All Forum Posts by: Jared C.

I don't believe my reasoning should be disregarded, but instead, seen as the tradeoff to cashflow.  I believe cashflow and months of inventory are inversely correlated in all markets.  If you focus only on cashflow you're missing half the picture.

"Buyer's/Seller's market" defined by months of inventory.

I believe it is best to buy in a seller's market, and sell in a buyer's market.

My reasoning: months of inventory creates price pressure.  Low inventory causing upward pressure on prices, even bidding wars.  Similarly, high inventory causes motivated sellers to accept offers below appraisal and prices are pushed downward.

I live in a seller's market (Seattle) and am preparing to invest in a buyer's market (Louisiana).  Now thinking about the price pressure, I'm reconsidering that plan.  I should buy what's rising, not what's falling, right?

Thanks @Patrick Britton - PropertyRadar looks awesome, too bad it's not available in Louisiana.  It's sounding like simply trusting a local agent is the best way to go.

@Patrick Hollis -

I'm pretty risk-averse.  I actually held the capital in bonds up until liquidating for this purchase.  

U.S. treasury bond yield is at 2.7% on a 30-year term right now.  That indicates market consensus.  If you can get better than 2.7% on a truly guaranteed return (such as avoiding interest on debt), then you're beating the market.  You'll find of all available asset classes, any with above 2.7% expected returns also come with higher risk.  For me, there's enough risk built into real estate, and especially the foreclosures I'm most interested in, that I don't need to compound it by taking a leveraged position.

Hi BP,

I was born & raised on a Louisiana farm, now developing software in Seattle and looking to invest back home.  Seattle's tech is booming and Louisiana's oil & gas is in a bust, it seems as good a time as any to move some capital around.

Data: http://imgur.com/a/5UR86

More importantly, my empty-nesting parents are interested in the part-time work and income from managing a property, and I'm interested in trying to start a business just to know the outcome.  Even if I lost money I'd be satisfied with the experience for them & learning opportunity for me.  Win/win.

Perhaps further setting me apart from the crowd: I've never held debt and don't plan to start now.  I have $200k liquid capital now, but think starting with a $100k property would be better.  I can always add more soon if it works out.  Thanks to my tech career & no-frills lifestyle, I should be able to pump another $100k per year capital into this Louisiana business, more if the business is profitable.  I might decide to take a leveraged position later, but for now I enjoy the relative safety of cutting the bank & associated expenses out of the equation.

So I'm feeling confident and have a plan.  Now my biggest challenge is finding the right property.  I'm really looking at foreclosures, because I'd rather it need some work than be move-in ready.  Zillow's pre-foreclosure search shows the most results, but the data isn't very clean.  Often, the auctions for the properties listed have already passed, or simply no additional information can be found online.  The best data source so far is the city's list of judicial foreclosures, about 5 to 10 properties per week:

http://webcivil.lafayettesheriff.com/csssheriffsal...

Unless I come across a better way to find properties, I'll just keep an eye on these weekly auctions until something in my price, condition, and location range comes up.  I don't mind waiting months for the right opportunity. 

Any tips & tricks, resources, recommendations for Seattle or Louisiana-based connections, are all very welcome!