All Forum Posts by: Jon Q.

Yes, lumber prices experienced some crazy swings (way up then way down).

Yeah, people who have investments @ low rates don’t see many alternatives of where to put the money, so they’re holding.  That coupled with asset inflation across the board, not just real estate. 

Are you still in the Charleston Area?

Still holding that Richmond lot in the Bay Area?

Where else are you buying land?

 Thanks Brian. Great to hear from you after the last few years!

Of the ones you’ve sold, were they heavily equity partner owned or fully owned by you?  In other words, based on your strategy, it appears that you believe prices will drop to an attractive point where you think you’ll be able to acquire similarly attractive deals again at similar prices?

For many reasons, many believe that this drop will be nothing like 2008.  I suspect that pricing though will come down over the next 12-24 months and we’ll see the bottom, prices likely won’t come down to where most savvy investors expect.  Therefore new ways of adding value or making major tenants may be necessary to provide the returns we’ve generated over the previous 10-20 years (ex 20-40% returns).

My sell discipline is pretty strict. As in, I don’t like to sell unless there’s a change in things I can’t control (like crime in the neighborhood).  The reason is that in all the markets I’m in, I don’t think I’ll ever buy property at the prices ever again… prices in the string population + job growth markets are sideways “s” curves with increasing trend lines.  Therefore I think investors strategies over the next 10 years will have to evolve in order to generate similar returns we’ve been used to… or we simply expect lower returns going forward.

I haven't sold or acquired anything over the past 24 months. But I’ve been making select improvements and increased rents throughout the portfolio by 30-40%.

I’m showing up cash and raising capital to begin making acquisitions again post bottom … likely 12-18 months from now.

And yeah, running marathons (San Diego in June), backpacking trips (state high points on west coast), and leisure trips to Hawaii, New Zealand and other spots where I’ve been wanting to spend time.

What are your thoughts about the current market, the timing of the recession and rebound and expected price drops we may see?

@Brian Burke

Experienced investors, those with 10+ years of investment experience,…

How many deals have you completed over the last 24 months?  If you’re not actively doing deals, what are you spending your time doing? Property improvements, fundraising? 

Thanks for responding.

 That makes absolutely no sense. Don’t do it.  4 Plex is residential loan, 5 plex commercial.  You’d destroy value by doing that.  Also, it’s a management hassle already and no professional MF property mgmt company will want to manage a 5 plex unless you’re in San Francisco or New York City.

better to improve it, increase rents, cash out refi it, then acquire an actual commercial property that is much larger than 5 units.  The 5-30 unit space is problematic for many reasons, but primarily financing (commercial lenders don’t like smaller loans) and property management (pro managers don’t want to manage small properties).  So if you go multi family, go bigger than 30, preferably bigger than 60 units. 

Careful, most or all of these mentioned will experience little to no appreciation. Appreciation results from population and job growt, so FYI: coming from riverside, these are not high income note high quality areas.  Also, be prepared to deal with problem tenants… and you better figure out a property a management solution that works.  Your financial success, if you achieve it, will depend on that. FYI: property mgmnt is 90% tenant selection.  

Don’t trust anyone, especially those with a conflict of interest, and even me...
and time your purchase and acquire after the bottom, which should occur in approximately 12-24 months.

these things are not necessarily bad, but things you should be aware of.

fyi:
I own and self manage rentals across 8 cities in 5 states for last 20 years.

 Message me. I may be willing to speak to you briefly to point you in the right direction.

I’ll actually be in riverside this weekend for a running race.

 By allowing a freeloader or free rider, you’re not helping either party long-term. Them or yourself.  To think otherwise is shortsighted and not adequately understanding the business you’re in and responsibilities of being of service and enabling you to scale that service to others.