All Forum Posts by: Emily And Eric Erickson

 You are very welcome, helped me just writing it out. 

 I definitely don't have a crystal ball but at the end of the day, its really the return that matters and not the price you paid. 

If you buy something today and it goes down another 10% in year 1 and up 3% each year for the next 3 years and you were never going to sell anyway, does that price even matter?

Our minimum hold time is 10 years and the requirement to cash flow from day one. Until we significant rental vacancies, that cash flow will be ensured regardless of the sticker price. 

Don’t get stuck on sideline too long – likely will be a 10-15% reduction, not a 50% reduction like 08-09

Reasons why:

• Total market leverage was just 42% of mortgaged homes’ values — the lowest number on record.
  • Wall Street has shifted from debt to equity in real estate and have thousands of homes fully paid for that they will sit on - huge ballast to home prices

• Last 5+ years investors have had to put down 20%+ down payments and have a lot of skin in the game with current portfolio- not willing to walk away from that
  • All of those loans are at 3-5% and only those who truly HAVE to sell will - everyone else will just wait
• Historic lows in mortgage balances overdue, with loans 90 days past due pegged at just 0.5%. That’s a far cry from the 11.36% rate in 2010

• Side of history - Big crashes only happen every 60-90 years – equity charts in US, Britain and even Rome prove this out

Get out of the fear mindset and start looking for opportunities NOW

• Shortage of rentals, still a need for housing - not over built and empty houses like in 2008
• Rental demand being pushed by inflation – more wage hikes push rent prices making great returns possible STILL. Never went away
• How well did you time the last downturn?
  • Most investors didn’t enter back in until 4-5 YEARS. Only the prepared truly took advantage. Those who waited became retail buyers, not investors.

Thinking ahead. What happens to the market once inflation is tamed and interest rates drop from 7% to even just 5%? Buyers will come back. The question is: Did you beat them to the punch or will you get stuck in line?

Current situation: Higher interest are freezing traditional buyers and leaving sellers in a lurch.

Opportunity: Cash buyers are getting the pick of the litter and can actually negotiate with the seller. Hallmarks of a buyer’s market

 Saw a shirt that mirrors that - it said - Don't wait to buy real estate - Buy real estate and WAIT! As long as you treat it as a long term investment, it will treat you to great returns. 

Great way to get started - Patrick runs a great class!

Who is on your list and who are you no longer continuing with?

 The student housing market around U of A is a micro market and is fascinating to watch. Several large developers have built beautiful high end condo feel student apartments super close to campus which initially depressed rents in houses. Now they have pushed their hand on room prices and students are looking for options. Constant accordion push pull. 

Parents tend to stay in STR's further away from campus where overnight parking is less of an issue

This is a great forum to get your feet wet - I highly recommend Patrick and this group

I personally use Amy Jacques at Blue Sky Accounting - she knows all of the real estate specific deductions that many CPA's miss or don't have a lot of experience in

You can reach her at 520-260-9741

 Just met Leslie at S&L Realty and they are building out their STR portfolio with 10 properties so far. They also do LT with 70 properties under management

They charge 25% for full service STR and are willing to customize to level of service you need and charge the typical 10% for LT

I have not used them yet personally but sounds like they are at least worth a call

S&L Realty - 520-222-7994