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. 

[Bruce Woodruff]

Quote from @Greg R.:

This is my thought as well.....standing by. I will not be paying cash as I used to, but pulling equity out of existing properties. Will ReFi when things cool off.

[Michael Wooldridge]

Quote from @Bruce Woodruff:

Quote from @Greg R.:

This is my thought as well.....standing by. I will not be paying cash as I used to, but pulling equity out of existing properties. Will ReFi when things cool off.

 Ehhh I agree on waiting unless a deal pops. But you used to pay cash when rates were low and now that they are high you want to use loans (even if it’s a heloc) really? Why? 

[Bruce Woodruff]

Quote from @Michael Wooldridge:

Quote from @Bruce Woodruff:

Quote from @Greg R.:

This is my thought as well.....standing by. I will not be paying cash as I used to, but pulling equity out of existing properties. Will ReFi when things cool off.

 Ehhh I agree on waiting unless a deal pops. But you used to pay cash when rates were low and now that they are high you want to use loans (even if it’s a heloc) really? Why? 

Because then I had plenty of cash, and now it's wrapped up in properties. Besides no point in having only free-and-clear properties right? Too much $$ lying around doing nothing...increases your liability risk profile too....

Do you disagree?

[Michael Wooldridge]

Quote from @Bruce Woodruff:

Quote from @Michael Wooldridge:

Quote from @Bruce Woodruff:

Quote from @Greg R.:

This is my thought as well.....standing by. I will not be paying cash as I used to, but pulling equity out of existing properties. Will ReFi when things cool off.

 Ehhh I agree on waiting unless a deal pops. But you used to pay cash when rates were low and now that they are high you want to use loans (even if it’s a heloc) really? Why? 

Because then I had plenty of cash, and now it's wrapped up in properties. Besides no point in having only free-and-clear properties right? Too much $$ lying around doing nothing...increases your liability risk profile too....

Do you disagree?

 Was curious the comment is interesting. I’m not somebody that believes full leverage is a good path even if it’s likely the most profitable. I paid off my first rental at 32 because it allowed me to have a mortgage that was nothing on the primary. Later rentals I’m leveraging somewhere between 75-40% depending on the class. so by no means am I full leverage.

Just wanted to ask since a lot of folks are reading this thread at this point and the trend could be interesting for some :) 

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Bruce Woodruff:

Quote from @Michael Wooldridge:

Quote from @Bruce Woodruff:

Quote from @Greg R.:

 Was curious the comment is interesting. I’m not somebody that believes full leverage is a good path even if it’s likely the most profitable. I paid off my first rental at 32 because it allowed me to have a mortgage that was nothing on the primary. Later rentals I’m leveraging somewhere between 75-40% depending on the class. so by no means am I full leverage.

Just wanted to ask since a lot of folks are reading this thread at this point and the trend could be interesting for some :) 

yes very interesting. Nine months from now chatter in this thread would realize their wishful thinking..... or not :-) 

I really like to see Greg comment nine months from now :)

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Bruce Woodruff:

Quote from @Greg R.:

This is my thought as well.....standing by. I will not be paying cash as I used to, but pulling equity out of existing properties. Will ReFi when things cool off.

 Ehhh I agree on waiting unless a deal pops. But you used to pay cash when rates were low and now that they are high you want to use loans (even if it’s a heloc) really? Why? 

 I guess a real estate guy like us is okay/acceptable even if we leverage 1:4 with 7% interest rate (using heloc).

This guy SBF is leveraging 1:125 for fake crypto scheme using 60 billion customer account money. LOL

Amazing we've two worlds that are extremely regulated like us while there're other industries that make billion without doing anything.

[Greg R.]

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Bruce Woodruff:

Quote from @Michael Wooldridge:

Quote from @Bruce Woodruff:

Quote from @Greg R.:

 Was curious the comment is interesting. I’m not somebody that believes full leverage is a good path even if it’s likely the most profitable. I paid off my first rental at 32 because it allowed me to have a mortgage that was nothing on the primary. Later rentals I’m leveraging somewhere between 75-40% depending on the class. so by no means am I full leverage.

