All Forum Posts by: Will Barnard

I enjoy your posts and generally agree, Aaron..... but people using 'more schooling' to suggest that someone else will learn more (what you want them to learn) is flawed thinking.

A lot of the alleged 'scholars' on this planet are how we get into these messes. High IQ's and zero common sense.....and their thoughts are generally theories anyway.

There is more combined wisdom on this forum than most Ivy League faculties without a doubt.... :-)

Not only would I agree with Bruce on the above 100%, I would agree 1000 PERCENT. Case in point, just look at those who run the Fed and just about every high seated politician - college degrees and zero brains when it comes to common sense. I don’t need a college degree or even a high school diploma to see clearly that the government reacts (and always very late) instead of planning ahead. A simple fact and example hat everyone has personal experience with in any large city is our freeways. We keep adding population, more cars, and more traffic but the government fails at reading the growth that sits right in front of their face to build more roads and highways. When they finally act, they take 12-15 years to get the job done and by that time, the population/traffic has already grown to fill the added lane, road or highway. It sucks but they keep repeating this and using ideas from 100 years ago and applying them today without any insight to new fresh ideas for todays world. Only one word comes to mind for this: MORONS

2 Votes

Dallas, Texas

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Bruce Woodruff:

Quote from @Will Barnard:

Although in every recent year, Cal experiences a net population loss....you can tweak the number s any way you like, but they are the numbers.....

(From Cal Matters, a non-partisan news org. Bold is mine)

“California appears to be on the verge of a new demographic era, one in which population declines characterize the state,” PPIC demographer Hans Johnson writes in a new analysis. “Lower levels of international migration, declining birth rates, and increases in deaths all play a role. But the primary driver of the state’s population loss over the past couple years has been the result of California residents moving to other states.”

And now interest rate is 6%, this post is becoming even more important.

I remember someone in BP posted a month ago that NAHB predicts interest rate in 2022/2023 is 6%. Now it's the reality. We don't know what would happen with rate so crazy like this.

Refinance is totally dead now. People doesn't want to sell their home. Home Depot started laying off people.

Carlos, you totally missed this EPIC data point which 100% clarifies there is NO collapse threat going on! Refi's have dropped almost 90%! If there was any "collapse" risk going on refi's would be UP, not down, people would be converting equity too $$$$ to make payments, right.

So what does a near 90% drop in refi's say? That people DON'T need the $$$$, right.

So not only do people NOT need the $$$$, there also sitting on that nice "piggy-bank" of $$$$ called equity.

What we are experiencing in the market is called STAGFLATION, not collapse, not recession, STAGFLATION. And yeah, I have been forecasting this for some considerable time, as i predicted google it, there is a chorus of industry "captains" now declaring the same; STAGFLATION. It's here, it's a reality, and it's NOT collapse.

High prices, low volume. STAGFLATION.

I wanted to point out my opinion on the refi market. You are stating that Regis dropped by 90% because people don’t need to turn equity into cash because they already have it. I am not sure that is the true reason. I would say that it is because only fools would refi a sub 3 or even a sub 5 interest rate to pull cash to then raise their rate to 6+%. Refis are dead because those with lower rates will hold on to them for dear life!

3 Votes

Dallas, Texas

Quote from @Eliott Elias:

Get contractors to com out and bid your jobs line item. Pay them for their time

This advice is regurgitated constantly on BP. If I was to take said advice back in the day when I would analyze 10-20 properties per month, that would be one hell of a high cost of due diligence not to mention manny of the homes I ended up making offers on would not have come to fruition as I would be highly dependent on a contractor taking that time and quoting it immediately so I could get the offer in. In a perfect world, sure, but in actual practice, this just does not work. You must build systems that get you what you need without having to rely on paying a service provider for it each time. That is just not efficient in my opinion.

0 Votes

Los Angeles County, California

Quote from @Alex Ballesteros:

I am currently reading "The Book on Estimating Rehab Costs" by J. Scott and it is a great source of information but i believe the book was published in 2019, and a lot has changed since then especially increased prices of labor & materials, and Los Angeles is on the more expensive side of things.

Do you guys have any information sources or any tips on how to estimate rehab costs here in Los Angeles? Reaching out to local contractors is already on my to do list.

