All Forum Posts by: Alexander Roeschmann

@Walter Key I agree with you, but in my opinion this demand will only be there temporarily if the economy doesn't open up by June. Who is your main buyers group? Investors, blue or white collar workers? All that will influence how it turns out for you. But with rising inflation and a possible cut, interest rates will skyrocket and in this weak state of our economy people won't be able to afford the higher down payments nor qualify with a 700+ credit score. Furthermore all the forbearance's are going to be due sooner or later and a lot of people won't be able to pay it, which puts them in foreclosure, increasing supply, while decreasing demand and that is what will drive the prices down. Or a second wave will.

I think it all comes down to how long our economy is going to be on lock down and how quick we can reopen and go back to a somewhat normal state. 

Alexander Roeschmann

@Jay Hinrichs

 Yes I agree that air bnb probably won't be our biggest issue. But what about the huge amount of debt that is currently being built by the government. The fed is literally printing money out of hot air and the inflation is going to be massive. So at one point they will have to stop and that leads to increasing interest rates and down we go the spiral of doom.

I believe they'd have to stop printing money right now, and letting the economy do it's thing in a neoclassic way rather than with Keynesianism.

Alexander Roeschmann

Possible Housing Market Crash based on Pending Home Sales

Up to this day the US housing market has not been affected by Covid19, but now a lot of potential buyers decide against buying new houses as they a re afraid of a re- or even depression. This leads to a drop of Pending Home Sales of 14.5% (year on year) reaching new lower lows, that are only slightly better than in 2010.

(Graphic 1)

Currently we are at the weakest level since May 2011. (See Graphic 2)

(Graphic 2)

Overall those numbers are alarming and since there are fewer buyers in the market and a lot more sellers the market might plummet into new lower low territory. We are currently headed into a clear Buyers market, pressing prices even more, as AirBnb super hosts, that over-leveraged themselves, are forced to now sell quick.

My prediction is that prices will stagnate and slightly decrease if the economy opens up by May 15th. If this is not the case we are definitely seeing price decreases and if the lock down lasts as long as July we will have another Housing Market Crash, eventually even worse that in '08.

What are your thoughts?

@Alan Crookham Sure thing! If you need any more advice feel free to just dm me! I'd love to explain you the math behind it and of course just to network about real estate!

@Gregory Schwartz

It was close though! Have a good day!

@Caleb Heimsoth Alright I get it. But what is the best way to make sure it's appealing then. Take pictures before? 

Alright let's jump right into your example. You buy and rehab the property for 100k. Let's say you put 20% down (20k). Over the course of five years you made 12k only of off your cash flow. Then you sell the property for 130k, but don't forget in those five years of mortgage payments you're paying of interest and principle!!!! (That is the important stuff). I did the math and you'd have paid of $7299 of principle. Then we add the 17k expenses on sale.

So lets do the math

Total: 130k - 80k (mortgage) + $7299 + 12k -17k - 20k = $32,299 So you made a total profit of 32.3k in the course of five years!

That is a return of 160%!!!!! Let that sink in. If you got any questions feel free to DM me!

@Wayne Brooks

Alright I see what you mean. Yes the other units rent for about 1450ish, so my already low cash on cash return of 9% would actually drop way lower (6%ish) so that is not even worth considering.

Do you have any suggestions which cities to look into, during this crisis? I was looking in Miami, because I already know an Realtor and  Investor there. But obviously that won't match my criteria since prices are already so inflated there.

Alexander Roeschmann

@Anthoney Hanks Thank you, appreciate it!