Just wanted to ask since a lot of folks are reading this thread at this point and the trend could be interesting for some :) 

yes very interesting. Nine months from now chatter in this thread would realize their wishful thinking..... or not :-) 

I really like to see Greg comment nine months from now :)

I don't really understand this comment in relation to the post you quoted.

I'm pretty sure in 9 months I'm going to be sitting on a couple more properties and very glad that I waited and didn't buy during the peak of the 2022 housing bubble.

Heck, even if I bought right now I'd be way ahead compared to 5-6 months ago. In my area median is already 90k less than it was at the peak. Prices have dropped significantly since May/ June. 

[Greg R.]

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Buying when there is a good deal is common sense - that's true regardless of prices, rates, or market conditions. 

The point is that a overwhelming majority of buys right now are not good deals. Prices are still very high and rates are at a multi-decade high. 

Trying to buy at the very bottom is nearly impossible, but that's not what I'm advocating. I'm saying not to buy when prices are at the ceiling. If I buy somewhere between the high and the low, that's ok. Buying at the top of a bubble is not smart. 

So you say it's a fools errand to try and forecast the market, which is exactly what you and Carlos are trying to do. You guys sit here and talk about the economy, inflation, the IFM, the FED and what they are going to do a year out. 

But now you're saying that trying to time any market is "fool hardy". 

 I said it’s a fools errand to time the high and the low. It’s also pointless because there are other factors. 
As an example if I’m sitting on $1 million cash right now do I really hold off because interest rates are high? Especially if I know I can refinance and make money in the meantime and protect the current money from inflation? 

The only thing I advocate is making good deals period. I bought one not long ago will make CoC conservatively 19% on the realistic side closer to 23% and possibly as high as 27%. interest rate isn't great at 6% but who cares with that kind of cash flow? i'll refi in a few years. Could I maybe lose 5-7% in equity in short term? Sure. Do I care? Nope not selling it anytime soon.

Anyway there’s a different in forecasting no crash to market and trying to time the high and low.

If we want to be precise your exact words were 'Waiting for the best deal or trying to time any market is fool hardy"

And that's exactly what you and Carlos (and others) have been doing. He was open and admitted it :)

I'm actually with you guys in terms of trying to forecast the market and time moves. Our difference is that we have different opinions of what comes next. 

[Michael Wooldridge]

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Buying when there is a good deal is common sense - that's true regardless of prices, rates, or market conditions. 

The point is that a overwhelming majority of buys right now are not good deals. Prices are still very high and rates are at a multi-decade high. 

Trying to buy at the very bottom is nearly impossible, but that's not what I'm advocating. I'm saying not to buy when prices are at the ceiling. If I buy somewhere between the high and the low, that's ok. Buying at the top of a bubble is not smart. 

So you say it's a fools errand to try and forecast the market, which is exactly what you and Carlos are trying to do. You guys sit here and talk about the economy, inflation, the IFM, the FED and what they are going to do a year out. 

But now you're saying that trying to time any market is "fool hardy". 

 I said it’s a fools errand to time the high and the low. It’s also pointless because there are other factors. 
As an example if I’m sitting on $1 million cash right now do I really hold off because interest rates are high? Especially if I know I can refinance and make money in the meantime and protect the current money from inflation? 

The only thing I advocate is making good deals period. I bought one not long ago will make CoC conservatively 19% on the realistic side closer to 23% and possibly as high as 27%. interest rate isn't great at 6% but who cares with that kind of cash flow? i'll refi in a few years. Could I maybe lose 5-7% in equity in short term? Sure. Do I care? Nope not selling it anytime soon.

Anyway there’s a different in forecasting no crash to market and trying to time the high and low.

If we want to be precise your exact words were 'Waiting for the best deal or trying to time any market is fool hardy"

And that's exactly what you and Carlos (and others) have been doing. He was open and admitted it :)

I'm actually with you guys in terms of trying to forecast the market and time moves. Our difference is that we have different opinions of what comes next. 

 Now you are just being needlessly picky. “Timing the market” is an incredibly common phrase used in stocks - do you not trade in them? The biggest hit a lot of consumer investors make with stocks is pulling out in timing the market. If people pulled out in October they lost big money this past week when it jumped quite a bit. 