Perhaps you are missing the point of J Scott’s book. 3 years ago and a lot has changed in pricing - true, but the book was not about pricing from 2019, it was about the how to arrive at a specific price so if you follow the how to’s of the book and practice, you will get there no matter what happens to specific line item pricing.

For you standard rehab homes, it took some time to learn but after doing it over and over again, developing a spreadsheet of each line item and developing some great shortcuts, I was able to (and still can today) walk a rehab property and come out 30 minutes later (and often less time) with a number in my head that will be within 10% of the actual. This is accomplished by building your line item spreadsheet and filling in prices (and updating pricing as it changes over the months/years). Knowing your local market conditions and what the competition has for amenities and finishes, and then having the ability to group line items into sub categories with pricing will allow to to add it all up fast and easy either on paper or in your head as you walk a project.

As an example, 1500sf 3 bed 2 bath home. Needs new windows (u know your area pricing for labor and material is say $500 per) and the home has 10 total. You Talley $5k on paper or in your head. Needs new kitchen cabs and counters, (your spreadsheet for all involved in that including cab pulls is say $20k), needs both bathrooms fully gutted and remodeled, you know each line item from toilet to vanity to tub, to tile, to shower glass and mirror runs $15k on average per bath, so you Talley $30k for 2 baths and $20k for the kitchen.

Please note these prices are just pulled out of the air and are not meant to be used as your numbers, you must come to your numbers by getting actual pricing for each line item. Now you have an idea of how to get where you want to go.

0 Votes

Los Angeles County, California

Quote from @Chris Martin:

I must admit I didn't read all the posts. I did read @Will Barnard post on page 5(?) that seems to sum up current conditions.

From a "crash' perspective, there can be a price crash, a sales crash, or combinations of those. I generally look at home builders or Fannie Mae to get a (hopefully) good picture. Page 28 of the Toll Brothers latest SEC quarterly report shows that the number of net contracts signed in the last quarter dropped year-over-year from 3154 to 1266, about a 60% drop. What saves them, and why many don't call a "crash", is the margins have improved (people still paying more) and backlog is still really high. I don't (haven't) see this changing in the next 18-24 months in leading markets.

The Financial Crisis and GR set us up for where we are, aided by goofball supply issues, ongoing construction labor shortages, import tariffs on lumber, a pandemic, etc. It's not 2008, but our current state does hint at a systemic problem with permitting (so long a process), zoning, and planning. The about face on ADUs throughout the county is an indicator that law makers want to address the problem, but it seems to me that the "system" moves so slowly that the current housing supply problem, in growth areas at least, will persist for many years if not longer.

My summary: certainly, a "crash" or major correction in number of units of new homes from mid-to-high $ builders. Not a price crash, just a (minor?) correction from the bizarre demand issues after the pandemic. My 2 cents.

Here is another well laid out set of facts. I would also point out that these numbers are national and each specific local real estate market will be affected differently depending on their past and present RE conditions. If your market is a lower priced “entry level” market where prices have appreciated higher and faster and new construction was booming, than any point in the last 30 plus years, you can expect that specific area to correct steeper than other areas.
As an example, CA market as a whole has a housing shortage and despite the media BS of the great CA exodus (which facts show is a complete falsehood), the fact that new builds are rapidly dropping will only increase that shortness of supply for future adding yet another reason to support a V shaped correction then right back up when you combine the likelihood of interest rates climbing higher, then reversing downward in the future. If all that holds true, CA could experience yet another super buying opp for the savvy investor.

2 Votes

Dallas, Texas

Quote from @James Hamling:

Quote from @Andrew Syrios:

Housing crash deniers, lol.

I don't think I've seen a single person say that housing would only continue to increase. What most have said (including me) is that a 2008-style collapse is unlikely given a variety of factors. I've been expecting prices to at least level off and probably correct some from the ridiculous increase over the past two years, especially with rates going up. That would seem to be the most common sentiment amongst us "deniers"

Isn't it so fantastic how a person can take any ridiculous narrative, and simply twist it to a stated standard of all who don't agree with it they must be "deniers"?

"Big-Foot Deniers", "Flat Earth Deniers", "E. Warren is a Reptile Over-Lord Deniers"....... Ok, maybe 1 of those is actually accurate, lol.

