserable life. 

Hey, remember that guy who never risked? Yeah, neither do I, or anyone else. 

 there's huge difference between headline narratives and trendline narratives.

This is BULLISH:
- Dollar is 3 months low
- Dow is 9 percent away from ATH 
- Yield is dropping below 4 now and mortgage rate is crashing 50bps to 6.6 
- Long term bond got the highest record # of bid
- Vix at all time low
- corporate America is giving higher guidance for the whole next year
- active real estate in US MoM inventory is ZERO, this is extremely bullish for stable price action LOL
- 25% of real estate purchases are cash buyers and they keep buying more every month.

Just a month ago, all indicators above signaling a bearish market. not sure why people unhappy

I won’t be happy until I see 2023 rental income similar to 2022, if it is, I’ll build more. 

Even I'm not expecting that more like 5-7% down. Well assuming you mean first half of 22/last half of 2021. I assume we are talkign about STR of course.

More profit is always good but I need to do something with cash. I guess the alternative is you could go into the markets but it's hard not to see the current run up as a bit of a bull trap. But then I'm just honestly comfortable with real estate I know how to not lose money there. Stocks have too much variance and no passive so I just don't care for it - not to mention more write offs with housing.

STR is a whole different conversation, COMPLETLY different everything.

First off, STR is NOT Real Estate Investing, it just is not. STR is as much real estate investing as a car wash is REI, or a McDonalds is REI. STR is micro-HOSPITALITY business. It has vastly different factors to it.

Not to mention the plethora rushing into the segment with little to no clue what the heck there doing, and then making a race to the bottom with prices to try and overcome their ineptness in running a hospitality asset. 

hahaha part of this is Biggerpocket (as a whole) mistake. No wonder John wrote that good post about STR promoters.

I am seeing this clueless fools now pricing there STR down to, I kid you not, $45 per night on say a 3br HOUSE, which I gotta assume it's because there freaking out over seasonal vacancies, thinking "I know, i will just make it cheaper", ugh.... I spoke with one last night, I asked him just who the heck he thought he'd get at $45 a night, and then asked if he has rubber sheets in the place, or maybe wanted to go to a charge by the hour, because that's about who and what he is gonna get.

Yeah, and how many have tried to say my doing STR-Arbitrage is "dumb" because you don't own the property, lol. Well, how many of these who rushed in without a clue, paid based upon STR sky-high rev expectations just to find oh, it actually takes active work to run it, and can't, or suck at it, but great they own this property they can't monetize profitably..... There going to be wishing they listened to me and Arbitraged there start vs purchased.

But know what, when they fail, I bet they will blame the market! It won't be the furnishings from garage sales, nope, no way. Nor the lack of marketing, no way, couldnt be. it will be the markets fault.... Uh-huh, sure it is. 

 It is a day to day operation, but it’s still real estate investment. Can’t be compared to a restaurant. According to the IRS it is real estate, and it can be sold to anyone to live in long term. I think the IRS knows more than you James 

Go ask a bank for a DSCR for a property with intent for STR, I know you never have and have all but 0 experience in STR, because if you actually did have any experience, you would already be well versed in this.

 I closed on two of them last year. What are you talking about?

[James Hamling]

Quote from @Michael Wooldridge:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Notice how all the chanting of "crash CRASH" has now shifted hard into reading tea leaves of "it's coming, IT'S COMING..... someday" lol. 

In 2020, somewhere in America, there was a bearded, weary old warn out guy who threw off his sandwich board sign, did a jump for joy, yelling and hooting, grabbing people saying "see, SEE, I TOLD YOU SO, you all laughed at me. year after year, decade after decade, but I KNEW IT, when Nixon got thrown out I KNEW any day those damn ____ were gonna get us with a virus" LMAO. 

Know who sits the sidelines and waits for things to happen, SPECTATORS. How many games you ever seen a spectator win, yup, 0. 

Feel free to lie to yourself how spectating will lead to playing in the game, by all means reduce competition, I appreciate the profits from others non-participation. But don't try to get me to chug your arsenic kool-aid with ya. 

Market appreciates, I got strategies for that. Market stagnates, I got strategies for that. Market drops, I-got-strategies-for-that. I'm a Pro-player, rain or shine, hot or cold, I play the game and score goals regardless of conditions. The conditions are just part of the sport. If you only play on perfect sunny days of temperate temps between _ and _, when humidity is under _, blah blah blah, lol, well hell you might get "A" game of two in before ya die. Good luck with that. 

But I suppose, some truth that if you never play you can never lose right. You can also never win, never get better, never move forward. No thanks, sounds like a miserable life. 

Hey, remember that guy who never risked? Yeah, neither do I, or anyone else. 

 there's huge difference between headline narratives and trendline narratives.

This is BULLISH:
- Dollar is 3 months low
- Dow is 9 percent away from ATH 
- Yield is dropping below 4 now and mortgage rate is crashing 50bps to 6.6 
- Long term bond got the highest record # of bid
- Vix at all time low
- corporate America is giving higher guidance for the whole next year
- active real estate in US MoM inventory is ZERO, this is extremely bullish for stable price action LOL
- 25% of real estate purchases are cash buyers and they keep buying more every month.

Just a month ago, all indicators above signaling a bearish market. not sure why people unhappy

I won’t be happy until I see 2023 rental income similar to 2022, if it is, I’ll build more. 

Even I'm not expecting that more like 5-7% down. Well assuming you mean first half of 22/last half of 2021. I assume we are talkign about STR of course.

More profit is always good but I need to do something with cash. I guess the alternative is you could go into the markets but it's hard not to see the current run up as a bit of a bull trap. But then I'm just honestly comfortable with real estate I know how to not lose money there. Stocks have too much variance and no passive so I just don't care for it - not to mention more write offs with housing.

STR is a whole different conversation, COMPLETLY different everything.

First off, STR is NOT Real Estate Investing, it just is not. STR is as much real estate investing as a car wash is REI, or a McDonalds is REI. STR is micro-HOSPITALITY business. It has vastly different factors to it.

Not to mention the plethora rushing into the segment with little to no clue what the heck there doing, and then making a race to the bottom with prices to try and overcome their ineptness in running a hospitality asset. 

We have mass flooding of the market in not just offerings but also poorly ran units. There absolutely with 100% certainty will be various "Crashes" in the STR segment, hyper localized in there expression though, and extremely short-ran durations.

And it's a GOOD thing, it's a growing pain, a coming of age for the STR industry and segment. It's the STR gold-rush and just like the Yukon most will go bust for the market to find itself.

