All Forum Posts by: Kyle Gregory

So obviously I'm not going to argue with data you looked up so we'll just have to agree to disagree on this one. I can guarantee you that in my field of engineering, where salaries for anyone with any significant experience out here is commonly in the 6-figure range, that there is a difference between here and Ohio. I could be wrong but from my experience, there is definitely a difference in this field and this is the industry that contains the bulk of the jobs. The demographics are different than Ohio - we have less blue collar more professional positions which means higher wages. Something has to explain the ability for most professionals to be able to afford not just $500k houses but $1mil and up. Two simple examples: 2 houses went up across the street from me last week - they each were open Saturday and Sunday, had roughly 150 people through each of them and both are now pending with multiple offers. $1mil asking for 1200 sqft. and $1.1mil asking for just over 1000 sqft. and I suspect each will go for over asking price. These are not investors buying, these are people like you and I who have normal jobs and are just looking for a place to call home.

Salaries aside, you didn't even address any of the other issues that I mentioned also play into the cost of housing. Sorry, but a 1500 sqft. house in Ohio will never cost the same as coastal California nor will it cost the same as a condo in New York City. There are many factors beyond salaries and you need to consider those all together in understanding prices not just now but in the future. I guarantee you that any smart investor would pay $500k for just a 6000 sqft. plot of land without a house in some of the better neighborhoods around here or even other areas of the country. Yes, many parts of California bubbled just like the rest of the country but some areas will always be able to hold a minimum value due to the many factors I mentioned. Show me a $500k house in my neighborhood and I'll show you the best investment you'll ever make.

I don't get how someone who reads this board could ask this question.

I guess I am one of the crazy lunatics on the left coast that would pay $500,000 for a two bedroom house. Actually, we paid $500,000 for our 2BR bungalow a few years ago and made $185,000 in profit to buy a $750,000 two bedroom condo. Call me crazy but it's a penthouse overlooking the ocean. I would rather live here than a 5,000 square foot house in the middle of a midwest cornfield. Or I could have bought 4-5 blocks of houses in Detroit instead of living here.

People pay the prices they can for the homes they want and can afford.
Thank god there are all types of people earning all varieties of salary or everyone would be living in the exact same place.

Well the contract came in today.. I offically bought $29,9 for $14,0. Amazing..

crpell,

I am also from the country and hate the city. Your best bet is to take a drive on a nice warm night in the area that you want to invest in. Stop the car and roll the windows down. You can tell a lot just by the sounds of the neighborhood at night if it's a place you will want to work in..

strive,

No reason to applogize, I just like to keep my fishing holes to myself.

I am just wondering if anyone has tried the $5 a month rent collection method and any ideas if they think it would be valuable.
Thanks,
Richard

Since it seems like the 2% and 50% rule (suggestion, dogma, opinion, etc) can't coexist, I think I'm going to try to use the 2% thingee. It just seems like right now devoting half my rental income to expenses without factoring in mortgage payments seem a little high.

Here's the kicker. The seller has two other properties on the market on the same street.

Here are the details:

Property #2
5-unit Apartment
Gross Monthly Rent - $2,610
Asking Price: $195,000
My top offer Price: $130,500

Property #3
5-unit Apartment
Gross Monthly Rent- $2,025
Asking Price: $179,000
My top offer Price: $101,250

All of the rents seem undervalued. I was looking at comparable properties last year, they charged approximately $485-525 per unit. Meaning the gross monthly rents for each apaprtment would be $2720 on Property #2 and $2650 on the second.

What do you think?

Again, thanks for your help. I don't think I have any more posts after this. This forum is incredibly valuable.

Matthew08

So I can't speak to any "Flip" episodes as I don't generally watch that show but I can speak a little to the CA house prices. Prices were sky high here well before the dot com boom and bust and depending on neighborhood, not only are those prices still supported but they continue to rise. I used to rent a 2-bed house in middle class San Jose 10 years ago and the owner at the time sold it for around $450k. That same house today probably could fetch $700-$800k. It's not speculation - it's a shortage of land (and thus housing) in an area that is desirable to live due to weather, culture, etc. with a highly skilled and well-paid workforce. There's no shortage of people that can easily afford $500k with the "average Joe's" being the ones who tend to rent in the area, double and triple up in apartments, commute from far away where prices are cheaper, live in the more dangerous parts of town. Remember, pricing is really set based on what the market will bear in an area - and all areas of a city or regions of the country are not created equal. Of course the same house in Ohio is worth less than in California - the weather is different, the pay scale is different, the amount of available land is different, and on and on.

I would pay $500k in a heartbeat if a house in my neighborhood was available for that and turn a big profit in short order. It's not that it's an especially nice neighborhood - just average ranch houses on small lots - but the market will bear prices anywhere between $800-$1000/sqft all day long. Most people don't buy for speculation at these prices but rather for a place to live which tends to keep prices stable and in fact rising - at least where I am.