How about "Acknowledging the MATH and DATA of Real Estate Market, and what it is saying DENIERS". Is R.E. pricing taking a step back? Well holly-heck I hope so because consolidation is a major GOOD sign, it means normalization and health. A 5-10% consolidation step back after 40%+ increase is anything but a "collapse". Gas shoots from $2gal too $5gal, then too $4gal do we all run around saying how gas prices have "collapsed"? 3 steps up and 1 back is still 2 steps up is it not?

Any and all who say '08' repeat are simply without knowledge or flat out liars, it's just that simple. It's no different then saying were going to have a Great Depression run on the banks repeat. The ingredients for those things simply do not exist any longer, by intent and design. '08' was not a housing collapse, it was a financial system collapse that was expressed in the housing market, stock market, every market as it had a domino effect.

The REAL big issue all should be talking about is the EDUCATION COLLAPSE! Or library collapse, how about that? Tag-lines run so many lives now, it's disturbing.

"Housing crash deniers"....... Ugh, just ugh.

Thanks for saying what I was thinking. Often times I think these posts are ways and means for people to up their post count with silly banter and overzealous opinions that lack foundation or facts while others twist facts to meet their narrative. Opinion this, opinion that. Your wrong, I’m right, I’m right your wrong, etc.

To argue this topic, one first needs to actually define what “re market crash” is and that has slipped through this entire thread, although some wise folks have touched on the fact that the definition was not put out there.
over the past 2 years, many areas of the CA RE market have gained in excess of 30%. Most buyers placed at least 3.5% down and all cash buyers were the highest % in history that I can find. So with that and the other facts I pointed to in page 5 of this thread, even a massive 25% correction downward leaves homebuyers from 2020 with equity and those in 2021 slightly under value but with record low mortgage rates that they will certainly retain and not scream the sky is falling I have to sell.

I pointed out several times in several threads this year that the markets that will correct and will get slammed harder than any other would be the entry level starter homes (often first time buyer homes). These markets which are in all states, but generally speaking, I’m referring to So Cal, Vegas, Phoenix, Austin, etc - just to name a tiny few, will all feel the effects of the correction under way the most. The $2M+ level homes here in So Cal will likely also correct but those buyers have many more ways and means than the first time home buyer so I suspect they will not correct as hard or as fast. This portion is just my opinion based on facts I see in front of me, I could certainly be wrong and all markets could drop 20%. Even if that happens, it’s not a 2008 or anything close to it.

As investors, I believe we should continue buying multi family properties and hoarding cash and as low of a cost debt as you can find in preparation to buy the dip, which may be 2023. If the dip in RE (correction, not crash) is fast, it will likely be a V dip. The geniuses running government will certainly start spewing to the media that they will have to start lowering interest rates to pick back up the economy and RE market. So buying at lower prices with higher interest rates (or cash) and then refi those loans after rates come back down from what will likely end up in the 7’s or 8’ depending on how far J Powell takes it could be a great recipe for wins in your portfolios.

2 Votes

Dallas, Texas

Looking for deals before you have the money lined up is not a good idea and can waste agents time and sellers's time. Get your financing line up first. Any offer you submit will need to be with proof of financing anyways.

0 Votes

As another thought, you can also engage some other contractors to see if they can jump on the job and finish it up for you if this one is too busy. Change orders cause havoc to contractor's schedules so having another job lined up is not uncommon. That said, many contractors will work diligently through the change order to complete it and "push" the other job back a bit. That is why we use in our contracts "estimated start date" and "estimated completion date". They are not expected to be precise as so many factors can change them, many of which out of the control of the contractor and sometimes out of control for both contractor and homeowner.

0 Votes

Quote from @Arturo Lopez:

Quote from @Will Barnard:

I would have to disagree. Stucco has obviously been around a long time, but it is also the "new look". I think the OG poster must be refering to a home with lots of wood siding which was popular in the 60's-80's. I find these homes all the time, rip the siding off and stucco the home.

I do also agree that the most important factor is the curb appeal which would mean changing the old wood frame or metal frame windows, in doing so, you will have to stucco the home anyways unless you use retrofit pop-ins which I do not recommend, and all the other things mentioned - landscaping, nice looking color combinations, etc.