I know what Carlos said. Frankly I’ve never heard somebody make that kind of comment as distinct as that, and I know plenty on Wall Street. The trick to investing is either day trading - which is a ridiculous amount of work or being in it long term. Trying to time big swings just isn’t feasible, if it were those investment companies would return a lot more. 

But my forecast on what comes next could easily swing 2-3 quarters. I’ve been talking about general periods. That’s hardly useful for “timing” the high or low of a market. So no I’ve not been trying to time the market. I don’t care about the market. I care about what my investment makes me on return. Simple as that. 

BTW people in 08 got scared off from investing back then too. Left a lot of money on the table because they were convinced more bad was coming…. 

[Michael Wooldridge]

@Greg R. or to put it more bluntly while I don’t think their is a massive crash coming. I would not recommend flipping at the moment unless it was a complete steal. Too many variables. 

But investing for long term and cash flow? Yeah easy enough to run the numbers and temporary short term swings have no impact. 

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Buying when there is a good deal is common sense - that's true regardless of prices, rates, or market conditions. 

The point is that a overwhelming majority of buys right now are not good deals. Prices are still very high and rates are at a multi-decade high. 

Trying to buy at the very bottom is nearly impossible, but that's not what I'm advocating. I'm saying not to buy when prices are at the ceiling. If I buy somewhere between the high and the low, that's ok. Buying at the top of a bubble is not smart. 

So you say it's a fools errand to try and forecast the market, which is exactly what you and Carlos are trying to do. You guys sit here and talk about the economy, inflation, the IFM, the FED and what they are going to do a year out. 

But now you're saying that trying to time any market is "fool hardy". 

 I said it’s a fools errand to time the high and the low. It’s also pointless because there are other factors. 
As an example if I’m sitting on $1 million cash right now do I really hold off because interest rates are high? Especially if I know I can refinance and make money in the meantime and protect the current money from inflation? 

The only thing I advocate is making good deals period. I bought one not long ago will make CoC conservatively 19% on the realistic side closer to 23% and possibly as high as 27%. interest rate isn't great at 6% but who cares with that kind of cash flow? i'll refi in a few years. Could I maybe lose 5-7% in equity in short term? Sure. Do I care? Nope not selling it anytime soon.

Anyway there’s a different in forecasting no crash to market and trying to time the high and low.

If we want to be precise your exact words were 'Waiting for the best deal or trying to time any market is fool hardy"

And that's exactly what you and Carlos (and others) have been doing. He was open and admitted it :)

I'm actually with you guys in terms of trying to forecast the market and time moves. Our difference is that we have different opinions of what comes next. 

 Now you are just being needlessly picky. “Timing the market” is an incredibly common phrase used in stocks - do you not trade in them? The biggest hit a lot of consumer investors make with stocks is pulling out in timing the market. If people pulled out in October they lost big money this past week when it jumped quite a bit. 

I know what Carlos said. Frankly I’ve never heard somebody make that kind of comment as distinct as that, and I know plenty on Wall Street. The trick to investing is either day trading - which is a ridiculous amount of work or being in it long term. Trying to time big swings just isn’t feasible, if it were those investment companies would return a lot more. 

But my forecast on what comes next could easily swing 2-3 quarters. I’ve been talking about general periods. That’s hardly useful for “timing” the high or low of a market. So no I’ve not been trying to time the market. I don’t care about the market. I care about what my investment makes me on return. Simple as that. 

BTW people in 08 got scared off from investing back then too. Left a lot of money on the table because they were convinced more bad was coming…. 

 No need to even day trading , bah that is very tiring , I never trade stock actually, maybe you don’t get what I am saying ….

I am saying LTR is expensive if return is only dscr 1x in the future , better just plain REIT investing or buy outside usa.

[Greg R.]

The stock market moves incredibly fast, where as the RE market generally moves very slow. If we look at the last crash it took about 2 years from the peak to fully bottom out. From there it stayed relatively flat for another 3 years. 