I have multiple of both short and traditional. It’s statements like this though that’s put you out in left field. 

If you had said hey STR has attracted people who have no clue what their doing - like the 2006 run up did on flippers - then I would agree. THere are plenty of investors who have proven STR is investing. Hell if nothing else the high end luxury market at $70k - $100k a month for beach front or at nation parks proves it. BUt yeah STR is not investing…. 😂

 Read what I wrote, not how you took it. 

I was very clear that STR is NOT REAL ESTATE Investing, and it's NOT. It is Hospitality Business, and thus, Hospitality Investment.

The word investment is used way too liberally. Real Estate Investment/investing is a specific terminology with a specific meaning, which STR is NOT part of. STR is a Hospitality Business. One can "invest" in a hospitality business, yup, and it has a component of real estate, but it is no more real estate investing then it is furniture investing.

 Ehh I look at it differnetly. There’s the investment portion of the business which you are still investing ina property. And then there is some hospitality. Frankly I farm it out - it’s just easier so that I’m just managing numbers. 

But not so sure why you would throw out the entire investment portion of the property. It’s not like you aren’t look for appreciation even if you are grabbing more cash flow. 

In Real Estate Investing; the real estate itself is "the" investment. The asset is the business. There is the business component of renting out, conveying use of the property, or doing some change to the property to re-sell at profit, but follow that the business is the property itself. 

STR is NOT Real Estate Investing, because while there is a property, the business is not the property itself, it is the Hospitality. The property itself is not leased by people. It is the FURNISHED property, the location, the packaging. I get it, it does seem much like real estate investing but ask yourself this, is Hilton a real estate investor? No, they are a business, just like McDonalds. They sell a service, the service sold is a user experience.

In real estate investing we "sell" a product, not a service. The "buyer" uses the product in connection to other actions. 

Again, STR has a real estate component, but the real estate itself is not the whole, just a part. The real estate is simply where a person provides the service that customers purchase. One can do STR without ownership of the property, one can do STR with a tent, or even just raw land, I have seen these.

Also "investing" is different then "an investment". GM makes "investments" in it's robotic assembly line systems, right, but those are just assets to perform the construct of making there final product of which they sell. The "investment" is a function of the business. In STR the property is similarly just a component of the "production" to make the final product which is a service. Hospitality is a Service industry, not a product industry.

Real Estate Investing is an asset industry, more similar to ownership and trade of stock. 

Think of the operational aspect, STR is an active business operation. It requires a continuous active day-2-day operations.

There is many many aspects to this but end of day it all boils down to the defining difference that STR is NOT Real Estate Investing, it has a component of such, so STR can and most often does incorporate Real Estate Investing but it is, not in and of itself, REI.

Real Estate Investing can utilize STR. But again, each is distinctly separate.

This is a BIG part to the whole calamity in STR many are getting into. Not all, many are great at STR but I assure you all ro near to all of those doing well in STR "get-it" that STR is a Hospitality Business.

Similarly, a 200 unit community in MFH is more then just Real Estate Investing. 

It's a distinction between an active B-2-C business, and a stand alone "investment". 

Maybe more said to say a standard rental is 90% investing and 10% business operation, and STR is 90% business operation and 10% investment. Look at the allocation of actions over say, 5yr span. In STR those actions associated with the real estate is a very tiny portion of the whole. It's a 1 time event/ action and the operating of the asset, it's the everything, right. In a standard rental it's a passive action, setting a user contract and walk away. I know, there is PM but in fundamental PM is an over-sight activity not an active action. There is brief windows of active actions but let's look at say a 3yr lease, over the 3yrs there is maybe 14 days of active actions at most when figuring a standard 8hr day and going by labor hrs of input. Honestly, the ideal window is 8 labor hrs per yr of leasing. yeah, ~$100mnth of PM does not purchase a whole lot of labor hrs. How much is the average service provider in real estate, yeah, around $100 per hr billing rate right.

I get it that this defining line is hard for many to understand or see the distinction of, but this is a major defining line of difference and it's why the BIG impacts of results stand. We have people jumping into STR thinking, incorrectly, it's real estate investing, and then suffering for not comprehending the very active business operation aspect and trying to do it passively.

And on aspect of hiring management, I can buy a restaurant and hire a GM to run everything, it does nto make it Real Estate Investing, it is food service. The real estate is a component, how one acquires the real estate, positioning, it will impact the business BUT end of day it's not the product, what is being done at the site of real estate is the product that dictates profitability. 

In REI, the asset itself dictates profitability. In STR, the service itself dictates profitability, a great property can do poor performance in str disconnected from the property itself.

Picking up what I am putting down? 

 Ehh I I’m picking up your nit picky as hell yes. I get it I just think it’s stupid.

1) if you get into STR and don't relative it can be more active work than a traditional you are an idiot.

2) My traditional is more work than the STR because of the management firms I use. And my traditionals aren't much work.

3) Your argument over real estate investing comes down to degree of work which is frankly a meaningless line. 

Frankly real estate investing is any property you buy used for a long term investment. How you operate that investment whether it's traditional, business, MF, STR is an independent action from the property investment itself. It can add more value to the investment but it's just a business.

your line drawing is beyond odd too me any way you slice it. And I'm not sure how in your mind you justify that because it's traditional are low operations (if you screen well) it somehow is investing but because STR require more it's not a property investment. It's just odd.

 AGAIN, try reading what I ACTUALLY WRITE vs what you THINK it says. There isn't an option on here to write in Crayola so I suppose we will have to leave it at your not capable of comprehending, even at the most exhaustive of attempts and detail. Not to mention a bit hostile over detail..... 

A hotel is NOT real estate investing, it is HOSPITALITY, and yes that's exactly what the IRS says, hospitality is a hospitality business. Ask a CPA or an IRS auditor, or could be like me and have a former IRS Auditor as your CPA. 

[James Hamling]

Quote from @Bobby Larsen:

What are we defining “crash” as?

 I would say we are defining "crash" as "crash". 

If this is something where we can randomly reassign meanings to words, can I please have "Bacon" redefined as "vitamin". 

[John Carbone]

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Notice how all the chanting of "crash CRASH" has now shifted hard into reading tea leaves of "it's coming, IT'S COMING..... someday" lol. 

In 2020, somewhere in America, there was a bearded, weary old warn out guy who threw off his sandwich board sign, did a jump for joy, yelling and hooting, grabbing people saying "see, SEE, I TOLD YOU SO, you all laughed at me. year after year, decade after decade, but I KNEW IT, when Nixon got thrown out I KNEW any day those damn ____ were gonna get us with a virus" LMAO. 

