All Forum Posts by: David Jarvi

I attend the local REI group (meets in palm desert)

https://www.meetup.com/cvreia/

they are putting on this event in may..fyi

http://millionairemakersnextgen.com/

1.25-1.50 percent...  with the larger focus on capital gains.

cash flow has always been kinda a wierd thing to focus on..  the focus should be on getting out of the rat race (in the game I play). and any tool/tactic/guideline that gets me there is good

For me, I wanted cash flow from real estate because it felt REAL to me. (unlike hoping for 6% from the stock market).  I played the RichDad/Poor Dad board game.. and wanted the cash flow to get out of the RAT RACE.

IF that is your goal (to get out of the rat race), THEN  I would HIGHLY recommend you take a look at Mr. Money Moustache ( a financial blogger) and the sledgehammer he takes to the financial media that you need 3Million dollars to retire,etc...   or whatever it is nowadays.

2-3 paid off properties paying 1200 month (after expenses)... while living in a paid off house (or sprinter van.hehe) .. GETS you to retirement/out of the rat race using Mr. Money's #'s!!!!   woohoo 

Kiyosaki advocates GOING SLOW (look at lots and lots of deals) I get instant alerts on redfin and then do additional research on propertyradar ($50 month) the equivalent of ABC (always be closing) in sales is ABE "always be evaluating" 

honestly, I think it becomes rather OBVIOUS over time what a good/great deal looks like.

Building/Buying 4 plex out of state could be a reallly good move though... as new construction attracts better tenants and would have little maintenance/headaches

Good luck...and remember... the most inexpensive house/houses could be the EXPENSIVE house.

• Mortgage Loan Qualification Guidelines are VERY different than 2007/08. (currently ridiculously hard to qualify for a loan)   - 2008 will NOT be repeated
• Land/Water Rights are finite resources & yet Population continues to rise & yet very few NEW cities are being created.  Some city councils are pro-growth & some are not.  Growth will happen, but in specific areas 
• $15/min hr wage is LAW in California by 2021 (currently $10.50/hr) OR $1600 increase in family income/mo for dual income 40/hr week earners. - RENTS ARE GOING UP
• Mexico continues to build new factories & border security will increase slowing immigration.   Wages will increase for first time in 20 years for contractors & it will be harder to secure the BEST workers in the area.
• Yellen said she expects to raise interest rates in 2017 (the OPPOSITE of Greenspan) - One-off investments will slow, but large capital MF projects will continue (as the BIG banks need to deploy large amounts of cash)
• Historically, a recession has happened every 8-10 years or so (73ish, 82ish, 1993ish, 2001ish, 2008...and?? ) - ODDS are something is going to happen!
• In California it is expensive to BUILD NEW on large projects (soil/perc test, permits, electricity/etc...) - - but money can be made by smaller home builders. (onesy.twosey lots)  - HUGE opportunity for remoders to become builders
• AirBNB businesses are artificially inflating certain areas. - More REGULATION IS COMING
• Disability Payment benefits have doubled in the past 20 years ( 1 out of ~15 people (2 out of 10 in west virginia apparently) are on disability.  (receivers can qualify for a loan, btw).  Renting to Disability rental income receivers seems like it could be better than section 8 going forward
• the USD (CASH) & real estate is considered a safe investment by international investors relative to international currencies/options. (we live in an international investment world now) -  International Real Estate Brokers should market themselves better. 
• Capital Gains exemption for Middle Class Earners is being considered by Trump administration -  Great opportunity to specialize in small time flips/rehabs nationwide and win more deals

good article in DesertSun  Dec 28, 2016

http://www.desertsun.com/story/money/real-estate/2...

...

2. The hot high desert. Home prices in Joshua Tree and neighboring Yucca Valley climbed about 30 percent between summer 2015 and summer 2016. The boom, local real estate agents and residents said, is most pronounced among tiny cabins and sprawling ranches out among the high desert's boulders and Joshua trees. Of course, many of these properties have also become vacation rentals. But after several years of write-ups in architecture and design publications, plus Pioneertown in the New York Times this year, locals said the secret is out.