I think that there are going to be deals to be had 2-3 years from now. The market isn't going to bottom out in Q1 and immediately shoot right back up in a matter of months. 

There's no way to know for sure, but I think we'll continue to see declines throughout 2023 and then it will flatten out with very small increases for another year or two. That would be my guess.

[Michael Wooldridge]

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Buying when there is a good deal is common sense - that's true regardless of prices, rates, or market conditions. 

The point is that a overwhelming majority of buys right now are not good deals. Prices are still very high and rates are at a multi-decade high. 

Trying to buy at the very bottom is nearly impossible, but that's not what I'm advocating. I'm saying not to buy when prices are at the ceiling. If I buy somewhere between the high and the low, that's ok. Buying at the top of a bubble is not smart. 

So you say it's a fools errand to try and forecast the market, which is exactly what you and Carlos are trying to do. You guys sit here and talk about the economy, inflation, the IFM, the FED and what they are going to do a year out. 

But now you're saying that trying to time any market is "fool hardy". 

 I said it’s a fools errand to time the high and the low. It’s also pointless because there are other factors. 
As an example if I’m sitting on $1 million cash right now do I really hold off because interest rates are high? Especially if I know I can refinance and make money in the meantime and protect the current money from inflation? 

The only thing I advocate is making good deals period. I bought one not long ago will make CoC conservatively 19% on the realistic side closer to 23% and possibly as high as 27%. interest rate isn't great at 6% but who cares with that kind of cash flow? i'll refi in a few years. Could I maybe lose 5-7% in equity in short term? Sure. Do I care? Nope not selling it anytime soon.

Anyway there’s a different in forecasting no crash to market and trying to time the high and low.

If we want to be precise your exact words were 'Waiting for the best deal or trying to time any market is fool hardy"

And that's exactly what you and Carlos (and others) have been doing. He was open and admitted it :)

I'm actually with you guys in terms of trying to forecast the market and time moves. Our difference is that we have different opinions of what comes next. 

 Now you are just being needlessly picky. “Timing the market” is an incredibly common phrase used in stocks - do you not trade in them? The biggest hit a lot of consumer investors make with stocks is pulling out in timing the market. If people pulled out in October they lost big money this past week when it jumped quite a bit. 

I know what Carlos said. Frankly I’ve never heard somebody make that kind of comment as distinct as that, and I know plenty on Wall Street. The trick to investing is either day trading - which is a ridiculous amount of work or being in it long term. Trying to time big swings just isn’t feasible, if it were those investment companies would return a lot more. 

But my forecast on what comes next could easily swing 2-3 quarters. I’ve been talking about general periods. That’s hardly useful for “timing” the high or low of a market. So no I’ve not been trying to time the market. I don’t care about the market. I care about what my investment makes me on return. Simple as that. 

BTW people in 08 got scared off from investing back then too. Left a lot of money on the table because they were convinced more bad was coming…. 

 No need to even day trading , bah that is very tiring , I never trade stock actually, maybe you don’t get what I am saying ….

I am saying LTR is expensive if return is only dscr 1x in the future , better just plain REIT investing or buy outside usa.

When you commented earlier I assumed you were talking stocks. LTR, unless MF/commercial, is just a piggy bank that appreciate and makes some cash flow until paid off. So I agree with you on that. STR is much more lucrative or like you said buying outside the USA.

[Michael Wooldridge]

Quote from @Greg R.:

The stock market moves incredibly fast, where as the RE market generally moves very slow. If we look at the last crash it took about 2 years from the peak to fully bottom out. From there it stayed relatively flat for another 3 years. 

I think that there are going to be deals to be had 2-3 years from now. The market isn't going to bottom out in Q1 and immediately shoot right back up in a matter of months. 

There's no way to know for sure, but I think we'll continue to see declines throughout 2023 and then it will flatten out with very small increases for another year or two. That would be my guess.

 So for national median yes or specifically LV, Cali, Florida in particular during the last crash. Lot of markets recovered faster.

All that said I do think we will stagnation I’ve been saying that for months in this thread. But thats why I point to good deals now. If it’s not going to get much worse (and 5-7% more is not that big of a deal) then I’ll take good returns on cash now rather than letting it sit in the bank and lose money to inflation. All day long. 