Know who sits the sidelines and waits for things to happen, SPECTATORS. How many games you ever seen a spectator win, yup, 0. 

Feel free to lie to yourself how spectating will lead to playing in the game, by all means reduce competition, I appreciate the profits from others non-participation. But don't try to get me to chug your arsenic kool-aid with ya. 

Market appreciates, I got strategies for that. Market stagnates, I got strategies for that. Market drops, I-got-strategies-for-that. I'm a Pro-player, rain or shine, hot or cold, I play the game and score goals regardless of conditions. The conditions are just part of the sport. If you only play on perfect sunny days of temperate temps between _ and _, when humidity is under _, blah blah blah, lol, well hell you might get "A" game of two in before ya die. Good luck with that. 

But I suppose, some truth that if you never play you can never lose right. You can also never win, never get better, never move forward. No thanks, sounds like a miserable life. 

Hey, remember that guy who never risked? Yeah, neither do I, or anyone else. 

 there's huge difference between headline narratives and trendline narratives.

This is BULLISH:
- Dollar is 3 months low
- Dow is 9 percent away from ATH 
- Yield is dropping below 4 now and mortgage rate is crashing 50bps to 6.6 
- Long term bond got the highest record # of bid
- Vix at all time low
- corporate America is giving higher guidance for the whole next year
- active real estate in US MoM inventory is ZERO, this is extremely bullish for stable price action LOL
- 25% of real estate purchases are cash buyers and they keep buying more every month.

Just a month ago, all indicators above signaling a bearish market. not sure why people unhappy

I won’t be happy until I see 2023 rental income similar to 2022, if it is, I’ll build more. 

Even I'm not expecting that more like 5-7% down. Well assuming you mean first half of 22/last half of 2021. I assume we are talkign about STR of course.

More profit is always good but I need to do something with cash. I guess the alternative is you could go into the markets but it's hard not to see the current run up as a bit of a bull trap. But then I'm just honestly comfortable with real estate I know how to not lose money there. Stocks have too much variance and no passive so I just don't care for it - not to mention more write offs with housing.

STR is a whole different conversation, COMPLETLY different everything.

First off, STR is NOT Real Estate Investing, it just is not. STR is as much real estate investing as a car wash is REI, or a McDonalds is REI. STR is micro-HOSPITALITY business. It has vastly different factors to it.

Not to mention the plethora rushing into the segment with little to no clue what the heck there doing, and then making a race to the bottom with prices to try and overcome their ineptness in running a hospitality asset. 

We have mass flooding of the market in not just offerings but also poorly ran units. There absolutely with 100% certainty will be various "Crashes" in the STR segment, hyper localized in there expression though, and extremely short-ran durations.

And it's a GOOD thing, it's a growing pain, a coming of age for the STR industry and segment. It's the STR gold-rush and just like the Yukon most will go bust for the market to find itself.

I have multiple of both short and traditional. It’s statements like this though that’s put you out in left field. 

If you had said hey STR has attracted people who have no clue what their doing - like the 2006 run up did on flippers - then I would agree. THere are plenty of investors who have proven STR is investing. Hell if nothing else the high end luxury market at $70k - $100k a month for beach front or at nation parks proves it. BUt yeah STR is not investing…. 😂

 Read what I wrote, not how you took it. 

I was very clear that STR is NOT REAL ESTATE Investing, and it's NOT. It is Hospitality Business, and thus, Hospitality Investment.

The word investment is used way too liberally. Real Estate Investment/investing is a specific terminology with a specific meaning, which STR is NOT part of. STR is a Hospitality Business. One can "invest" in a hospitality business, yup, and it has a component of real estate, but it is no more real estate investing then it is furniture investing.

 Ehh I look at it differnetly. There’s the investment portion of the business which you are still investing ina property. And then there is some hospitality. Frankly I farm it out - it’s just easier so that I’m just managing numbers. 

But not so sure why you would throw out the entire investment portion of the property. It’s not like you aren’t look for appreciation even if you are grabbing more cash flow. 

In Real Estate Investing; the real estate itself is "the" investment. The asset is the business. There is the business component of renting out, conveying use of the property, or doing some change to the property to re-sell at profit, but follow that the business is the property itself. 

STR is NOT Real Estate Investing, because while there is a property, the business is not the property itself, it is the Hospitality. The property itself is not leased by people. It is the FURNISHED property, the location, the packaging. I get it, it does seem much like real estate investing but ask yourself this, is Hilton a real estate investor? No, they are a business, just like McDonalds. They sell a service, the service sold is a user experience.

In real estate investing we "sell" a product, not a service. The "buyer" uses the product in connection to other actions. 

Again, STR has a real estate component, but the real estate itself is not the whole, just a part. The real estate is simply where a person provides the service that customers purchase. One can do STR without ownership of the property, one can do STR with a tent, or even just raw land, I have seen these.

Also "investing" is different then "an investment". GM makes "investments" in it's robotic assembly line systems, right, but those are just assets to perform the construct of making there final product of which they sell. The "investment" is a function of the business. In STR the property is similarly just a component of the "production" to make the final product which is a service. Hospitality is a Service industry, not a product industry.

Real Estate Investing is an asset industry, more similar to ownership and trade of stock. 

Think of the operational aspect, STR is an active business operation. It requires a continuous active day-2-day operations.

There is many many aspects to this but end of day it all boils down to the defining difference that STR is NOT Real Estate Investing, it has a component of such, so STR can and most often does incorporate Real Estate Investing but it is, not in and of itself, REI.

Real Estate Investing can utilize STR. But again, each is distinctly separate.

This is a BIG part to the whole calamity in STR many are getting into. Not all, many are great at STR but I assure you all ro near to all of those doing well in STR "get-it" that STR is a Hospitality Business.

Similarly, a 200 unit community in MFH is more then just Real Estate Investing. 

It's a distinction between an active B-2-C business, and a stand alone "investment". 

Maybe more said to say a standard rental is 90% investing and 10% business operation, and STR is 90% business operation and 10% investment. Look at the allocation of actions over say, 5yr span. In STR those actions associated with the real estate is a very tiny portion of the whole. It's a 1 time event/ action and the operating of the asset, it's the everything, right. In a standard rental it's a passive action, setting a user contract and walk away. I know, there is PM but in fundamental PM is an over-sight activity not an active action. There is brief windows of active actions but let's look at say a 3yr lease, over the 3yrs there is maybe 14 days of active actions at most when figuring a standard 8hr day and going by labor hrs of input. Honestly, the ideal window is 8 labor hrs per yr of leasing. yeah, ~$100mnth of PM does not purchase a whole lot of labor hrs. How much is the average service provider in real estate, yeah, around $100 per hr billing rate right.

