All Forum Posts by: Irina Belkofer

Originally posted by @James Han:

This is a bit off topic and might provide better insight for flips but i consider warzones to be one of the most profitable areas to be in. To many of yalls points managing in warzones is usually not a PM's first priority...especially those managing over 100 SFR houses. However, there are a couple of key benefits of buying in those areas. First you can buy low and take in higher cap rates to start. Second, if you buy in the correct pockets you can expect appreciation where selling at a premium should be no problem. Flip that into a 10-31 and buy your next one in a class b or go back and double down on 2 more on your next warzone opportunity.

As mentioned above, the definition of “war zone” would help.

There is no appreciation at all, to sell is a problem, leave alone on time restricted 1031 exchange.

War zone: think boarded windows on first floors, no decent cars parking on the streets, trash and overgrown grass on lawns(if any). Everything looks neglected and dangerous. If it’s slightly nicer - it’s D neiborhood- not war zone. It’s where you literally risk to get a bullet in wrong time of the day.

The ROI should be closer to 50-60% and rehabbing is permanent.

Tosell it for what you bought is a challenge already, not to mention higher than that.......unless you buy up whole neiborhood and revitalize it....good luck with that

Originally posted by @Pamela LEE:

Just a few thousand off list, so are they waiting for list price  ?  Keep putting in offers until I get some feedback ? The last buyer's agent never did hear back from the listing agent, so we dont need to worry about that ? How will we get word, if he wont respond to us ?

Most likely, they posted low price to attract the buyers but waiting for their specific number. Listing agent has nothing to do with the process, he just listed this house. It’s not 2009-2012 any more, it’s the sellers market, they can and they will get top price.

Most houses go higher than asking price, sometimes ridiculously higher. Auction.com is notorious about that: there was a listing for $60K+ in an area with $200K, REO and in very decent shape. Obviously, there was bidding, however, the house was on the market for few months. I asked my client to check out how high needs to be a bid to at least get a counter offer - he got a counter only at $164K. House get sold for $185K.

Minimum bid has nothing to do with the price they are willing to sell for. In this market every REOget sold for higher than asking price. Last house my client bought was $6K higher than asking $66K - almost 10%. Still was a good deal

If this is an emotional purchase (and it sounds like the one) you have to keep rising the price until you meet some reaction from the seller. 
 

Calling to RE authorities would be some kind of retaliation.

Off course, it will help to get out of this contract but there won’t be any deals with that wholesaler or maybe some affiliated to him.

I'd rather checked out why the seller agree on 20% of what the house worth in this condition? Or is $200K ARV and you need another $70-80K in improvements?

I'd do all the inspections including structural engineer, search title if the seller is the legitimate owner, definitely would clear the title chain and ask few brokers for their CMA/BPO. It might sound too complicated but you might be wrong about ARVas well as the seller might know something about the house which makes sense for him to get just $40K and walk away.....after all, you might end up not with light cosmetic improvements but serious structural damages.

Anyway, someone is wrong in their estimate: you or seller. Wholeseller might know but he won’t disclose (he’s not licensed to do so and neither is seller under these circumstances)

Just check out EVERY detail and if you don’t want the property after all - the Division of REis working 5 days/week

“Typhoid Fever, Typhus & Tuberculosis: Are L.A.'s Medieval Diseases Coming To Your City?” Many people consider moving out of LA - it looks like third world countries and the problem is getting worse. This article was published at Forbes, people who live in LA or visiting are frustrated.  I wonder if there is any solution to that

@Andrei Zamfir such things as Great Resessions don’t happen too often: look at the history charts. 2008 was the worst after 1929 but there were quite few recessions - it’s normal for markets to cool down.

In last downturn rents didn’t drop - the prices stagnated. Vacancies increased because people were loosing their jobs. However, people Didnt Rent their houses - they’ve lost them, so there were plenty of overqualified Tenants. The major problem was to find these who kept the jobs.

Rentals with good quality were still rented but these dumpy one were empty - when someone was qualified for a rental - they got to choose.