"For us, the deal was, we can find something relatively inexpensive and fix it up and not break the bank... but like any good thing, when people find out about it, it starts to change," said Frederick Fulmer, a former flipper who now operates four vacation rentals.

I consider 30K making money.. if you do to, than yucca valley will absolutely work for flips

Landers is hot right now for some reason as well.. 

realtors tell me that 29 palms has amazing deals (But I just don't want to drive there)

I would say avoid the bad and very good parts of town... and just focus on bread/butter properties.   buy 2/2 for 60-70 and flip for 110-120  and 3/2 for 100-110  flip for 145-165. 

Sewer Assessment Phase 1 costs are right around the corner... so be aware of that.. and be aware of "flood zone" properties.. which buyers will have to pay $1700 a yr extra for insurance

fascinating insight, thanks.

amazing how many angles/perspectives there are in real estate

$750 yr for an llc in california, but...certainly could work for the right multi-family

Quit my job 3 months ago & am doing real estate deals full time.  (thank you, thank you as I take my bow)

The majority of the rentals I have were put into the mix 6 months ago. (although I have 2 that are 2 yrs old)

The lenders I've spoken said they need to see 1 year of P&L on all these rentals - as I would need to fully qualify on the passive income they produce... before I can qualify to do a "cash out refinance" on any of the properties.

Does this sound about right to everyone?

Perhaps there might be "direct/portfolio lender" out there with different guidelines?

Geron:

3 Ideas... 

1) The best gift from government (IMO) to the middle class...   is that they allow us to sell a property every 2 years TAX FREE.   thus.. you can buy a house for 100K put 20K into it. sell it for 220K and keep 100K.    this is the equivalent of working a job that pays 75K every year. (and netting 50K in taxes every year).   you can rent your property  (I think a good experience to do at least once) and then sell it anytime in the next 5 years.

a potential problem is that you are continually living in a construction zone. (ok for most men, but not women ;)

2) BRRR (you can search this site for more details on strategy. (you can go find another property to live in (even renting).. get a renter in your place... and then refinance... if it appraises for 220.. you'll get a chunk of change (above and beyond what you owe )

a potential issue is that you're not going to beat 3.5% rate.

3)  Joint venture...  because your wife is a realtor, you'll have the inside track on some deals...  perhaps someone at the club with fixer upper experience... will be willing to go in with you on a deal 50/50 on a quick flip.  Convince them that they won't have to do much at all.. you'll do all the legwork & they provide the mentoring.  I wish I would have done this early on... and am very actively considering this option for a more expensive flip (500K+)

good luck!

Hi Dan:

I've been doing some research as well... and yes not seeing great deals there... I have seen a few condos for 60-90K (w/ HOA of ~200/mo) and you might get 850-950. I'm seeing a steady flow of foreclosures (20% still underwater on mortgage overall) - so my initial hypothesis is that it's a more of flippers market... maybe 10-20% margin on the low end stuff w/ potential higher margins on luxury flips (600K+)

based on my research... homes in good condition priced below 200K are going very fast (locals who don't want to "miss out")   green valley/summerlin are where everybody wants to buy... with anything near the mountains being "ok"...  (northwest/southwest communities are getting buyers as well)  median price is around 215-220K overall... and hasn't really budged in awhile.  

Vegas continues to grow though (around 2% a year)... new IKEA store, new hockey team.   and I would bet that Vegas will land a few big corporation relocations in the coming years ( like Phoenix has done)  because of california regulations/fees on homebuilding, tax rates, etc...it seems like Vegas will continue to get spillover from California for the next 20-30 years.    

that said... the crime stats are alarming in greater vegas, the economy seems very flimsy, 50% of casino economy dependent on international tourists, and the competition seems to be fierce for "sub-prime" renters.

I think there are still a lot of smaller Tier 3 type markets all over the west (including in Nevada) better than vegas.... but vegas does have the allure.. like a casino enticing you into a game it knows you cannot win over the long term:)