I get it that this defining line is hard for many to understand or see the distinction of, but this is a major defining line of difference and it's why the BIG impacts of results stand. We have people jumping into STR thinking, incorrectly, it's real estate investing, and then suffering for not comprehending the very active business operation aspect and trying to do it passively.

And on aspect of hiring management, I can buy a restaurant and hire a GM to run everything, it does nto make it Real Estate Investing, it is food service. The real estate is a component, how one acquires the real estate, positioning, it will impact the business BUT end of day it's not the product, what is being done at the site of real estate is the product that dictates profitability. 

In REI, the asset itself dictates profitability. In STR, the service itself dictates profitability, a great property can do poor performance in str disconnected from the property itself.

Picking up what I am putting down? 

 Ehh I I’m picking up your nit picky as hell yes. I get it I just think it’s stupid.

1) if you get into STR and don't relative it can be more active work than a traditional you are an idiot.

2) My traditional is more work than the STR because of the management firms I use. And my traditionals aren't much work.

3) Your argument over real estate investing comes down to degree of work which is frankly a meaningless line. 

Frankly real estate investing is any property you buy used for a long term investment. How you operate that investment whether it's traditional, business, MF, STR is an independent action from the property investment itself. It can add more value to the investment but it's just a business.

your line drawing is beyond odd too me any way you slice it. And I'm not sure how in your mind you justify that because it's traditional are low operations (if you screen well) it somehow is investing but because STR require more it's not a property investment. It's just odd.

 AGAIN, try reading what I ACTUALLY WRITE vs what you THINK it says. There isn't an option on here to write in Crayola so I suppose we will have to leave it at your not capable of comprehending, even at the most exhaustive of attempts and detail. Not to mention a bit hostile over detail..... 

A hotel is NOT real estate investing, it is HOSPITALITY, and yes that's exactly what the IRS says, hospitality is a hospitality business. Ask a CPA or an IRS auditor, or could be like me and have a former IRS Auditor as your CPA. 

A hotel generally speaking provides substantial services to qualify as that. Just doing a STR without providing substantial services is classified differently (ie residential real estate). I know you are not well versed in STR, but don't try to tell people who are on here how it works. Stick to your 2-3 bed LTR in your market. You are right though that a lot of people have gotten in over their heads in STR.

[James Hamling]

Quote from @Carl Fischer:

@Greg R.

The economy is being reset. The minimum wage is now $15/hour. Almost everything has increased/inflated in price. Some inflation is caused by an excess of money(PPP, EIDL, build back better) and some from supply chain issues creating shortages.

The correction/crash cycle will be less severe as a result but will occur. As always some locations will be better and some worse

than others. Real estate is local not national.

 I'm not sure reset is the correct word to use as that intones a sense of a return to a previous state, and this is no return to any previous state, it is a redefining action, a rewriting of the state of things. 

At this time the Fed is "testing" a new currency means (digital dollar). There is whisperings coming out of potential "deal" in the works of a kind of merger between the US Treasury Dept and the Fed, forming a new kind of "Treasury Reserve", or what I would coin a "super" Fed. 

I think one has to throw out the old book and graphs on things because fact is, this is a very different world. Heck, when is the last time the Fed Gov. paid the populous on mass as it had, never. The New Norm is "New Norms". 

[John Carbone]

Quote from @James Hamling:

Quote from @Carl Fischer:

@Greg R.

The economy is being reset. The minimum wage is now $15/hour. Almost everything has increased/inflated in price. Some inflation is caused by an excess of money(PPP, EIDL, build back better) and some from supply chain issues creating shortages.

The correction/crash cycle will be less severe as a result but will occur. As always some locations will be better and some worse

than others. Real estate is local not national.

 I'm not sure reset is the correct word to use as that intones a sense of a return to a previous state, and this is no return to any previous state, it is a redefining action, a rewriting of the state of things. 

At this time the Fed is "testing" a new currency means (digital dollar). There is whisperings coming out of potential "deal" in the works of a kind of merger between the US Treasury Dept and the Fed, forming a new kind of "Treasury Reserve", or what I would coin a "super" Fed. 

I think one has to throw out the old book and graphs on things because fact is, this is a very different world. Heck, when is the last time the Fed Gov. paid the populous on mass as it had, never. The New Norm is "New Norms". 

You have no idea what you are talking about. They are testing the digital dollar as a means to settle transactions much faster and cheaper than  the current system allows. Stop floating ridiculous conspiracy theories out here. Once housing drops 20 percent, I’ll be expecting to see the alien invasion shortly after. 

[Marcus Auerbach]

Not a single professional researcher is expecting a crash. Forecasts range from +3% to -5% for next year (HPES is most optimistic, Zelman is most pessimistic), pretty much everyone expects prices to be positive in 2024.

A recession does not cause home prices to crash, just to to FRED and pull up the charts. Even in 2008, which is what everyone is referring to, it was not the recession that caused home prices to drop, it was an insane amount of excess inventory, subprime mortgage defaults and a resulting wave of foreclosures, which eventually caused a recession. Not the other way around.

In the end it comes down to supply and demand, or even more basic the number of roofs vs the number of people. And that does not change, unless we find half a million vacant homes somewhere or kill 20% or the population. Everything else is just noise.

The metric to watch now is CPI, which will drive FED policy and the 10 year treasury, which will drive mortgage rates. And if (big IF) rates drop under under 6% or possibly under 5% we will see quite the opposite of a crash.

The other thing is that real estate is becoming very regional, there is no US market anymore. The median home price in the US is $403,000, some markets are double and we in Milwaukee are at almost half of that. Expensive markets feel the impacts of rates much more than lower priced markets. And money always flows from high to low (where is can buy more). Combine that with remote work we will see a lot of migration in the next years.

[Nicholas L.]

@Marcus Auerbach

agree and great post.  different measurements and different markets have been cited in this thread, of course, as you might expect... Cleveland vs. Austin, month over month vs YoY, list price vs. sale price, etc.  

some folks have pointed to big drops in list prices in properties in expensive markets... this doesn't help me in Pittsburgh, or you in Milwaukee... and that list price is always way above what the property last sold for 10 years ago.

so, maybe some sub-market somewhere in CA will see a 20% drop in some metric... but I'm with you, I just do not see the median house price in the US falling by that much.  

i do grant that we are in a very odd situation - high prices, high interest rates, builders slowing down... and everything being built around me is 2-6x the median price for the metro.  that's a lot of pressure on new primary buyers... which those of us in this thread are not...

