All Forum Posts by: Will F.

Pricing regulations usually backfire.  Rent controls and price controls tend to backfire.  As far as basic economics as others have said over-regulation in housing market leads to investors leaving.  Therefore theirs less housing.

This is unless the government starts building cheap housing and that's not happening either.

They need developers to create more supply and investors to fix up old housing stock (BRRRR method etc) and revitalize cities. That's not happening when ignorant politicians are responding to emotions rather than reason.

The more regulation and controls government have--for instant strict building codes, it scares of investors and makes existing housing worth more.  They contribute to the problem they don't understand.

It sounds counterintuitive, but in the long run, every economic study done (like 99%) shows that rent controls 1. don't work.  2. lead to less affordable housing (due to basic laws of supply v demand)

@Spencer Gray also these sorts of Government regulation are often what drives bubbles and DEMAND.  That's why you see so much capital in California real estate.  They push developers away and long term holders of RE can still benefit.  Either way, the state makes it 'hard to do business. 

And you said-- price controls lead to a decline in supply. To sum it up. These politicians are idiots and I fundamentally disagree with the red tape beuracracy they put on entrepreneurs and investors.

That all being said as a value investor who's in this for the long haul I can adapt and adjust to anything they throw at me.  In fact I can find opportunity when the regulation creates fear in the markets.

Rent control can have reverse effects on RE value then what one would think, when it comes to real estate.

Often in the long term Rent control leads to reduced SUPPLY.  Builders don't build in these neighborhoods like NYC, LA, SF, or when they do decide to build it's very expensive and the supply is reduced.  It's not really as bad as you think if you're in the game long term.  If you're in the game short term in-and-out and don't understand economics you feel the need to run 'to greener pastures'.

Even so Rent controls don't work according to 99% of economists.  They lower supply making properties more valuables.  The free market is stronger than the controls that local govs try to put on it.  But it is not fair and pretty bad 'fix' for most cities. Economists say that most price controls like Rent control backfire but the politicians don't listen to this... they only listen to 'what sounds good' 

All that beings said I am diversifiying into other markets while keeping the majority of my RE holdings in Southern California where I think the low cap rates make development and value add opportunities the BEST.  The low cap neighborhoods - you know those by the beaches- are the most desireable and low cap neighborhoods.  When you eventually sell (or refi) you want to be in a desireable area you will have more capital in a rent controlled area.  This is over the long run, not on the short run when people let fear lead to a knee jerk reaction to things like this.

Anyways, Real estate is about supply and demand.

Mike is right above that you can take advantage of these changes and usually come out on top if you know what you're doing.

 I bought at 140k a door  in a B- area and B building,  and am in escrow for another building at $100k a door in a B- area/  C-B- building [it's TBD since in DD period]

 The fundamentals of real estate and most things are simple. 

For real estate, Buy low, Rehab/repair/ add value/ operate efficiently and manage money/ sell high...

I started out by living under my means-drastically-and house hacking small apartments. It's simple but 99/100 people won't do what it takes.

It's all simple but people don't take action or do the work nor get fully immersed in this.  They think it's passive...it's not if you want to excel.

The habits of RE, like simply looking at 3-6 deals a day for 1000 days is simple, but people don't do it.  You end up looking at 3000-6000 deals and you buy 2-3.  It's all very simple.  People dabble in RE then realize it takes work and consistency.  Execution is key but people don't execute.  It's all very simple.

The more you know and the more you learn and you realize it's not all simple, but he fundamentals of BRRRR are simple... Then you do it 3-5 times and realize it's simple again.... you BRRR Buy low, raise NOI and sell/refi high.... forgot to mention work your *** off, live under your means and make good decisions.

To be successful you have to immerse yourself in real estate.  Or just don't do it there's other ways to make money then you can invest passively in RE (just don't expect large returns consistently)

I think sometimes it's easier to keep it simple in the beginning and just shoot for the high cap or the 1-2% return.  Brandon's advice is actually solid but it differs per person and their experience.  His ideas on BRR and ...it's prob better to be  conservative when you start AND during this timing of the RE cycle

IRR is internal rate of return

It's what a lot of investors and developers use. (though note it can be manipulated because it's based on a bunch of assumptions that you only can truly know through a lot of work or experience in that market)

Developers in my area like 2 cap areas near the beach. They return a 30-50% IRR which takes into account the time factor as well as the total return, not just the cash on cash holding return.

Like you can buy an 800k$ property (cash to make it simple and leave out financing which just puts fuel on fire for returns)  then put in $200k in repairs.  Then resell or refinance it at $2 mill 

Your Return would actually 100% Return on investment-- $1m capital invested with $1mill roi

Just throwing out simple numbers.

I've made 100% returns on flips in the past and often hit about 30% to 100% IRR

Thanks I agree I want to KISS (keep it simple stupid).  I've been using Google Drive/ Spreadsheets for a while and tend to lose track of things.

I just want to have reminders, background info, kind of like rolodex with notes. If it links to Gmail and iPhone that would make my life easier. I basically use Evernote, my iphone (and put notes on different people/landlords/ potential sellers/ landlords/people I network with) and google spreadsheets to keep track of things: apartment purchases, CRE brokers, resid agents, neighbors, network, contractors, homw owners, apartment owners, cleaners etc...

It's just very messy and contacts slip under the cracks.

But I also want it to be organized enough so that I can do some tracking and not lose good leads/ people.

Also what ever I choose I'll be spending time learning so I'd like to at least get soemthing that will help me do it and is simpler than Podio but has more features than GMAIL.

Zillow is the main place you should list apartments. It owns Hotpads and trulia

Followed by Apartments.com and finally craigslist.com

You can syndicate it out on certain websites as well to hit all the places-- hotpads.com, zillow,padmapper,  trulia etc

Vacation rentals as some suggested above is a different ballgame. I have tried it and just started it on 2 of about 60 units I manage.  It's a lot more labor intensive and requires more capital upfront to buy supplies and mange turnover.  I'd recommend it if you're in awalkable neighborhood or just want to get more income and don't mind doing a lot more work.  It's not as passive as landlording.

OK I'm buying Whirlpool machines $1600-1800  for a top/bottom stackable.  If it works out this month I'll try a second set for $1600-2800

https://www.lowes.com/pd/Whirlpool-7-4-cu-ft-Gas-Commercial-Dryer-White/1000822858

Example from LOWES

Unfortunately no reviews, but it has a 2 year material and 90 day labor warranty.  I'll probably get some form of extended warranty since tenants may beat this up