All Forum Posts by: Ashan D

Actually I'm saying the opposite of what you're saying. You say

I don't like this approach because you rely on other sources to find target markets and then attempt to analyze the market based on potentially misleading information. IE buy in southern florida because population/prices are booming! If you were early you did fantastic, if you were in the middle you did good (which is where your approach would get you in)

I would rather learn all the indicators of an emerging market (not just the broad strokes like population increase, supply/demand, job growth etc. I want more depth than that) and then use that knowledge to find emerging markets myself. That makes a whole lot more sense to me at least.

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What about a doubling of the current inventory within 12 months screams "hot market" to you? How does that NOT give you insight to what is going on?
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I can think of a couple possibilities.

1) As I learned in a real estate class, inventory levels are a lagging indicator which may not signal drops in prices for YEARS. If sellers can sell for the same price by waiting an extra month or two, many of them generally will.

2) As you can see from the above relying on any single indicator to call the direction of the market is a bad idea. What if your example of a 2x increase in inventory was due to a record heat wave in dallas? Will that apply to the future? (it might)

Probably the easiest way would be to look at census data showing the net growth or decline in regions. Communities that are growing and have people moving into the city would be a good opportunity for flipping. On the flip side, communities that are showing negative growth would probably not be a good investment.

This is a good start but it is too general and ignore many other indicators that could give someone a competitive edge. That is why I take this subject seriously.

Find some target markets, then look to each community to find out why the growth is going on.

This is like saying "find a strong stock, and then figure out why it's going up" Wouldn't it be a good idea to learn what factors go into the pricing of that stock before I throw my rationale at it (which BTW is why many people fail at stock investing)

Now I know RE is less volatile and easier to predict than stocks, but I still want to approach it as I would any other investment and that is to learn as much as I can before I make any novice decisions with my money.

I was holding out for a better reference, but I guess I'll check out a market analysis book that's at my library (copyright 1988!)

All nice websites guys, but none of them really address my issue of how to analyze and research these markets for myself. I've searched for this information online and it seems hard to find also. Why is this? Are RE investors supposed to just know what factors signal a strengthing or weakening market based only on experience or intuition?

If someone has a good reference to learn market analysis I'd greatly appreciate it!

Hi,

Because of the area I live in (Los angeles) I'll have to look elsewhere to do the type of investing I want to do. The benefit of looking outside my own area is that I can research various markets and pick a strong one to invest in. I don't know how to do this though, and I definitely don't want to depend on those CNN articles to pick my market. Does anyone know where I can learn to do market analysis myself?

Thanks

IMO if I was in your situation I would fib your wife by saying that it was actually the person's dog that died on the property (and then speak to the neighbor so they would give the same story) I'm not an advocate of lying but in this circumstance I would jusitfy it, because 1) It would give your wife peace of mind (because she does seem awefully afraid of this type of thing without a justifiable rational basis) and 2) Potentially save you from having to move to a different house.

Boy I always get pumped reading an R2D2 post, excellent stuff man. For me personally I don't think I can do it though, as I'm in southern california (and tied down here because of school) Around here I couldn't offer 20-30% below market without smearing my name as that usually equates to a discount of $100-200k or more. I don't even think I can find 2-4% discounts on apartments buildings as per your second example as most apartments around here have ugly numbers just like the houses.

I wanted to ask you if you've had any experience investing out of state. It seems like that type of venture would fit the go-getter personality that you seem to have, but maybe your situation didn't require it of you.

Thanks

I probably would have just made a higher offer so long as the numbers were still favorable to me. In this case I would have played right into the hand of the unscrupulous party but I don't think this is the type of thing you should be paranoid about and try to always defend against, because you are much more likely to burn yourself that way. In the much more likely scenario that there was another bidder, you may have lost the house. I say just bid and negotiate strictly on the numbers.

Ok Cassandra so what would you say the negatives are then, because surely there must be be something. Greater risk of ruin? Harder to find a deal? Call me a skeptic but I don't believe there is a free lunch with anything and this commercial sector must have some caveat that allows it to stay more profitable than residential.

Yes I asked a similar question in another thread and would also like to know :D

Hello,

I'd like to know what are the reasons that allow commercial real estate to be so much better than residential. It seems to me that with fewer hassles managing tenants, higher appreciation, better cash flow, there must be SOME reason that the market allows this. Is there a much greater risk involved when selecting properties (maybe a poor location decision will make or break you, or an unexpected city ordinance can come at any time and mess things up?) Is it hard to find deals? Are there serious liquidity issues with selling? Do you need a lot of money to get involved (lets say more than 300k) If an anchor tenant leaves won't that disrupt the business of all the other tenants? I could go on but I think I've asked too much already :)

Thanks