[Carlos Ptriawan]

Quote from @Greg R.:

The stock market moves incredibly fast, where as the RE market generally moves very slow. If we look at the last crash it took about 2 years from the peak to fully bottom out. From there it stayed relatively flat for another 3 years. 

I think that there are going to be deals to be had 2-3 years from now. The market isn't going to bottom out in Q1 and immediately shoot right back up in a matter of months. 

There's no way to know for sure, but I think we'll continue to see declines throughout 2023 and then it will flatten out with very small increases for another year or two. That would be my guess.

 That’s way to go , you just give forecasting as well lol :)

[Greg R.]

Quote from @Michael Wooldridge:

Quote from @Greg R.:

 So for national median yes or specifically LV, Cali, Florida in particular during the last crash. Lot of markets recovered faster.

All that said I do think we will stagnation I’ve been saying that for months in this thread. But thats why I point to good deals now. If it’s not going to get much worse (and 5-7% more is not that big of a deal) then I’ll take good returns on cash now rather than letting it sit in the bank and lose money to inflation. All day long. 

I'm personally not seeing many good returns at the moment, especially LTR. I bought a property in January and am operating it as a STR. I also converted another property I own to STR in August.

STR is pretty slow right now. Some areas more than other, but there is a lot of over-saturation w/ STRs and also a lot of governmental and regulatory barriers. 

I'm doing ok w/ these two properties at the moment, but not where I want to be (20-25%+ COC).

In the meantime I'm looking to follow @Joe Villeneuve strategy and focus more on appreciation with "blue chip" properties. The strategy of putting 25% down on a 4-plex and getting a great return doesn't seem to be viable anymore - at least not for the time being. I'm seeing deals where you need to put 30-40% down just to break even. 
 

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Greg R.:

The stock market moves incredibly fast, where as the RE market generally moves very slow. If we look at the last crash it took about 2 years from the peak to fully bottom out. From there it stayed relatively flat for another 3 years. 

I think that there are going to be deals to be had 2-3 years from now. The market isn't going to bottom out in Q1 and immediately shoot right back up in a matter of months. 

There's no way to know for sure, but I think we'll continue to see declines throughout 2023 and then it will flatten out with very small increases for another year or two. That would be my guess.

 So for national median yes or specifically LV, Cali, Florida in particular during the last crash. Lot of markets recovered faster.

All that said I do think we will stagnation I’ve been saying that for months in this thread. But thats why I point to good deals now. If it’s not going to get much worse (and 5-7% more is not that big of a deal) then I’ll take good returns on cash now rather than letting it sit in the bank and lose money to inflation. All day long. 

 I think this time is different , investment in CA is almost make no sense even for appreciation…for decade…due to 2-4 cap rate.

What makes sense in this market is only flipping after interest rate stabilization.

this is why I want to invest STr only or just plain REIT

[Carlos Ptriawan]

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Greg R.:

 So for national median yes or specifically LV, Cali, Florida in particular during the last crash. Lot of markets recovered faster.

All that said I do think we will stagnation I’ve been saying that for months in this thread. But thats why I point to good deals now. If it’s not going to get much worse (and 5-7% more is not that big of a deal) then I’ll take good returns on cash now rather than letting it sit in the bank and lose money to inflation. All day long. 

I'm personally not seeing many good returns at the moment, especially LTR. I bought a property in January and am operating it as a STR. I also converted another property I own to STR in August.

STR is pretty slow right now. Some areas more than other, but there is a lot of over-saturation w/ STRs and also a lot of governmental and regulatory barriers. 

I'm doing ok w/ these two properties at the moment, but not where I want to be (20-25%+ COC).

In the meantime I'm looking to follow @Joe Villeneuve strategy and focus more on appreciation with "blue chip" properties. The strategy of putting 25% down on a 4-plex and getting a great return doesn't seem to be viable anymore - at least not for the time being. I'm seeing deals where you need to put 30-40% down just to break even. 
 

That's also applicable for STR. It is too low/complicated return for such an heavy work.

