All Forum Posts by: Kevin Hill

I wouldn't get those inspirational words on a t-shirt, you're going to lose it when the market tanks. 

We have had low inventory in my area for a few years now. Once this up cycle ends, we'll see more inventory, then eventually a buyer's market. Not looking forward to that! I remember showing a client 100+ houses during the last buyer's market because they were so overwhelmed with choices and they always thought there might be a better house on the horizon that they were willing to wait for.

@Joshua Moyer the numbers have to make sense for you. If you plan on being in the house for awhile and love the house, pull the trigger. Just don't buy for the sake of buying. Realize you'll probably need to ride out the real estate cycles and have to wait until another hot market to sell. My friend sold his house in Butler in a day. 2 families everywhere are going fast (if priced properly). 

It's all over the news, real estate prices are jumping up. All the residents of New York City are escaping and moving to New Jersey. Homes are selling fast. So recently and often, my friends say to me, "you must be super busy right now". I wish I could say I was super busy juggling a ton of listings, writing up contracts for buyers, and closing deals left & right. I'm busy, just not with sales right now. I know this is strange, a Realtor not portraying themself rolling in commission checks and bragging on social media about their latest listings.

For one, I have become mainly an REO agent over the past 4 years. Due to COVID-19, the Bergen County Sheriff's department and throughout New Jersey, have put all foreclosures and evictions on hold. As of this writing, sheriff foreclosure sales have been delayed to at least mid-October 2020. I suspect this is going to get pushed back even further due to government intervention. Foreclosure rates have been way down so far in 2020. It takes a long time to foreclose in New Jersey, so the effects of mortgage forbearances, unemployment, overpaying in a hot market, and homeowners cashing  out all their equity will take a few years to show up on county sheriff's foreclosure dockets.

Another reason are sales are actually way down. Let's check out the statistics (from the New Jersey MLS). These are the stats from 2019 to June 2020 in Bergen County:

Total single family sales are down 12% (3126 sales down to 2,749)

Total 2-4 family sales are down 28%(!) (347 sales down to 249)

Total condo sales are down 28%(!) (1205 to 868)

The large decline in total sales is due to the lack of available inventory and that in part is helping to drive up prices. Simple lack of supply leads to increase in price. Mortgage rates are also very low. More Bergen County stats:

Average single family home price has increased by 12%.

Average 2-4 family home price has increased by 11%.

Average condo home price has increased by 4%.

Yes I am busy, but it's with lead generation. Contacting my database, writing blog articles, posting on LinkedIn, posting on social media, driving for dollars, creating direct mail to send to homeowners in default, and valuations. All dedicated to getting new listings, because there is an overabundance of buyers, but not enough homes to meet the demand.

I don't think its a bad plan. There is a debate for Bigger Pockets for years whether an investor should get their real estate license or not. At least you'll learn about contracts, have MLS access, be able to schedule showings yourself & have lockbox access, and have access to MLS statistics so you can research markets and activity. BUT, I don't think its an ideal time to become an agent, but I got licensed in 2008, a terrible time for residential real estate. Just keep in mind it might take you awhile to get your first sale and you'll have startup costs like E&O insurance, MLS fees, board dues, etc. Make sure you join a brokerage that offers good training because what you learn in real estate licensing school doesn't train you on how to be a good salesperson.

$750k in Union City for a 2 family is crazy! I saw this one on Zillow today in Union, only 1 bedroom in each unit and listed just under $1 million!! https://www.zillow.com/homedetails/516-518-27th-St-Union-City-NJ-07087/38942178_zpid/

I love that strategy Jon! Sell high, buy low!

Investors are posting creative videos about their methods for finding deals, the numbers on their deals, and telling stories. Tik toc is gaining older users now, not just teenagers posting dance videos. If you use hashtags like #realestateinvestors you'll find their videos. Its a good tool to create the videos then cross post them on Instagram, Facebook etc. It adds an element of entertainment and increases attention. Gary Vaynerchuk has been hyping it too as a useful tool for entrepreneurs. 

I wasn't speaking strictly about flips. I am seeing 2 family homes selling so high (we also have very high taxes in NJ) that have no chance of ever cash flowing. And since they are being sold so high, they also don't have much chance of appreciating in value, which you can never assume it will appreciate when you buy. 2 families that only have 1 or 2 bedrooms on each floor. 

I know people are big on the BRRR strategy, but cashing out all your equity in these market conditions is crazy to me. What if you have a long term vacancy and can't pay the mortgage? It often takes 6 months or more to evict a tenant here in New Jersey. Right now, you can't even evict someone with the Governor putting all foreclosures and evictions on hold until at least mid-October (most likely will be longer). If you can find a multi-family deal that cash flows in New Jersey (1% or 2% rule is very hard to find), then pull the trigger! That good deal will most likely have to be an off market deal with a seller really motivated or not educated on the current market conditions.

Many of the foreclosures I get, the homeowner did a cash out refinance at some point when the market was good and were now $200k underwater. Many investors got their asses handed to them during the last downturn when they were overleveraged. History repeats itself. Everyone likes to say "things are different this time." I remember people saying condos in NJ will never go down in price because there is such a demand for housing. In actuality, condos were the first thing that went down and many still haven't reached their 2007 prices.

I think things are too fluid and risky right now for an inexperienced investor. I'm not saying sit on your hands and do nothing, but do your research and be ready to buy when the down market comes. That's when many riches are made.

Loving the discussion by the way, thanks for all the Bigger Pockets members for reading and the comments. Lets keep it going!

Good points @James Hamling! We all to adapt to the conditions and think outside the box for sure in times like these, but many times history repeats itself in the real estate cycle. After foreclosures dried up, I have had to shift my business focus and marketing techniques until the next wave of foreclosures happens. Best thing a newbie investor can do is come up with new methods for lead creation. I see some creative things being done for real estate on Tik Tok believe it or not. I embrace new technologies, as some parts of real estate are still behind the times.