All Forum Posts by: Cory Mccarthy

@Franklin Romine Thanks for your input and its nice to hear about those that benefited in the wake of the clossal collapse.  I too look to this field as a way to escape the rat race and provide some sort of fall back position.  I agree with several of the wiser folks on BP here that there is money to made in almost every market, you just have to position yourself to ensure you are the one that is more likely to be the one that is making the money.  Sounds like you have done well and I applaud your courage to kick it into gear and take a proactive approach to your finances and best of luck to you in the future.

@Jay Hinrichs, thanks for the input, you beat me to it.  I really appreciate your insights and obviously I have underestimated the impact to a large degree.  I was a home owner in the Michigan area at the time and I know my particular property value dropped about 40-50% alone, so I certainly am not oblivious to how much of blood bath it really was, but I also know (think) that certain states were hit a lot harder than others.  The obvious ones that everyone knows all too well were CA, NV, AZ, FL and my state MI (due primarily to the big three automakers), but it is my understanding (or at least perhaps my misguided belief) that some states were hardly affected at all, such as IA, KS, NE, WY.  Interestingly, I noticed that you flagged out higher grade assets as a possible exception, did I understand that correctly?  If so, why were higher grade assets a little more insulated?  Also you mentioned that it affected 80% of the country.  Am I reading this too literally or were there in fact some areas of the country less affected such as those I listed in the Midwest or rural areas where appreciation rates are lower to begin with and which weren't nearly as affected by the impact of the bubble that drove prices sky high prior to the crash.  Thanks in advance for any further clarification you can provide.

@Alex Franks, thanks also for your input.  I would love to hear from @Jay Hinrichs, @Joe Villeneuve, but the call out won't flag them as I haven't connected with either of them yet and apparently since they are not part of this string yet, it won't provide me the prompts below properly.  I will look to connect with them and ask them to provide some input as well.  Thanks for the suggestion!

@Jay Orlauski, Thank you for your response. Love hearing that you liquidated right before the crash, never hurts to have a little dumb luck on your side from time to time, but I think you should absolutely take all the credit for that "sharp Intellect and deep foresight" that you knew it was going to come crashing down and was time to cash in. As for your comments on not being in a position to truly take advantage of the fire sale, I certainly hear you there and am kicking myself as well. I have been thinking about REI for the better part of 20 years now, but was so focused on my career, I never took the time to research well enough and back then Bigger Pockets didn't exist. I have sat through a couple of the free GURU programs over the years, but knew they were scams as soon as I got there, so luckily have never paid them any money, but I just didn't know how else to go about it. I sure wish I would have discovered BP about 5 years ago though. That being said, no better time to start than the present. Best of luck to you in the future.

I would like to hear from several of the historians here that went through the most recent housing collapse back in 2007 through 2010 regarding what happened to their buy and hold strategy in that kind of environment.  Specifically, how did the collapse of the housing market/prices affect you personally if you were executing a buy and hold strategy at the time of the collapse?  If homes were already mortgaged and were cash flow positive at the time, despite losing considerable equity and maybe no longer being able to leverage any of that equity (or lack thereof) and thereby significantly slowing expansion plans for a few short years, did the collapse of home pricing pose a significant risk or financial set back to you in other forms such as loans being called due (particularly Private money or hard money loans as opposed to conventional), were you forced to sell properties for a significant loss for some reason that I am not understanding or seeing, were rents considerably affected in the downward direction for a short period of time, or where there other significant financial set backs you encountered as a result of the collapse of housing values that may not be easily identifiable to a newbie such as myself?   As I see it, there were several downsides at the time including and clearly not limited to:

Equity loss

Tightening of Credit

Over-Leveraged folks losing homes to foreclosure

Job losses causing some folks to not be able to meet financial obligations (rents)

But these could easily be offset by some of the positives at the time, particularly for those in a buy and hold position:

Increased pool of renters as folks lost their homes

Increased demand forcing rental prices up (after some period of time of course)

Banks (private lenders??) favoring those that were not over leveraged

Reduced interest rates

If you had homes at the time that were mortgaged, whether conventional or through private money and they were fully rented at the time with good LTV's prior to the crash, I would think the positive cash flow would position you well to weather that storm assuming your loans were locked in. Provided you weren't trying to dump under performing properties at the time, you may have experienced some short term heightened turnover if tenants lost jobs in the recession, but I still would think that replacement tenants would have been easily found as it is not like all of sudden millions of people no longer needed housing to stay in, so everyone would eventually land somewhere, right, particularly if you are in an upper income area, where unemployment wasn't nearly as badly affected? I can see commercial real estate taking a much stronger hit as businesses closed and vacancy rates skyrocketed, but I am thinking that residential at the time for savvy REI's would have had experienced minimal downsides that just required you to hunker down, conserve cash and wait for the recovery to open up a windfall of cheap properties and huge opportunities. Did you all of sudden experience similarly large vacancy rates for some reason that I am not seeing, were you unable to meet payment obligations for some reason, did you lose significant property outside of losing equity positions, did private money lenders all of sudden call in loans if they got hurt in markets?

Any thoughts you can share on this risk factor and experience would be much appreciated as I am preparing to rebut my wife's inevitable concerns that there is too much risk inherent in real estate investing and I am not entirely sure there still aren't bubbles being created by the abundance of cash that has been infused into the economy by a print happy fed.  And sorry for the long winded post here, I just wanted to make sure I was being clear about my concerns/questions and need to fully understand this risk before jumping in with both feet, full throttle.  Thanks in advance for your thoughts and insights.  