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Buying when there is a good deal is common sense - that's true regardless of prices, rates, or market conditions. 

The point is that a overwhelming majority of buys right now are not good deals. Prices are still very high and rates are at a multi-decade high. 

Trying to buy at the very bottom is nearly impossible, but that's not what I'm advocating. I'm saying not to buy when prices are at the ceiling. If I buy somewhere between the high and the low, that's ok. Buying at the top of a bubble is not smart. 

So you say it's a fools errand to try and forecast the market, which is exactly what you and Carlos are trying to do. You guys sit here and talk about the economy, inflation, the IFM, the FED and what they are going to do a year out. 

But now you're saying that trying to time any market is "fool hardy". 

 I said it’s a fools errand to time the high and the low. It’s also pointless because there are other factors. 
As an example if I’m sitting on $1 million cash right now do I really hold off because interest rates are high? Especially if I know I can refinance and make money in the meantime and protect the current money from inflation? 

The only thing I advocate is making good deals period. I bought one not long ago will make CoC conservatively 19% on the realistic side closer to 23% and possibly as high as 27%. interest rate isn't great at 6% but who cares with that kind of cash flow? i'll refi in a few years. Could I maybe lose 5-7% in equity in short term? Sure. Do I care? Nope not selling it anytime soon.

Anyway there’s a different in forecasting no crash to market and trying to time the high and low.

If we want to be precise your exact words were 'Waiting for the best deal or trying to time any market is fool hardy"

And that's exactly what you and Carlos (and others) have been doing. He was open and admitted it :)

I'm actually with you guys in terms of trying to forecast the market and time moves. Our difference is that we have different opinions of what comes next. 

 Now you are just being needlessly picky. “Timing the market” is an incredibly common phrase used in stocks - do you not trade in them? The biggest hit a lot of consumer investors make with stocks is pulling out in timing the market. If people pulled out in October they lost big money this past week when it jumped quite a bit. 

I know what Carlos said. Frankly I’ve never heard somebody make that kind of comment as distinct as that, and I know plenty on Wall Street. The trick to investing is either day trading - which is a ridiculous amount of work or being in it long term. Trying to time big swings just isn’t feasible, if it were those investment companies would return a lot more. 

But my forecast on what comes next could easily swing 2-3 quarters. I’ve been talking about general periods. That’s hardly useful for “timing” the high or low of a market. So no I’ve not been trying to time the market. I don’t care about the market. I care about what my investment makes me on return. Simple as that. 

BTW people in 08 got scared off from investing back then too. Left a lot of money on the table because they were convinced more bad was coming…. 

 No need to even day trading , bah that is very tiring , I never trade stock actually, maybe you don’t get what I am saying ….

I am saying LTR is expensive if return is only dscr 1x in the future , better just plain REIT investing or buy outside usa.

When you commented earlier I assumed you were talking stocks. LTR, unless MF/commercial, is just a piggy bank that appreciate and makes some cash flow until paid off. So I agree with you on that. STR is much more lucrative or like you said buying outside the USA.

 For liquid investments I only buy options / futures and index , never individual stock.


for appreciation I am looking for min 15 IRR , not possible in US. usually I double money every 5-6 years.

This coming decade is quite hard for investment. Need to be more careful. The massive collapse of crypto I think would trigger massive changes on how people do investment, folks are so reckless before it is good the fed raises the rates 

[Joe Villeneuve]

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Greg R.:

 So for national median yes or specifically LV, Cali, Florida in particular during the last crash. Lot of markets recovered faster.

All that said I do think we will stagnation I’ve been saying that for months in this thread. But thats why I point to good deals now. If it’s not going to get much worse (and 5-7% more is not that big of a deal) then I’ll take good returns on cash now rather than letting it sit in the bank and lose money to inflation. All day long. 

I'm personally not seeing many good returns at the moment, especially LTR. I bought a property in January and am operating it as a STR. I also converted another property I own to STR in August.

STR is pretty slow right now. Some areas more than other, but there is a lot of over-saturation w/ STRs and also a lot of governmental and regulatory barriers. 

I'm doing ok w/ these two properties at the moment, but not where I want to be (20-25%+ COC).

