All Forum Posts by: Account Closed

There is a 70% probability of a 6.0 to 6.5 earthquake in the next 7 days off the coast of Washington following the current 3 week long "slow slip" event happening in the Olympic Range to Vancouver Island. Notice, it is 70% not 100%. But, with those odds, I prefer to plan accordingly.

@Jay Hinrichs I don't see that you are concerned about the $200 trillion in unfunded liabilities and the $20 trillion in national debt. These are the most pressing forces on future real estate prices. I think I did leave out Texas. My mistake. Texas property taxes are very similar to Washington's. I invest in both places. 

Washington has an ADDITIONAL fee of 2% of sales price when you go to sell a house. That is, 2% of $300,000 sale is $6,000 excise tax to the state from the seller. Seattle has instituted a LAW whereby you Must rent to the first person who applies. They are conducting "sting" operations to sue those who don't comply. My heart burn with real estate property tax is that it is the simplest way for the government to confiscate personal property of those who have paid off their property but at some future date can't afford to pay property tax. Okay, that and 401(k)s are susceptible to government confiscation as well. Watch your 401(k) be taxed to death or disappear altogether. Not pleasant and nothing you can do about it after the fact. 

When I mention subject to I am assuming not everyone on BP reads every post of everybody who ever posted. Only those who are interested and find this thread would have any interest in looking for alternatives. I believe that is what this thread is discussing. Threats & Solutions. ;-)

A good letter from an attorney to enforce your rights will go a long way. It puts them on notice that the "gig is up" they face possible lawsuits and that since a lawyer is involved you will have records for any court appearances. 

I have sent letters "very carefully worded" letters, that explain that I have detected inconsistencies in the agreement that I am about to engage a lawyer to investigate and generally that solves the problem. Send it certified, to each party, and tape a copy to the door. 

f course, I like my "bad tenants" shaken, not stirred.

I only forecast out 5 years to 8 years basing most of the forecast on current geo-political and imminent or likely natural phenomena. Global change is a natural occurrence that is too far out on the timeline to impact my real estate investing. I stick to population growth, job growth, migration, political unrest, changes in governments, changes in the velocity of money, changes in the transfer on monetary wealth and of the method of transfer (exchanging commodities vs electronic funds). 

As we proceed from using commodities for wealth storage, to using dollars, to using Bitcoin and other forms of digital currency (ACH, electronic transfers, iPhone payments, PayPay, automatic bill paying), it becomes easier for crooks and to steal and governments to confiscate  the wealth.

Real estate has the advantage of being very hard to duplicate, forge or transfer electronically. I am talking about the actual real estate not the Deed. The disadvantage is of course, that you can't put it in your pocket and take it with you as you move your business to a new location. Governments can increase the property tax to outlandish amounts like in California, Washington, Maryland, New York and other states. They've shown that they are likely to do so in the future to try to cover their massive unfunded liabilities.

The solution that I have found is to use "Subject To" for purchasing properties. I rarely own them for more than a few months, selling them to "Tenant Buyers" who give me 10% down and I cash flow the property. Since it is the new owner's property, I have no roofs to replace, upkeep or AC Units to pay for. In the event one of the aforementioned disasters happen, I am"liquid" and move my business to an unaffected area. It allows me to invest my profits in a wide variety of areas and commodities reducing my exposure to foreseeable yet unstoppable forces. 

If one of the "Tenant Buyers" stops paying, the property reverts back to me and I sell it to a new "Tenant Buyer" at a market adjusted price. My joint venture investors are likewise cautious with their money and we put together an exit strategy that incorporates the high rate of return and lowered risk of "Subject To" that reflects the changing dynamics of real estate exposure.

Plus, it's a lot of fun to buy properties.

@Nikita Khambe I wouldn't take the deal. Why not just do "Subject To" to the seller and when you sell the project they get cashed out. My student partner in Austin and I just bought a 3 bed 3 bath in Kyle for $100 down and took over the payment, a few thousand for "walking money" No investor needed, no fuss. (The end profit is $40,000)

Get the forms from another investor in the neighborhood and forget the attorney for investing purposes. I can't imagine a form you would need that doesn't already exist.