[Carlos Ptriawan]

Quote from @Nicholas L.:

@Marcus Auerbach

agree and great post.  different measurements and different markets have been cited in this thread, of course, as you might expect... Cleveland vs. Austin, month over month vs YoY, list price vs. sale price, etc.  

some folks have pointed to big drops in list prices in properties in expensive markets... this doesn't help me in Pittsburgh, or you in Milwaukee... and that list price is always way above what the property last sold for 10 years ago.

so, maybe some sub-market somewhere in CA will see a 20% drop in some metric... but I'm with you, I just do not see the median house price in the US falling by that much.  

i do grant that we are in a very odd situation - high prices, high interest rates, builders slowing down... and everything being built around me is 2-6x the median price for the metro.  that's a lot of pressure on new primary buyers... which those of us in this thread are not...

 We already talked about this like from few months ago. Been telling all these crash narratives are coming because of statistical errors.

It's true there's a crash that seems affecting the whole real estate, while in reality, 30-35% price crash did occur, but only happened in certain zip code in CA for the price above 2 mil with 5 BR, other than that it's actually just zero growth market in CA.

[Carlos Ptriawan]

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Notice how all the chanting of "crash CRASH" has now shifted hard into reading tea leaves of "it's coming, IT'S COMING..... someday" lol. 

In 2020, somewhere in America, there was a bearded, weary old warn out guy who threw off his sandwich board sign, did a jump for joy, yelling and hooting, grabbing people saying "see, SEE, I TOLD YOU SO, you all laughed at me. year after year, decade after decade, but I KNEW IT, when Nixon got thrown out I KNEW any day those damn ____ were gonna get us with a virus" LMAO. 

Know who sits the sidelines and waits for things to happen, SPECTATORS. How many games you ever seen a spectator win, yup, 0. 

Feel free to lie to yourself how spectating will lead to playing in the game, by all means reduce competition, I appreciate the profits from others non-participation. But don't try to get me to chug your arsenic kool-aid with ya. 

Market appreciates, I got strategies for that. Market stagnates, I got strategies for that. Market drops, I-got-strategies-for-that. I'm a Pro-player, rain or shine, hot or cold, I play the game and score goals regardless of conditions. The conditions are just part of the sport. If you only play on perfect sunny days of temperate temps between _ and _, when humidity is under _, blah blah blah, lol, well hell you might get "A" game of two in before ya die. Good luck with that. 

But I suppose, some truth that if you never play you can never lose right. You can also never win, never get better, never move forward. No thanks, sounds like a miserable life. 

Hey, remember that guy who never risked? Yeah, neither do I, or anyone else. 

 there's huge difference between headline narratives and trendline narratives.

This is BULLISH:
- Dollar is 3 months low
- Dow is 9 percent away from ATH 
- Yield is dropping below 4 now and mortgage rate is crashing 50bps to 6.6 
- Long term bond got the highest record # of bid
- Vix at all time low
- corporate America is giving higher guidance for the whole next year
- active real estate in US MoM inventory is ZERO, this is extremely bullish for stable price action LOL
- 25% of real estate purchases are cash buyers and they keep buying more every month.

Just a month ago, all indicators above signaling a bearish market. not sure why people unhappy

I won’t be happy until I see 2023 rental income similar to 2022, if it is, I’ll build more. 

Even I'm not expecting that more like 5-7% down. Well assuming you mean first half of 22/last half of 2021. I assume we are talkign about STR of course.

More profit is always good but I need to do something with cash. I guess the alternative is you could go into the markets but it's hard not to see the current run up as a bit of a bull trap. But then I'm just honestly comfortable with real estate I know how to not lose money there. Stocks have too much variance and no passive so I just don't care for it - not to mention more write offs with housing.

STR is a whole different conversation, COMPLETLY different everything.

First off, STR is NOT Real Estate Investing, it just is not. STR is as much real estate investing as a car wash is REI, or a McDonalds is REI. STR is micro-HOSPITALITY business. It has vastly different factors to it.

Not to mention the plethora rushing into the segment with little to no clue what the heck there doing, and then making a race to the bottom with prices to try and overcome their ineptness in running a hospitality asset. 

We have mass flooding of the market in not just offerings but also poorly ran units. There absolutely with 100% certainty will be various "Crashes" in the STR segment, hyper localized in there expression though, and extremely short-ran durations.

And it's a GOOD thing, it's a growing pain, a coming of age for the STR industry and segment. It's the STR gold-rush and just like the Yukon most will go bust for the market to find itself.

I have multiple of both short and traditional. It’s statements like this though that’s put you out in left field. 

If you had said hey STR has attracted people who have no clue what their doing - like the 2006 run up did on flippers - then I would agree. THere are plenty of investors who have proven STR is investing. Hell if nothing else the high end luxury market at $70k - $100k a month for beach front or at nation parks proves it. BUt yeah STR is not investing…. 😂

 Read what I wrote, not how you took it. 

I was very clear that STR is NOT REAL ESTATE Investing, and it's NOT. It is Hospitality Business, and thus, Hospitality Investment.

The word investment is used way too liberally. Real Estate Investment/investing is a specific terminology with a specific meaning, which STR is NOT part of. STR is a Hospitality Business. One can "invest" in a hospitality business, yup, and it has a component of real estate, but it is no more real estate investing then it is furniture investing.

 Ehh I look at it differnetly. There’s the investment portion of the business which you are still investing ina property. And then there is some hospitality. Frankly I farm it out - it’s just easier so that I’m just managing numbers. 

But not so sure why you would throw out the entire investment portion of the property. It’s not like you aren’t look for appreciation even if you are grabbing more cash flow. 

In Real Estate Investing; the real estate itself is "the" investment. The asset is the business. There is the business component of renting out, conveying use of the property, or doing some change to the property to re-sell at profit, but follow that the business is the property itself. 

STR is NOT Real Estate Investing, because while there is a property, the business is not the property itself, it is the Hospitality. The property itself is not leased by people. It is the FURNISHED property, the location, the packaging. I get it, it does seem much like real estate investing but ask yourself this, is Hilton a real estate investor? No, they are a business, just like McDonalds. They sell a service, the service sold is a user experience.

