'08 RE Crash - What Was Going On In Your Life?

[Lukas Zupan]

For those of you who don't want to know about me and instead want to get to the point of this post move on to "2". 

1.)

My name is Lukas Zupan - I'm a real estate investor in OKC, and I also own a RE photography business that specializes in 3D Tours. I have been in this game for 3 years now and I love studying real estate and learning, and since I started, I've overcome false beliefs and acquired new mindsets. (including realizing I should have and more importantly *could* have bought most if not all the houses I wholesaled while I learned) Still, I regret none of it and I carry on learning!
I was 8 years old when my family moved from Vegas to Oklahoma City when our land-lord collected rent for a few months on our apartment complex at the time (2008) and skipped to Brazil. Or that apparently was the story, and I have since realized that also happened to many people. Much of my memory of that time makes more sense now, however...I was certainly not an 8-year-old real estate investor just chomping at the bit to get houses for pennies again. Now, over 10 years later I realize that all the markers are in place to betray another correction is imminent, and..."overdue". 

2.)

Boom. Personal blurb complete. The reason I am deeply interested in your personal story surrounding the market crash/correction of 2008 is that my perspective of market cycles is largely from second-hand experience. While I'm interested in your experience of market cyles in general, (you Veterans out there!) and I don't mind mentions of historic trends and crashes prior to '08, I would like to keep the specifics more related to our most recent cycle.

There is no right or wrong answer, just feel free to share whatever comes to mind about your story around that time. I look forward to chatting!

-Lukas Zupan

[Steve Vaughan]

Originally posted by @Lukas Zupan:

Now, over 10 years later I realize that all the markers are in place to betray another correction is imminent, and..."overdue". 

There is no right or wrong answer, just feel free to share whatever comes to mind arund that time. 

While I have no real opinion on an 'imminent' correction, reliving the GRC makes me cringe overall.  

I had 36 rentals and just purchased my 3rd primary residence with 2 small kids.  Thankfully it had a mother in law apt to help weather the storm when my wife was laid off.  The state provided a 20hr/wk unemployment comp pkge to help us eat and I hadn't had a w2 since '02.  

About 1/3 of my tenants either bought a house with the $8k credit or consolidated and lived with family, friends. At first.  Then the foreclosure started hitting and my applicant quality rose significantly.  While A class overbuilds were offering 2 months free, my b class townhouses were filling fast and rents were rising.  My rural c class apts suffered with slow and no pays and vacancy.

Then the credit crunch.  My lines of credit and credit cards froze and or went to penalty pricing.  Couldn't finance any commercial assets period. Prices were attractive but cash was king.  Thankfully none of my commercial loans' 5yr call times hit from 09-11.  They would have called for sure as the regulatory environment in Washington was completely uncertain.  Banks just love uncertainty LOL.

I remember writing credit card checks to pay my property taxes.  I remember saying crap, that line froze, try another one. 

Now I have fat reserves, fat equity and don't mind purchasing with cash .I use private lenders vs commercial loans and you couldn't get me to blanket collateralize multiple properties if you paid me.  Helocs have fine print and gotchas.  401k loans are due right after you get paid off.  But keep on borrowing if you want to.

While most others are partnering, syndicating, refinancing to max leverage,  I'm ok to zag.  I will have a good chair when the music stops and won't miss a single nap.