So, is stucco convenient? I say YES! If you are putting in new windows, you have lots to repair enayways and likely some framing to put in new sizes and locations. Stucco all new will make that CA home pop!

On the high end homes, smooth stucco surfaces are all the rage but also more expensive as they are more difficult and time consuming, but often necessary.

@Will Barnard
Thanks for sharing your insight, I have two questions.

1. I have a property under contract which has stucco, and the owner has done some minor repairs for cracks. These repairs have a smooth finish and it's not consistent with the texture of the entire wall. I got a contractor bid and they said I should redo the entire wall/house, but I think it may be too much work and not needed.
Do you think I'd be ok to just repaint the house, or should I consider redoing the entire house with stucco? (This is for a flip)

2. I'm currently considering retrofit windows (for the same project) to avoid having to redo the stucco patches around the window. Why do you recommend not using retrofit windows?

1. Hard to say without seeing it in person but generally speaking, a good stucco guy can fix the smooth patches with a matching stucco finish and may have to fog the area to get it to blend into the existing. Option 2 would be to re-stucco just that entire wall so it will not have any patches showing.
2. I don't use them because they come with wide frames which I don't think look modern or nice. Some people like the wide frames so it is a personal preference for appearance. Also, you have to special order those typically so it takes longer and they cost more, but then you save on the stucco patch. Time is your enemy on a flip so consider the time factor of money. Lastly, at least in my area, when I and other builders see retrofit windows, we look at it as the easy/cheap way out. That said, the price point for your particular home in your particular area may or may not justify either choice and my opinion doesn't matter when taking that into consderation.

1 Vote

Quote from @Antonio Bodley:

Should I care about buying homes in awful condition and in poor locations as long as there is an end buyer that buys junk homes in poor areas? My thing is this. If someone buys and rehab a junker house in great condition surrounded by junk homes on that same street, who would want to live in a nice home in a poor area? Wouldn't that just bring the property value way down on the newly renovated house?

You should care about all details of all homes you plan to offer on as the details are how you come up with an offer price. I don't buy in crappy neighborhoods because the exit is more difficult and there are many other negative factors to them. But that's me, others specialize and/or are successful in those types of markets. To each his own as it goes. As Jerryll pointed out, the details generate the numbers and the offer amount would have to be at a point that takes into consideration the comps, the rehab amount, the buyer's pool, the current local market conditions, etc.

2 Votes

All Forum Posts by: Will Barnard

Will Barnard has started 146 posts and replied 13853 times.

Post: Housing crash deniers ???

Post: Housing crash deniers ???

Post: Estimating Rehab Cost in Los Angeles, CA

Post: Estimating Rehab Cost in Los Angeles, CA

Post: Housing crash deniers ???

Post: Housing crash deniers ???

Post: Which comes first? Finding the financing or finding the deal?

Post: Help with dealing with contractor

Post: Stucco convenient????

Post: Should I care or leave that up to the end buyer?

Will Barnard has started 146 posts and replied 13853 times.

Biggerpockets Logo Post: Housing crash deniers ???

Biggerpockets Logo Post: Housing crash deniers ???

Biggerpockets Logo Post: Estimating Rehab Cost in Los Angeles, CA

Biggerpockets Logo Post: Estimating Rehab Cost in Los Angeles, CA

Biggerpockets Logo Post: Housing crash deniers ???

Biggerpockets Logo Post: Housing crash deniers ???

Biggerpockets Logo Post: Which comes first? Finding the financing or finding the deal?

Biggerpockets Logo Post: Help with dealing with contractor

Biggerpockets Logo Post: Stucco convenient????

Biggerpockets Logo Post: Should I care or leave that up to the end buyer?

Post: Housing crash deniers ???

Post: Housing crash deniers ???

Post: Estimating Rehab Cost in Los Angeles, CA

Post: Estimating Rehab Cost in Los Angeles, CA

Post: Housing crash deniers ???

Post: Housing crash deniers ???

Post: Which comes first? Finding the financing or finding the deal?

Post: Help with dealing with contractor

Post: Stucco convenient????

Post: Should I care or leave that up to the end buyer?