In real estate investing we "sell" a product, not a service. The "buyer" uses the product in connection to other actions. 

Again, STR has a real estate component, but the real estate itself is not the whole, just a part. The real estate is simply where a person provides the service that customers purchase. One can do STR without ownership of the property, one can do STR with a tent, or even just raw land, I have seen these.

Also "investing" is different then "an investment". GM makes "investments" in it's robotic assembly line systems, right, but those are just assets to perform the construct of making there final product of which they sell. The "investment" is a function of the business. In STR the property is similarly just a component of the "production" to make the final product which is a service. Hospitality is a Service industry, not a product industry.

Real Estate Investing is an asset industry, more similar to ownership and trade of stock. 

Think of the operational aspect, STR is an active business operation. It requires a continuous active day-2-day operations.

There is many many aspects to this but end of day it all boils down to the defining difference that STR is NOT Real Estate Investing, it has a component of such, so STR can and most often does incorporate Real Estate Investing but it is, not in and of itself, REI.

Real Estate Investing can utilize STR. But again, each is distinctly separate.

This is a BIG part to the whole calamity in STR many are getting into. Not all, many are great at STR but I assure you all ro near to all of those doing well in STR "get-it" that STR is a Hospitality Business.

Similarly, a 200 unit community in MFH is more then just Real Estate Investing. 

It's a distinction between an active B-2-C business, and a stand alone "investment". 

Maybe more said to say a standard rental is 90% investing and 10% business operation, and STR is 90% business operation and 10% investment. Look at the allocation of actions over say, 5yr span. In STR those actions associated with the real estate is a very tiny portion of the whole. It's a 1 time event/ action and the operating of the asset, it's the everything, right. In a standard rental it's a passive action, setting a user contract and walk away. I know, there is PM but in fundamental PM is an over-sight activity not an active action. There is brief windows of active actions but let's look at say a 3yr lease, over the 3yrs there is maybe 14 days of active actions at most when figuring a standard 8hr day and going by labor hrs of input. Honestly, the ideal window is 8 labor hrs per yr of leasing. yeah, ~$100mnth of PM does not purchase a whole lot of labor hrs. How much is the average service provider in real estate, yeah, around $100 per hr billing rate right.

I get it that this defining line is hard for many to understand or see the distinction of, but this is a major defining line of difference and it's why the BIG impacts of results stand. We have people jumping into STR thinking, incorrectly, it's real estate investing, and then suffering for not comprehending the very active business operation aspect and trying to do it passively.

And on aspect of hiring management, I can buy a restaurant and hire a GM to run everything, it does nto make it Real Estate Investing, it is food service. The real estate is a component, how one acquires the real estate, positioning, it will impact the business BUT end of day it's not the product, what is being done at the site of real estate is the product that dictates profitability. 

In REI, the asset itself dictates profitability. In STR, the service itself dictates profitability, a great property can do poor performance in str disconnected from the property itself.

Picking up what I am putting down? 

 Ehh I I’m picking up your nit picky as hell yes. I get it I just think it’s stupid.

1) if you get into STR and don't relative it can be more active work than a traditional you are an idiot.

2) My traditional is more work than the STR because of the management firms I use. And my traditionals aren't much work.

3) Your argument over real estate investing comes down to degree of work which is frankly a meaningless line. 

Frankly real estate investing is any property you buy used for a long term investment. How you operate that investment whether it's traditional, business, MF, STR is an independent action from the property investment itself. It can add more value to the investment but it's just a business.

your line drawing is beyond odd too me any way you slice it. And I'm not sure how in your mind you justify that because it's traditional are low operations (if you screen well) it somehow is investing but because STR require more it's not a property investment. It's just odd.

 AGAIN, try reading what I ACTUALLY WRITE vs what you THINK it says. There isn't an option on here to write in Crayola so I suppose we will have to leave it at your not capable of comprehending, even at the most exhaustive of attempts and detail. Not to mention a bit hostile over detail..... 

A hotel is NOT real estate investing, it is HOSPITALITY, and yes that's exactly what the IRS says, hospitality is a hospitality business. Ask a CPA or an IRS auditor, or could be like me and have a former IRS Auditor as your CPA. 

A hotel generally speaking provides substantial services to qualify as that. Just doing a STR without providing substantial services is classified differently (ie residential real estate). I know you are not well versed in STR, but don't try to tell people who are on here how it works. Stick to your 2-3 bed LTR in your market. You are right though that a lot of people have gotten in over their heads in STR.

In STR world the big difference is the feedback because the guest is expecting a 'higher quality stay'. It's totally 95% hospitability service.

[Jay Hinrichs]

Quote from @Marcus Auerbach:

Not a single professional researcher is expecting a crash. Forecasts range from +3% to -5% for next year (HPES is most optimistic, Zelman is most pessimistic), pretty much everyone expects prices to be positive in 2024.

A recession does not cause home prices to crash, just to to FRED and pull up the charts. Even in 2008, which is what everyone is referring to, it was not the recession that caused home prices to drop, it was an insane amount of excess inventory, subprime mortgage defaults and a resulting wave of foreclosures, which eventually caused a recession. Not the other way around.

In the end it comes down to supply and demand, or even more basic the number of roofs vs the number of people. And that does not change, unless we find half a million vacant homes somewhere or kill 20% or the population. Everything else is just noise.

The metric to watch now is CPI, which will drive FED policy and the 10 year treasury, which will drive mortgage rates. And if (big IF) rates drop under under 6% or possibly under 5% we will see quite the opposite of a crash.

The other thing is that real estate is becoming very regional, there is no US market anymore. The median home price in the US is $403,000, some markets are double and we in Milwaukee are at almost half of that. Expensive markets feel the impacts of rates much more than lower priced markets. And money always flows from high to low (where is can buy more). Combine that with remote work we will see a lot of migration in the next years.

The other point of the 08 crash was the major banks stopped lending on investment properties.. U take financing out of a segment of the market and you are now cash and carry prices plummeted in many areas as we all know.  this time around while rates have risen the market is still active you can get a loan if you qualify that's why we are still seeing lots of transactions..  What I see in this age is the U tube guru's keep pounding on 50% price drops the civilians believe it and they are just sitting and waiting for that to happen.. we are seeing that attitude out here in Oregon but we have also sold properties for all time highs in the last 90 days and I just sold my 1.5 mil spec and had to take a whopping discount of 50K :)  which for a cash buyer like this I probably would have done even in the best of times.  However these folks did low ball to start and the buyer is a commercial broker so very savvy.

