All Forum Posts by: Ethan S.

Hey BP,

I was wondering how most investors track the real estate market cycle in a local market. I did an internship with a commercial real estate company this past summer and from what I understood they use an online analytics tool. They use STDB which is an analytics tool provided to CCIM designated individuals. How exactly do you track market cycles with this? In order to have access to this analytics tool you have to pay around $1,300 for a membership. The tool seems pretty neat because it uses ArcGis for demographic analysis.  

Is there a way to implement this type of analytics? If so, how exactly is it done.. Or is it even worth the time understanding a local markets. Currently, in my market which it seems to be highly over priced and still a sellers market. 

Also, I took a real estate investment class this past semester at my university. The professor held a MAI designation and appraised commercial real estate investments for several years. He mentioned a study by Wheaton and Dipasquale about the market for real estate space and the market for real estate assets. It showed the impacts of demand growth which cause a change in assets value and construction. Below is an example:

I will have to check out Personal Capital. I haven't heard much about that one. 

So far Mint has been a great resource for compiling all of my transactions together, cash flow, and tracking overall net worth. I didn't really care for the way the budgeting program works on Mint compared to YNAB. YNAB 5 has been awesome for a more accurate budgeting as well as setting goals. Quicken seems to have a better overall layout and investment setup than Mint in my opinion. I agree with you, they're all pretty much the same thing. 

Which budgeting software would you recommend for organizing your finances most accurately?

I'm currently using free websites such as Mint & YNAB for tracking my finances. I am looking at buying Quicken Home & business 2017 software but I wanted to hear opinions. Any opinions and advice for personal finance would be much appreciated!

Here's the stuff were working on.. I figured out the first two questions but question 3 is pretty confusing. The 5 year balloon kinda threw me off

Also, you said that most of these answers don't align with the real world.. So what's the point of understanding Cash equivalency if its not practical?

SO.. I'm in this real estate investing class and have an exam tomorrow. This question below is a practice problem for the exam. I need some help please. I have the answer but I've spent the past hour trying to figure this thing out. 

Questions #3:

You are looking at purchasing a small industrial building the building currently is offered for sale at $1,875,000 with special financing arranged by the seller. The seller is offering the property at 5.5% amortized over 15 years assuming a down payment of 20% is included up front. A balloon payment will be required in 5 years. Assuming you go to the bank and take out a mortgage with same terms (expect the banks interest rate is 7%), what should you be willing to pay for the property?

 THE ANSWER IS $1,790,604.

Thank you!

@Michael Noto Would you have any advice/recommendations once I get the sales license?  

Ironbowl..?? War Eagle to that! This iron bowl will be interesting since our offense is all messed up.. Hey anything can happen in the iron bowl! I'm betting that our kicker will probably score the most points. Daniel Carlson is a decent kicker.

@Andy D. Yeah, I agree with your calculations for the payments and interest for each period. But wouldn't the aggregate amount of interest add up to large amount over a period of 5-10 years. Taking a glance at the amortization schedule.

(@.25% increase) Paying $75 x 60 months = $4,500  (Not discounted) 

(@.25% increase) Paying $75 x 120 months = $9,000 (Not discounted)

I know that's really not much but say if the increase was greater than .25% to something like 2.0%.

From an investors perspective I'm assuming a growth in interest would not make a difference because you could eventually write off most of the interest from the taxes by straight line depreciating the asset? 

So regardless if interest rates went back to what they were in the 70's or 80's it wouldn't really matter for an investor? Or the 

Mortgage Mechanics and can be a pretty confusing thing..

so I'm understanding...

1. Consumers perspective (Buying a home) = This kind of sucks. Future consumers will be paying more to banks for borrowing money. 

2. Investors perspective (Purchasing an investment) = Doesn't really matter

3. Do not highly leverage yourself with debt

@Andy D. Yeah it is pretty obvious that financing will be more expensive as time goes on. I'm still learning about all the different methods of financing deals. Seems like the longer you search to find a deal the more expensive financing will soon become as a result of the fed.  

@Bill Gulley 

Interesting.. So trends in the increase of rates is a more important factor to pay attention to. Janet Yellen has been talking about raising interest rates for a while now so I'm curious what amount it will rise to. 7-8% seems pretty realistic. Wouldn't a rise in interest rates mean good news for the average saver? Considering interest bearing savings accounts are practically nothing right now.  

Also what are your thoughts on the RE cycle that we are currently in?