Also, the problem caused last recession was in fraudulent mortgage securities, which is now heavily regulated.

Next crisis will be due to different reason: student loans, pension not funded etc......but with RE market that under supply of houses, it won’t happen overnight. 

I bet that market will still be riding for the next 5 years but if I lose - well so it will be a recession but is it going to affect everyone or just some specific groups of people? 

Bottom line: if numbers make sense - still good to buy. Just don’t fudge the numbers, be honest with yourself.

If you think you shouldn’t buy - then maybe don’t 

First of all, you have to live somewhere and renting is paying someone else mortgage.

Then, if you buy house cheap, get it updated while you live there and sell much higher, your capital gain is not taxable up to $250K or $500K for MFJ. You can repeat it every few years, let’s say every 5 years you have $500K in income you don’t have to pay tax on! 

So, if your own house made you money - is it an asset? Besides, you can write off your home office expenses from your taxes, deduct your mortgage %% and property taxes if you itemize etc....and if it's paid off - you get HELOC to buy rentals.

It’s a liability only when you buy a house in hot market, overpriced and do updates which is too personal (won’t Ina se the resale value). If you’re an investor, you’ll be smarter than that, at least with your first couple houses, you’ll live in

1. I’m not flipping houses, I might sell some of my rental when the market peaks or I might keep them.

2. I'm talking about ROI twice higher on SFR vs MF. You are talking about IRR. Give me the definitions and then we can compare apples to apples....so far it's a nonsense discussion

3. Not sure how being a broker makes me say anything - we are discussing different rental markets: Cleveland and Honolulu might be totally opposite . I just give my opinion why investing in MF in Cleveland doesn’t make sense FOR ME - I bet there are plenty of people in Cleveland who disagree.

4. I don't see how you avoid PM with your investing style - you just pay for it, not like these properties manage themselves. You can pay to manage your SFR as well and not lose the faith in humanity....lol

While SFR are twice more profitable than MF, I'll buy them, if it's change other way around - I'll buy other way around. My analysis is not based on some predictions which don't stand time.

Timing is the best and the market is not correcting right now. Even with all economic indicators, we have another 1-2 years but I believe it’s not going south until 2024....so I’m playing accordingly. 

When you look at interviews with your “demographic guru” and track the timing- you’d see how he always exclaim I was always bullish but now the crash is coming! It was predicted in 2014 and in 2016 and even now.

Properties I bought in 2015 tripled in price and Rent is up 25-30%. The properties I bought in the end of 2017 now could be sold for the double price. MF are still get you all the utilities for their residents, rents higher with market but not as close as SFR, and you can't flip them, making 30-40% ROI.

Can't say about STR in Cleveland obviously but my clients who buy Airbnb in Florida, selling them now because taxes and maintenance killing the profit. The very same people keep their SFR in Cleveland and buying more. For me, it's much better prediction that any guru capitalizing on his particular niche and scaring people off market when it still have quite some time to make money.

Originally posted by @Account Closed:

I think about this all the time. You should read the book The Demographic Cliff by Harry S. Dent. This is why I won't buy any single family residential properties. Only commercial multifamily and rental arbitrage through Airbnb.

Did you read this book prior to 2014 or after, when the predicted "the worst downturn and crash of your lifetime" for the early to mid 2014 still didn't happen? I wonder how people predicted all these crashes in writing will be justifying why it didn't happen? Especially to people who didn't buy any SFR based on their "prediction"

Originally posted by @Karen Jackson:

@Mark Pleasant I’ve reached out to her via text about my frustration and she has Ignored and disregarded my messages. Yesterday when I addressed her about it in person she became very irate.

File eviction. Don’t talk to her.

You have to train Tenants starting at first phone call - when they want to rent your property.

Right now it looks like you’re asking her to give you the key and she doesn’t give a damn about you.

I’d already change the locks and gave her the address where to receive new key with amount owed for the change.

People do what you let them do to you: one time you let them disrespect you, it will be going south from there.