We started talking about his bizz at the walk through and he thinks there is going to be deals in 2023 for commercial as sellers were stuck on 4 to 5 cap but that does not work with 6 to 6.5 % interest so he thinks caps will come up to match or exceed interest rates or properties just wont trade.  He also mentioned that the sellers that have owned for years will come around and re price.. someone that bought 3 to 5 years ago for a 4 cap will be somewhat stuck.

[Carlos Ptriawan]

Quote from @Jay Hinrichs:

Quote from @Marcus Auerbach:

Not a single professional researcher is expecting a crash. Forecasts range from +3% to -5% for next year (HPES is most optimistic, Zelman is most pessimistic), pretty much everyone expects prices to be positive in 2024.

A recession does not cause home prices to crash, just to to FRED and pull up the charts. Even in 2008, which is what everyone is referring to, it was not the recession that caused home prices to drop, it was an insane amount of excess inventory, subprime mortgage defaults and a resulting wave of foreclosures, which eventually caused a recession. Not the other way around.

In the end it comes down to supply and demand, or even more basic the number of roofs vs the number of people. And that does not change, unless we find half a million vacant homes somewhere or kill 20% or the population. Everything else is just noise.

The metric to watch now is CPI, which will drive FED policy and the 10 year treasury, which will drive mortgage rates. And if (big IF) rates drop under under 6% or possibly under 5% we will see quite the opposite of a crash.

The other thing is that real estate is becoming very regional, there is no US market anymore. The median home price in the US is $403,000, some markets are double and we in Milwaukee are at almost half of that. Expensive markets feel the impacts of rates much more than lower priced markets. And money always flows from high to low (where is can buy more). Combine that with remote work we will see a lot of migration in the next years.

The other point of the 08 crash was the major banks stopped lending on investment properties.. U take financing out of a segment of the market and you are now cash and carry prices plummeted in many areas as we all know.  this time around while rates have risen the market is still active you can get a loan if you qualify that's why we are still seeing lots of transactions..  What I see in this age is the U tube guru's keep pounding on 50% price drops the civilians believe it and they are just sitting and waiting for that to happen.. we are seeing that attitude out here in Oregon but we have also sold properties for all time highs in the last 90 days and I just sold my 1.5 mil spec and had to take a whopping discount of 50K :)  which for a cash buyer like this I probably would have done even in the best of times.  However these folks did low ball to start and the buyer is a commercial broker so very savvy.

We started talking about his bizz at the walk through and he thinks there is going to be deals in 2023 for commercial as sellers were stuck on 4 to 5 cap but that does not work with 6 to 6.5 % interest so he thinks caps will come up to match or exceed interest rates or properties just wont trade.  He also mentioned that the sellers that have owned for years will come around and re price.. someone that bought 3 to 5 years ago for a 4 cap will be somewhat stuck.

- Don't you think we have the same problem now ? the bank is very hesitant to loan money to CRE.
- So it seems CRE pro is expecting a mini crash from GP syndicator that's being forced to exit next year ? Overall do you expect stable residential and perhaps a mini crash in syndication when GP can't exit? What do you think will happen in CRE segment?

[Jay Hinrichs]

Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

Quote from @Marcus Auerbach:

Not a single professional researcher is expecting a crash. Forecasts range from +3% to -5% for next year (HPES is most optimistic, Zelman is most pessimistic), pretty much everyone expects prices to be positive in 2024.

A recession does not cause home prices to crash, just to to FRED and pull up the charts. Even in 2008, which is what everyone is referring to, it was not the recession that caused home prices to drop, it was an insane amount of excess inventory, subprime mortgage defaults and a resulting wave of foreclosures, which eventually caused a recession. Not the other way around.

In the end it comes down to supply and demand, or even more basic the number of roofs vs the number of people. And that does not change, unless we find half a million vacant homes somewhere or kill 20% or the population. Everything else is just noise.

The metric to watch now is CPI, which will drive FED policy and the 10 year treasury, which will drive mortgage rates. And if (big IF) rates drop under under 6% or possibly under 5% we will see quite the opposite of a crash.

The other thing is that real estate is becoming very regional, there is no US market anymore. The median home price in the US is $403,000, some markets are double and we in Milwaukee are at almost half of that. Expensive markets feel the impacts of rates much more than lower priced markets. And money always flows from high to low (where is can buy more). Combine that with remote work we will see a lot of migration in the next years.

The other point of the 08 crash was the major banks stopped lending on investment properties.. U take financing out of a segment of the market and you are now cash and carry prices plummeted in many areas as we all know.  this time around while rates have risen the market is still active you can get a loan if you qualify that's why we are still seeing lots of transactions..  What I see in this age is the U tube guru's keep pounding on 50% price drops the civilians believe it and they are just sitting and waiting for that to happen.. we are seeing that attitude out here in Oregon but we have also sold properties for all time highs in the last 90 days and I just sold my 1.5 mil spec and had to take a whopping discount of 50K :)  which for a cash buyer like this I probably would have done even in the best of times.  However these folks did low ball to start and the buyer is a commercial broker so very savvy.

We started talking about his bizz at the walk through and he thinks there is going to be deals in 2023 for commercial as sellers were stuck on 4 to 5 cap but that does not work with 6 to 6.5 % interest so he thinks caps will come up to match or exceed interest rates or properties just wont trade.  He also mentioned that the sellers that have owned for years will come around and re price.. someone that bought 3 to 5 years ago for a 4 cap will be somewhat stuck.

- Don't you think we have the same problem now ? the bank is very hesitant to loan money to CRE.
- So it seems CRE pro is expecting a mini crash from GP syndicator that's being forced to exit next year ? Overall do you expect stable residential and perhaps a mini crash in syndication when GP can't exit? What do you think will happen in CRE segment?

I don't know my commercial banks are still doing deals they just have to meet the DSCR and borrower has to qualify.  what this is doing though is with rates at 6 and up is buyers either need much larger down payments for that 5 cap deal which then in turn makes return look not so great.  ON the syndication side I would think there will be a lot of renegotiating if a syndication finds themself in a pinch and the deals will extend out longer than what was anticipated when the deals were put together. Of course it depends what investor owns their debt.  Not really an area of my expertise by any means.

08 09 saw country wide fold  Wells stopped making investor loans  B of A stopped making investor loans  WAMU folded etc etc this was like the nail in the coffin and added to already stressed out market.  I know for me personally 4 out of my 5 guidance lines were called thereby putting my HML company basically out of business. Went from 25 employees to 4..

