All Forum Posts by: James Orr

Thanks @Justin Foster.

> This is quite interesting and exhaustive!

Yes, the book is quite exhaustive (and did I mention... free?). I find the topic fascinating personally.

> I have numerous questions I would like to ask you - 

Sure.

> particularly in how you deal with constraints in your models as you employ a monte carlo method for inversions.

Right now you can make just about any variable for "properties" (single family homes, condos, townhomes, duplex, triplexes, fourplexes, apartments, industrial buildings, etc) change month to be any of the following:

1. Any set value you define

2. Add or subtract a "random number" to the then current value

3. Multiply or divide the then current value by a "random number" 

4. Set the current value to be a "random number" 

5. Set the current value to be a "random number" from a user defined defined normal distribution

You set the range of the random numbers (low and high) as well as a min and max for the end value (in case your fiddling would make it go out of range). So you could cap interest rates or vacancy rates or maintenance rates at mins or maxes to avoid weird results.

I tried to design it so that you could use it model the real-world as you see the real-world... not necessarily what *I* believe the real-world to be.

> How much control do users have over the ranges of these constraints???

A lot. A lot. A lot. Like... a real lot. :)

> or is it run as a completely open model? 

Not sure what you mean by "open model". You can do some pretty freakin' crazy stuff with it if you want or just read the free book and see my analysis of 10 different, pretty "vanilla" models.

> Seems like quite a sophisticated way of looking at this

Yes.

> and as you mention, worthwhile considering its our future at stake.

Totally! This is serious stuff. You should not *just* hope and pray especially when you can do some planning and reduce some pretty obvious risks.

> Reading through your book now and will look into your planner.

Sounds great. Let me know if you have any questions.

Hope you enjoy the book!

There are some videos here that demo three scenarios as well that I recorded with @Chris Lopez as a guest for his podcast:

https://realestatefinancialplanner.com/dire-1-of-3/

https://realestatefinancialplanner.com/dire-2-of-3/

https://realestatefinancialplanner.com/dire-3-of-3/

This is an image showing thumbnails of all the interior pages. It is packed full of detailed charts, explanations and analysis showing how to achieve financial independence using stocks, bonds and... of course... real estate.

Download all 240 pages for free right now:

https://realestatefinancialplanner.com/book/

Enjoy!

The best book on how to achieve financial independence using real estate is now available as a free download (no email required either) here:

https://realestatefinancialplanner.com/book/

While this was written for my son (in Madison) I am curious what investors from other markets like Los Angeles, Chicago, Houston, Phoenix, Philadelphia, San Antonio, San Diego, Dallas, San Jose, Austin, Jacksonville, Fort Worth, Columbus, San Francisco, Charlotte, Indianapolis, Seattle, Denver, Washington, Boston, El Paso, Detroit, Nashville, Portland, Memphis, ,Oklahoma City, Las Vegas, Louisville, Baltimore, Milwaukee, Albuquerque, Tucson, Fresno, Mesa, Sacramento, Atlanta, Kansas City, Colorado Springs, Miami, Raleigh, Omaha, Long Beach, Virginia Beach, Oakland, Minneapolis, Tulsa, Arlington, Tampa and New Orleans think.

I wish there was another real estate agent or real estate investor in some of the other popular investor markets like Atlanta, Memphis, Detroit, Jacksonville, Miami, Dallas, Houston, Tampa, Orlando, Kansas City, etc that have similar data so we can see a wider range of what a "low ball" offer (inside the MLS) means in these other markets.

@Aaron K. I just sent you the blog post I am working on that that has the breakout by price band (and days on market) as well to show you how you are more likely to get a discount on higher priced stuff.

But, here's even a different chart (not included in the blog post that I just private messaged you) showing both the average discount and the median discount for just the last 12 months in just one real estate market (Fort Collins, Colorado) broken out by price band.

@Aaron K. I did break this same data out by price range and, separately, for days on market for a blog post I wrote too. You're more likely to be able to get a lower offer accepted on higher priced stuff and stuff that has been sitting on the market longer (as I think many people would have expected).

Above is a chart summarizing all transaction history of:

- Properties sold in the MLS

- From 1997 through part of 2019

- Detached single family homes (no condos, townhomes or multi-family)

- Summarizing 6 different cities of data

It shows you a proxy for what the odds are of getting an above asking price, at asking price or "low ball" offer accepted and having it close based on actual data.

Of course, the specific property matters a lot, but this is a summary of all the data.

For example, in the chart above, only about 2.46% of all closed transactions we for 90% of list price or lower (in other words... you were able to get a 10% discount from list price even after the inspection and appraisal negotiations).

Looking for feedback on the new blog post we wrote called The Ultimate Guide to Low Ball Offers.

https://realestatefinancialplanner.com/low-ball-offers/

I am still finishing up a few of the last sections (where we show the impact of low ball offers when analyzing deals and on your entire investing strategy over time), but it should have a ton of info and data on low ball offers, how many get accepted and for how big of a discount, etc.

Any feedback would be appreciated.

Ideally, I'd love to get feedback for investors/agents in some of the more popular fix and flip markets like Atlanta, Houston, Jacksonville, Memphis, Detroit, etc as you all have a very different market than where I am from.

Thanks.

@Blake Van Ness Nomad™ is:

1. Sequentially buying houses as an owner-occupant often with little or nothing down (for example 0% down payment VA/USDA loans, 3% down payment conventional financing for your first purchase or two, 3.5% down payment FHA usually only when doing this with duplexes, triplexes or fourplexes, or, the most common, 5% down payment conventional financing)

2. Living there for a year to comply with the lender's requirement to occupy the property as an owner-occupant (typically for a full year with some rare, unusual exceptions) then...

3. Converting the property to a rental when you buy the next property (again usually with 5% conventional financing)

4. Repeat the process until you get the number of rentals you desire

It can be combined with "House Hacking" (renting out portions of the house/property you're living in like with duplexes, triplexes, fourplexes or roommate situations).

Some of the benefits:

1. Significantly better interest rates than non-owner-occupant

2. Lower down payments required (although you can do it with larger down payments if you prefer)

3. If you choose to do lower down payments, then typically more leveraged returns

4. Ability to buy in some neighborhoods that will not sell directly to investors (although rentals are not prohibited)

5. Ability to easily dollar-cost average or dollar-value average (depending on how you do it) into the real estate market every year with your investments

6. Can learn to invest and scale up over time

When you sell a property, there can be significant tax advantages to using a 1031 Exchange and rolling your profit in the property into your next property or properties. Instead of selling your property, paying taxes on the proceeds, and then reinvesting the net (after tax) profit, a 1031 exchange allows you to invest the full proceeds from the sale (before taxes) and defer your taxes until a later sale. In this episode we cover how to use this type of deal to further your real estate investing goals.

Welcome to the Nomad Real Estate Investing Podcast hosted by me, James Orr. Follow along each week as we tackle a different topic about real estate and real estate investing. Make sure you don’t miss out on our amazing content by subscribing to our podcast on your favorite podcast platform. Listen to 1031 Exchanges for Real Estate Investors on any of the sites listed below:

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