The real threat is the $200 trillion in unfunded liabilities and $20 trillion in national debt. That money will have to come from somewhere or be bankrupted. With real estate you can find renters to cover the mortgage (usually), with gold no such source of income exists. Gold is a "catastrophic" investment for wealth preservation. Silver is much more "liquid" and can be easily traded for bread and butter.

The Stock Market will remain strong for the next year and a half as stock investors from around the world look for a better place to put their money. There is a LOT of Cash on the sidelines waiting to be invested.

Chinese were driving up the property values in Canada but have moved to the USA since Canada instituted a 15% surtax on unoccupied real estate. Chinese are investing in USA real estate because the Chinese economy is in worse shape than the USA, but is hidden by 'fake paper assets". Real estate in USA will remain strong for the next couple of years. As Brexit causes money to flow to the USA it will prop up the USA dollar and investments here. None of this solves the national debt or unfunded liabilities and eventually the USA Govt and Counties will increase taxes to meet the pressure. Property taxes will rise considerably. It is a good time to buy real estate for the next few years especially if you use leverage. But, be prepared for rising costs.

It is probable that North Korea will either start a war (if only by accident and miscalculation) or that the USA and / or China and Russia will pre-emptively attack North Korea to quell the threat) This would result in North Korean bombing of either Washington State or California as "proof" they are capable of raining destruction on USA. North Korea has 10,000 drones capable of carrying chemical and biological agents that could be released from a submarine off the coast of L.A. or San Francisco. North Korea is working on a ballistic missile which would cause an EMP attack over the western USA shutting down the entire power grid. Water filtration, gas pumps (no gas available for cars or food transportation) the Internet, lights, refrigeration would all be offline for months while the grid is brought back on. The USA does not stock the necessary transformers that the EMP attack would burn out. They are built "on demand" in China and shipped to the USA. It takes a year to order, build, ship and install each transformer. Hundreds would be needed. Clearly, real estate prices would be depressed at that time much as they are in Fukishima from the earthquake/tsunami nuclear meltdown. People will leave the destroyed and contaminated areas and have to live elsewhere driving prices up in the "in" migratory areas.

If a solar flare occurred like the "Carrington Event" in 1859, the results would be the same.

If the Cascadia fault erupts (which is projected to be a 9.0 earthquake and is now over due) Seattle, Portland and Vancouver real estate prices will drop dramatically along with the destruction of large parts of the cities.

The New Madrid fault is over due for an earthquake and depending on the severity could have similar results.

For these reasons and others, I choose to invest "Subject To" for "cash flow" in safe real estate backed investments spread over four states to minimize my exposure and I take my "equity up front" and invest that in various other commodities.

And, the sun will rise tomorrow and I will be prepared for any eventuality.

The obvious factor is "Time". It always takes longer, costs more than expected. You can make up the $$ but you can't make up the time. I can do 5 "Subject To's" in 5 months and make $100,000 without contractors, zoning, delays, carrying costs, banks , weather delays, decisions on paint colors, decisions on tile for the upstairs spare bathroom, etc, etc, etc. I've done "ground up" and "Subject To" is better. ;-) But, if you like "drama" build from the ground up.

If you have to ask if it is wrong, you already know the answer.

How good is the investor? Have him show you 4 or 5 deals he did from start to finish. Don't waste your time with great theories. Have him show you proof and that includes the address and the HUD statements.

That depends entirely on how the offer was written up. The seller may want an option fee or maybe not. With the super hot market (over heated) in the Vancouver area, why would the seller want to do the transaction? It should be easy for them to just outright sell for cash. If they don't want to list for some reason or don't want to pay a real estate agent's fee, that would be understandable. However, you have a little risk if you give a lot of money for an Option fee (I always offer $100 but in your market it is unlikely to be accepted). If the market crashes, you could lose your option fee because you can't find a buyer, or maybe if you misjudge the house's value and you can't sell it for a profit, you have that worry. But, transactions like that are done all day long in Canada and the US.