@Lauren Baker, if you used mobile device to respond to me, it worked and I am using mobile here to reply to you and it worked, but I understand that it can be touchy at times.  if you mispell a name and backspace, sometimes it doesn't prompt correctly, don't know why.  Just play with it and it usually will correct itself.  Anyway, sounds like you are on a great path!  Keep it up and don't get discouraged or listen to any naysayers.  Stay focused, stay dilligent, and stay persistent and results will follow.  If you are ever down in the Flint/Fenton area, let's meetup and have coffee together.  I have a daughter that is a few years older than you that I am trying to convince to get involved.  I will bring her along in the hopes your story might convince her to give it some thought!

Hi @Lauren Baker and Welcome to BP. Pretty new hear myself but have learned a ton in the short two months or so that I have been on here. Best advise I can give you right now is to network, network, network and read as much, listen to as much, and study as much as you can. Local REI meetups are a great way to network and I strongly suggest looking those up and attending whenever they are held in your local area. Lots of newbies show up to these events regularly, so don't be intimidated. Every one I have been to so far, I have met tons of very welcoming folks who want to pass along their knowledge, their success and their friendship if you are willing to reciprocate.

Podcasts are tremendously helpful, so are the books. Invest time and a little bit of money in those and you will be surprised at the payback those will provide. And beyond that, make connections here with others that have similar interests and experience. Once you do, use the @ symbol to flag them when you are mentioning them. Just type @ followed immediately by their name exactly as you see it in their posts and after typing in a the majority of their name, a suggestion box will appear below the text box. Select the right name from that suggestion area and it will highlight their name and flag them that they have been mentioned. Folks monitoring their accounts will likely see that mention quicker and may not ever see it if you don't use that feature. Just my two cents...

I agree with @Joe Ellis regarding finding a duplex or triplex and starting right now. If you can do that while still in college, you will basically get all of your housing paid for you for the balance of your college career, be learning a very important part of the REI profession while you are at it and graduate with a fraction of the debt that your counterparts will be. In essence, you will be starting the game with a 10 yard lead on your closest competitor in a 50 yard race, tough to lose those kinds of races. But it will take a tremendous amount of time, sacrifice and dedication to do that...sounds vaguely like the recipe to success that I have heard somewhere else??? Sounds to me like you may already possess that kind of drive if you are already on this site and thinking about such a thing. Don't let anyone talk you out of it, it's not if you can do that, the real search is how you can do that and it is possible.

Best of luck to you and let me know if there is ever anything else I can do for you.

Hi @Brandi Bryanand Welcome to BP. Pretty new hear myself but have learned a ton in the short two months or so that I have been on here. Best advise I can give you right now is to network, network, network and read as much, listen to as much, and study as much as you can. Local REI meetups are a great way to network and I strongly suggest looking those up and attending whenever they are held in your local area. Lots of newbies show up to these events regularly, so don't be intimidated. Every one I have been to so far, I have met tons of very welcoming folks who want to pass along their knowledge, their success and their friendship if you are willing to reciprocate.

Podcasts are tremendously helpful, so are the books.  Invest time and a little bit of money in those and you will be surprised at the payback those will provide. And beyond that, make connections here with others that have similar interests and experience.  Once you do, use the @ symbol to flag them when you are mentioning them.  Just type @ followed immediately by their name exactly as you see it in their posts and after typing in a the majority of their name, a suggestion box will appear below the text box.  Select the right name from that suggestion area and it will highlight their name and flag them that they have been mentioned.  Folks monitoring their accounts will likely see that mention quicker and may not ever see it if you don't use that feature.  Just my two cents... 

Best of luck to you and let me know if there is ever anything else I can do for you.

@Maureen Wilkerson, thanks for the pictures, what great progress!  Sorry for the late reply, I see that I had this typed out weeks ago, but apparently never hit the Post Reply button.  Not entirely sure what that last picture is of, foundation or basement,  whatever it is I can certainly see why you were originally so freaked out, because that by itself looks really intimidating.  But man what a difference you have already made.  In addition to getting paid at the end, one of the most rewarding parts beyond just looking at your accomplishments is knowing that you were also able to salvage such a property.  Don't know for sure if that is an historic home, but it certainly has that flavor if it is not, and turning something like that around has also got to be very rewarding and confidence building all at the same time.   Love the trayed ceilings in the what i presume to be the master bedroom and that bank of 4 widows in the living room (?).  Siding is also a huge improvement.  Please continue to post pictures periodically.   Can't wait to see finished product. 

@Timothy Gerdes- my advise is to use the rental property calculator under the tools area above and calculate your ROI. People vary widely on what they consider a good ROI as there are other factors to consider such as appreciation, your personal goals and how you are using property to achieve certain goals. And ROI will vary greatly from state to state, region to region. My one and only property comes in about 20%. I am relatively happy with that as I likely can't get a similar return anywhere else and it was my first property investment. Others I have spoken to are getting as much as the high thirties, while others are in the tens or high single digits. Depends on your goals, risk aversion, and tolerances. Most fairly large businesses want to drop 20+% to the bottom line after taxes! so I am in the ballpark. Hope that helps, let me know if I can help any further. Best of luck in future.