All Forum Posts by: Kenny Simpson

ok great, if I can help in anyway let me know :)

Would anyone be interested if I hosted a FREE webinar/training on how I use VIDEO, SOCIAL and Email  to generate lots of business ?  Just curious?  I do lots of one on one in San Diego?

Quote from @Koree Scott:

Last year I bought my first house hack, a 4/2 SFH in Escondido, CA. My plan was to either convert part of my sunroom to a living space, or convert the attached garage to an ADU. I've seen plenty of posts about how ADUs are a poor investment, given the lengthy permitting/construction process, and how they usually receive low appraisals when completed. However I also have a massive 650sq ft sunroom. My thought process is that I can convert part of this sunroom (where the dining table is, about 150 sq ft or so) into a bedroom, and potentially add a bathroom as well. Currently it is only used as a dining room, and my girlfriend will be using the right side of it, about 230 sq ft, for her small business. I'm currently renting two bedrooms for 1000 & 1050, so I would expect to get around 950-1050 for the added bedroom. The garage is 460 sq ft, and I would expect to get 1400-1500 if it was converted to an ADU.

Would you consider converting the sunroom to be a better option? From what I understand I would still have to add a vapor barrier and insulation to the sunroom, but I haven't yet talked to any contractors about all the work that would be required. I've also read about how adding a bedroom can potentially ruin the 'flow' of a house, so I would like to be mindful of that. Any advice would be appreciated!

Thanks in advance!

If you an ADD more units it is always a win long term. More doors is better. ADU companies can be much more expensive if they do the work sometimes. Get the plans/permits done and then maybe sub out yourself and save $$ as owner builder. Long term in San Diego it is hard to lose on long term rentals.

 Hi Lili are you looking to invest?  Are you a new real estate agent?

WOW, lots of great post and talking points.  Keeping watching the data and hopefully NO crazy surprises on the horizon.  Time as we know always tells the story or reveals the Truth.  The good old government can always make things more interesting as we know. LOL :)

Quote from @Dan H.:

Quote from @Kenny Simpson:

WOW, it is crazy how divided articles, economist, housing experts and the media are so split on this TOPIC?  I am seeing people that I know or follow that study data say "it is a buyers market".  I am also seeing articles, news, etc. from smart people say we are going to have a 2008 like CRASH is some markets?  They seem to be talking about a hypothetical future based on guessing because I do NOT see the data supporting a housing crash.

                                                                                                      What do you THINK?

Lets look at the DATA:

Properties on the market.  As of Dec 2022 it was 970K and about 200K + were in escrow

Borrower profile:  The higher the number below the easier it is to get a MORTGAGE, so HIGH is BAD.

ARM products: Many ARM loan were option arms, neg amortization loans, had teaser rates for 1 or 2 years.

Debt to income:

Foreclosures and short sales:

 My belief is you’re looking at the wrong stats.  The stats that depict increasing risk of decline are the commercial MF.  If they fall non commercial residential will be impacted.  

Why do I have fear about commercial Mf. It is because they have shorter terms. Any one year a significant percentage of MF need to get new financing. With current rates, the existing low cap rates result in negative cash flow. This is not the negative cash flow of a SFR. a 100 unit property could have huge negative cash flow with the new financing. Who wants to buy such a property? Someone with big financial pockets that can handle this large negative until rates decline or rents increase enough to alleviate the increase in interest rates.

As for San Diego, the last numbers I saw show prices down 8% from high but winter months have a natural decline so I will use 5% decline (let’s wait to May numbers to see reality).  However in high end homes, the decline is greater. I am leery of small sample size but I know of a seller that turned down $2.4m ~1 year ago that just closed at $1.65m.  The high end homes have fallen significantly, but the entry homes are holding their value better.  

Hill street blues: Let’s be careful out there. 

 I am talking about 1 to 4 units, I DO agree the high end in SD has seen a decline, but what I am as you can see many other are seeing a pick up demand from buyers, rates headed lower and inflation as well.  Inventory is very low as well.  The market overall is seeing homes that were recently listed priced to sell, buyers see this and that is why we are seeing 5,10,15 + offers on deals.  I see it everyday with my clients, agents I know and agents around the country.  Time will tell for the 1 to 4 space.

I agree with you on the MF, the debt market for MF is terrible, so many banks NOT lending at all and if they do, they don't want to lend.  They are confused by what is a building worth, are rents flat or declining, lots of syndicators did bridge loans that are coming due on top of just normal loans that will come due.  Banks can park money with the FED and make 5% to 6% with ZERO risk.

WOW, it is crazy how divided articles, economist, housing experts and the media are so split on this TOPIC?  I am seeing people that I know or follow that study data say "it is a buyers market".  I am also seeing articles, news, etc. from smart people say we are going to have a 2008 like CRASH is some markets?  They seem to be talking about a hypothetical future based on guessing because I do NOT see the data supporting a housing crash.

                                                                                                      What do you THINK?

Lets look at the DATA:

Properties on the market.  As of Dec 2022 it was 970K and about 200K + were in escrow

Borrower profile:  The higher the number below the easier it is to get a MORTGAGE, so HIGH is BAD.

ARM products: Many ARM loan were option arms, neg amortization loans, had teaser rates for 1 or 2 years.

Debt to income:

Foreclosures and short sales:

We are well on our way for 2023 real estate market, buyer demand is up, sellers are pricing properties more accurate, 30 year fixed rates are down from the 7.375% PEAK and inventory just dropped below 1MM nationally.  On TOP of that, inflation, consumer wage are coming down and JOBS market still seems to be hanging on.  10 MM job offerings out there.

In the last week I am seeing 5,10 + offers on houses and buyers that waited for 2023 are excited to get out there and purchase a home.  Buyers are smarter with ALL the media, podcast, YouTube, data and overall access to information to see what is really going on in the market for their own knowledge.  They are expecting a good deal, seller credits towards closing cost and items to be fixed or a credit toward repairs when purchasing a home.  For some buyers this reality is changing because there is more competition with buyers and some buyers will close without credits and repairs done.  

What are you seeing out there?

Yes there still is that FEAR spread, if that goes away rates will be high 4's for us or 5% on conventional and government loans FHA/VA mid to lower 4's

It seems that LONG term mortgage rates and Inflation have peaked?  Fed funds rate/Prime rate still has room to go, 50 to 100 BPS.  10 Year Treasury hanging around 3.5%.   SEE some charts below.  

What are your thoughts?