In the meantime I'm looking to follow @Joe Villeneuve strategy and focus more on appreciation with "blue chip" properties. The strategy of putting 25% down on a 4-plex and getting a great return doesn't seem to be viable anymore - at least not for the time being. I'm seeing deals where you need to put 30-40% down just to break even. 
 

Putting 30-40% down doesn't get you to break even.  All it does is have you pay all your negative CF up front.  The goal, as always, is to use as little cash as possible (DP).  It doesn't matter what the economy is doing.  The economy doesn't dictate what a good deal is...it just impacts the numbers on the terms of that deal.  Deals are made based on two things:
1 - The least amount of cost to the REI (cost = cash out of pocket)
2 - How someone/something pays for the rest (terms).

[Michael Wooldridge]

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Buying when there is a good deal is common sense - that's true regardless of prices, rates, or market conditions. 

The point is that a overwhelming majority of buys right now are not good deals. Prices are still very high and rates are at a multi-decade high. 

Trying to buy at the very bottom is nearly impossible, but that's not what I'm advocating. I'm saying not to buy when prices are at the ceiling. If I buy somewhere between the high and the low, that's ok. Buying at the top of a bubble is not smart. 

So you say it's a fools errand to try and forecast the market, which is exactly what you and Carlos are trying to do. You guys sit here and talk about the economy, inflation, the IFM, the FED and what they are going to do a year out. 

But now you're saying that trying to time any market is "fool hardy". 

 I said it’s a fools errand to time the high and the low. It’s also pointless because there are other factors. 
As an example if I’m sitting on $1 million cash right now do I really hold off because interest rates are high? Especially if I know I can refinance and make money in the meantime and protect the current money from inflation? 

The only thing I advocate is making good deals period. I bought one not long ago will make CoC conservatively 19% on the realistic side closer to 23% and possibly as high as 27%. interest rate isn't great at 6% but who cares with that kind of cash flow? i'll refi in a few years. Could I maybe lose 5-7% in equity in short term? Sure. Do I care? Nope not selling it anytime soon.

Anyway there’s a different in forecasting no crash to market and trying to time the high and low.

If we want to be precise your exact words were 'Waiting for the best deal or trying to time any market is fool hardy"

And that's exactly what you and Carlos (and others) have been doing. He was open and admitted it :)

I'm actually with you guys in terms of trying to forecast the market and time moves. Our difference is that we have different opinions of what comes next. 

 Now you are just being needlessly picky. “Timing the market” is an incredibly common phrase used in stocks - do you not trade in them? The biggest hit a lot of consumer investors make with stocks is pulling out in timing the market. If people pulled out in October they lost big money this past week when it jumped quite a bit. 

I know what Carlos said. Frankly I’ve never heard somebody make that kind of comment as distinct as that, and I know plenty on Wall Street. The trick to investing is either day trading - which is a ridiculous amount of work or being in it long term. Trying to time big swings just isn’t feasible, if it were those investment companies would return a lot more. 

But my forecast on what comes next could easily swing 2-3 quarters. I’ve been talking about general periods. That’s hardly useful for “timing” the high or low of a market. So no I’ve not been trying to time the market. I don’t care about the market. I care about what my investment makes me on return. Simple as that. 

BTW people in 08 got scared off from investing back then too. Left a lot of money on the table because they were convinced more bad was coming…. 

 No need to even day trading , bah that is very tiring , I never trade stock actually, maybe you don’t get what I am saying ….

I am saying LTR is expensive if return is only dscr 1x in the future , better just plain REIT investing or buy outside usa.

When you commented earlier I assumed you were talking stocks. LTR, unless MF/commercial, is just a piggy bank that appreciate and makes some cash flow until paid off. So I agree with you on that. STR is much more lucrative or like you said buying outside the USA.

 For liquid investments I only buy options / futures and index , never individual stock.


for appreciation I am looking for min 15 IRR , not possible in US. usually I double money every 5-6 years.