Just like all these BP investors who are thinking they will rely on Heloc's to buy up distressed assets.. Helocs are the first to go either stopped or frozen. IF it gets BAD  which right now we have not hit that point.

So back then when there were no investor loans it was truly cash .  And while some investors have cash so many need loans to buy.  Thats why the Aussies came in and scooped up so much real estate they were cash buyers.. they were borrowing against their equity and the exchange rate was highest ever for them and they paid cash and if they did not get pushed into the hood they did very well.

[Carlos Ptriawan]

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

So back then when there were no investor loans it was truly cash .  And while some investors have cash so many need loans to buy.  Thats why the Aussies came in and scooped up so much real estate they were cash buyers.. they were borrowing against their equity and the exchange rate was highest ever for them and they paid cash and if they did not get pushed into the hood they did very well.

yea I started noticing the biggest player in CRE industry is adapted to a Cash strategy now, like JLL for their 721 DST is purchasing shopping complexes with cash raised from 1031 investors.

[James Hamling]

Quote from @Marcus Auerbach:

Not a single professional researcher is expecting a crash. Forecasts range from +3% to -5% for next year (HPES is most optimistic, Zelman is most pessimistic), pretty much everyone expects prices to be positive in 2024.

A recession does not cause home prices to crash, just to to FRED and pull up the charts. Even in 2008, which is what everyone is referring to, it was not the recession that caused home prices to drop, it was an insane amount of excess inventory, subprime mortgage defaults and a resulting wave of foreclosures, which eventually caused a recession. Not the other way around.

In the end it comes down to supply and demand, or even more basic the number of roofs vs the number of people. And that does not change, unless we find half a million vacant homes somewhere or kill 20% or the population. Everything else is just noise.

The metric to watch now is CPI, which will drive FED policy and the 10 year treasury, which will drive mortgage rates. And if (big IF) rates drop under under 6% or possibly under 5% we will see quite the opposite of a crash.

The other thing is that real estate is becoming very regional, there is no US market anymore. The median home price in the US is $403,000, some markets are double and we in Milwaukee are at almost half of that. Expensive markets feel the impacts of rates much more than lower priced markets. And money always flows from high to low (where is can buy more). Combine that with remote work we will see a lot of migration in the next years.

So I sat down with my team and said, ok, let's reverse engineer this, because of the BS media-4-sale fear-porn-4-profit YT's keep pressing FALSE narratives and truth and facts are just not very "sexy", so i said let's game-this-out to find what it would take to induce a crash in real estate for sure.

So by the numbers we found what we call the "Thanos Snap Scenario" lol. That if you could "Thanos Snap" 3.2 Million people in the U.S. out of existence tomorrow, that's what it would take to introduce some potential issues. BUT even then, no certainty of crash, because of absorption rate. And, current unemployment rate would mean UI would drop to under 1, pressing wages up, pressing more into purchase positions. 

So I said to the math nerds, crank up that volume, come on, find the pain, wheres it break. Lol, it got nuts. We found by the #'s it would have to be something on level of like 22+ million people, lol. Because as one removes persons, it also presses up income rates etc growing buyer base, and on and on in a feed back loop. 

Point is, we are in massive net unit SHORTAGE, with VERY tight employment market. This is why despite the rate more then doubling for mortgages, the market is holding strong.    Ok, I know, the doom-crowd is gonna cry about areas with a step back in sales/ pricing. (A) ever heard of winter market? It's done similar for a few decades, on que. (b) rates more then DOUBLED, that's a MASSIVE change and the adjustment in those markets most hit today is nowhere near the same massive change level that rates were. Think about it, in many cases were talking a 100%+ change in mortgage finance rates, and market showing at worst a what, nearly 15% change? Yeah, I DO call that a resilient market. It's like a Prius getting hit by a train and the bumper falls off, yeah, I call that damn good. I wouldn't say it's the end of the world because a bumper fell off. 

And the idgots saying "crash", GOOGLE THE WORD for Pete's sake, you've already been proven WRONG, it didn't happen, hasn't happened, and calling price changes over many months a "crash" only shows how clueless you are because you don't even know what a "crash" is. 

The home price movement we see at this time would be defined, by the book, as CONSOLIDATION. 

Crash does not follow consolidation. 

FYI, this time last year many were projecting that '22' market would be flat for appreciation, or a -5%. Guess what, double digit appreciation. I DON'T forecast a double digit appreciation in '23', I forecast a "normal" level of around 5%, with a return of NORMAL seasonal consolidations, and localized mico-market corrections. For example, more leaving the homeless camp we call California, a continued net export of CA wealth. Sure, plenty will remain in CA, in large part those without financial means to leave. And thus, the median financial factors in CA dropping like a stone, and those property values returning to utilitarian factors vs perceptual they have enjoyed so long. There will be the malibu's of the world but I shouldn't have to define all this, CA is a bubble itself, in so many ways. 

This may be a bit out there of a prediction, let's call it my "Thesis", but I think we are seeing the birth of the MidWest dominance. 

[Chris John]

@James Hamling

"This may be a bit out there of a prediction, let's call it my "Thesis",
but I think we are seeing the birth of the MidWest dominance."

I've seen quite a few things in my lifetime that I NEVER thought I'd see, but this one would be up towards the top, for sure.  I mean, are you saying that people will flood out of California, Texas, and Florida and head to Cleveland or something?

[John Carbone]

Quote from @Chris John:

@James Hamling

"This may be a bit out there of a prediction, let's call it my "Thesis",
but I think we are seeing the birth of the MidWest dominance."

I've seen quite a few things in my lifetime that I NEVER thought I'd see, but this one would be up towards the top, for sure.  I mean, are you saying that people will flood out of California, Texas, and Florida and head to Cleveland or something?

 Or fleeing to Minneapolis where the state has income tax of 9 percent and you can’t go outside 6 months a year 😂 

[Carlos Ptriawan]

Quote from @Chris John:

@James Hamling

"This may be a bit out there of a prediction, let's call it my "Thesis",
but I think we are seeing the birth of the MidWest dominance."

I've seen quite a few things in my lifetime that I NEVER thought I'd see, but this one would be up towards the top, for sure.  I mean, are you saying that people will flood out of California, Texas, and Florida and head to Cleveland or something?

 people and job is leaving midwest too lol

[Carlos Ptriawan]

I guess this is the key, what we see is a consolidation and I never see a crash after consolidation because in the consolidation market usually, we have balanced liquidity where # of buyer is equal to # of seller.