All Forum Posts by: Justin Thorpe

RE has much better fundamentals. If you look at the ration of ARMs, ARM resets, total equity people hold in their homes, LTV's, all those metrics are overwhelmingly in a better place than 2008, its not even close. The X factor is if unemployment starts to climb quickly and people get behind on payments. But it is not easy to "create" unemployment given the backlog of jobs we have right now. So I'd say rest easy.

NOW if you are one of those who "did a lot of crypto" then I may have a different message for you. 

On top of that, any cash that is held has lost 8.6% of it's purchasing power.

That is a misnomer. Just take the stock market or crypto or other asset classes that have been hit OR even RE in some geo's as it softens, my cash is definitely not worth what it was 1 year back but it is worth more in relation to the these asset values that are falling 30 - 50 - 70%. So my humble advice is build out that cash pile. Most of the savvy wealthy people I know started to trigger selling Q3 of last year and have gotten into cash big time since. Smart money is in cash. Not sure if that window is still open but cash is king. 

Dont know this guy but know enough to stay away from get rich quick ideas. 

Real estate is hyper local. Parts of the country have done exceedingly well in terms of appreciation and many more have stayed stagnant to shown muted appreciation. To say RE appreciation is a myth somehow will be a term that gets used by folks who have invested in stagnant markets and seen little to no inflation adjusted returns and that is most of the country. Similarly, to generalize and say RE appreciates 20% / year annually might be a mindset held by investors in high density coastal markets especially levered to tech and the new economy. Again, that is a local isolated case and not a nationwide or global phenomenon. 

As I read through this thread, the central theme seems to be "I live (ideally sell) in area X, so I advise investment in area X". 

In other words, it seems everyone's backyard is a paradise for investing. 

The framework is clear. The bay area has, is and will likely be the best returning geo over the long term. But the barriers / cost to participate are very high. This area does not need some artificial impetus like a "pandemic" to prop its prices up. That IMHO is like a steroid shot for some geo's outside fo the area but lord knows how sustainable it is. 

Barriers to entry are high but there are always deals available and that takes a whole lot of time and effort. But I feel it is worth it. The short cut is to pick an inexpensive midwest town and buy 3 properties or 7 and tell your friends you own so many units. 

Sure that could work as well but it will come with its set of pros and cons. Appreciation will be a question mark and plus the burdens of managing properties remotely. The bay area on the other hand has always surprised me. I have listed expensive large properties thinking darn who would rent this when I am asking five figures. Then I get this barrage of calls from expats, companies moving execs, people going through home renovations, people moving from overseas etc and the home is rented in 3 weeks!! Such is the power of the bay, the demand here is very strong and solid. Again barriers to entry are steep but finding tenants and getting a nice fat rent check is very possible. 

I built mine in the bay area and that started in the depth of 2000 recession. My reasoning was simple, if I could win here and build a portfolio in this area, I could afford anything anywhere. I am not sure if an investor looking to start things today should do it any differently. 

Arizona has run out of water, Nevada is running out of water, Florida has water but it is now too expensive for people to afford. That means people are likely going to migrate back to CA and NY.

Has to be overwhelmingly different and in favor of LTR.