This coming decade is quite hard for investment. Need to be more careful. The massive collapse of crypto I think would trigger massive changes on how people do investment, folks are so reckless before it is good the fed raises the rates 

Expectations are going to have to change for people is all. Stock market, real estate have all had massive jumps the last decade. Doesn’t mean you can’t still make money but it will likely be slower next 5 years. The trick is to keep going in it so you take advantage of the next wave. 

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Expectations are going to have to change for people is all. Stock market, real estate have all had massive jumps the last decade. Doesn’t mean you can’t still make money but it will likely be slower next 5 years. The trick is to keep going in it so you take advantage of the next wave. 

Much slower. In lowest cap-rate zip code: cap rate is 2% , and IRR is below 2 maybe now. In highest cap rate zip code 12% cap rate, DSCR is only 2.5 with 25% down. IRR maybe still 6%-7% but no longer 10%.

Maybe much easier for the next decade just to do credit investment rather than equity investment as the return is too pathetic. Just giving credit to the syndicator as 1st position note holder could be better option in my eyes. The problem with note/credit investment is doing DD is another headache.

[Michael Wooldridge]

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Expectations are going to have to change for people is all. Stock market, real estate have all had massive jumps the last decade. Doesn’t mean you can’t still make money but it will likely be slower next 5 years. The trick is to keep going in it so you take advantage of the next wave. 

Much slower. In lowest cap-rate zip code: cap rate is 2% , and IRR is below 2 maybe now. In highest cap rate zip code 12% cap rate, DSCR is only 2.5 with 25% down. IRR maybe still 6%-7% but no longer 10%.

Maybe much easier for the next decade just to do credit investment rather than equity investment as the return is too pathetic. Just giving credit to the syndicator as 1st position note holder could be better option in my eyes. The problem with note/credit investment is doing DD is another headache.

Ehh with jobs continuing to be tight and tech/world/economy moving faster.  I don’t think it will take as long to bounce back either. 

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Expectations are going to have to change for people is all. Stock market, real estate have all had massive jumps the last decade. Doesn’t mean you can’t still make money but it will likely be slower next 5 years. The trick is to keep going in it so you take advantage of the next wave. 

Much slower. In lowest cap-rate zip code: cap rate is 2% , and IRR is below 2 maybe now. In highest cap rate zip code 12% cap rate, DSCR is only 2.5 with 25% down. IRR maybe still 6%-7% but no longer 10%.

Maybe much easier for the next decade just to do credit investment rather than equity investment as the return is too pathetic. Just giving credit to the syndicator as 1st position note holder could be better option in my eyes. The problem with note/credit investment is doing DD is another headache.

Ehh with jobs continuing to be tight and tech/world/economy moving faster.  I don’t think it will take as long to bounce back either. 

In 2023 , bouncing to the 2022 pricing level is possible as the gap is only one digit, but that could be the max for a while, especially for low cap state like CA. TX could have better return compared to CA in the next decade I think based on money flows. Usually, after the city found  a new cap rate, for example, upgrading from 6% cap to 5% cap rate, it takes at least 4-5 years for RE to be flat in that cap rate zone. 

The biggest RISK factor that drives asset inflation is actually how much M2 circulates in the market. Since Fed already printed a massive amount of USD in 2000. If Fed prints much fewer dollars like 2018-2022 era then the price would be either flat or slow growth. There's huge appreciation compression with that policy. So to invest, we have to project what the Fed wants. 

Basically, if I want to make as much money as possible as low risk as possible, I need to leverage heavily during the first cycle of QE program like in 2009 and sell/refi assets during bubble. Now real estate is not attractive anymore, but credit investment is very attractive. 

There's another investment that has better yield outside like syndication to purchase NBA/NFL sports team, that would be interesting as IRR could be 30%. And in this niche investment, there's no dependency on Fed policy.

[Greg R.]

Expectations are going to have to change for people is all. Stock market, real estate have all had massive jumps the last decade. Doesn’t mean you can’t still make money but it will likely be slower next 5 years. The trick is to keep going in it so you take advantage of the next wave. 

This 100%.. this is exactly my thought. Because of this I'm not looking for high CF properties, but blue chip properties w/ high appreciation upside I can flip in 5 yrs or so. I just need to break even (AT LEAST), I can't be negative CF.