All Forum Posts by: Michael Wooldridge

I've seen quite a few things in my lifetime that I NEVER thought I'd see, but this one would be up towards the top, for sure. I mean, are you saying that people will flood out of California, Texas, and Florida and head to Cleveland or something?

people and job is leaving midwest too lol

Job market is still incredibly tight just looking at LPR. Texas and FL have seen a lot of growth but in general jobs aren't tough. And that will continue since we have so few kids these days.

To me the real question is where is next. Remote work is here to stay even the companies trying to force people back to office, are still quietly shutting down leases left and right. So if remote work is not only here to stay but grow. Where is the next big market?

Texas has gone up a lot in median prices. Carolinas have been growing quick although I think we'll see more growth there. Georgia probably has room for more growth also. But the reality is the states like FL and TX that have grown dramatically are starting to hit that national median, SLC has exceeded it so their growth should slow some.

After this economic hiccup (no idea what to call it) there should be some more mass relocations. The question is what market? Midwest has some interesting possibilities. I personally wonder if arras outside of Nashville would be ideal. Idaho seems perfect to continue the strong growth it's had. Kanasa and Kentucky seem like ripe states if they developed them appropriately, especially to grab from the Northeast.

Big money to be had if you can get in early wherever the migation hits..

Some data:

https://realestate.usnews.com/...

https://www.rocketmortgage.com...

1 Vote

Dallas, Texas

Quote from @James Hamling:

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Quote from @Michael Wooldridge:

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Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Notice how all the chanting of "crash CRASH" has now shifted hard into reading tea leaves of "it's coming, IT'S COMING..... someday" lol.

In 2020, somewhere in America, there was a bearded, weary old warn out guy who threw off his sandwich board sign, did a jump for joy, yelling and hooting, grabbing people saying "see, SEE, I TOLD YOU SO, you all laughed at me. year after year, decade after decade, but I KNEW IT, when Nixon got thrown out I KNEW any day those damn ____ were gonna get us with a virus" LMAO.

Know who sits the sidelines and waits for things to happen, SPECTATORS. How many games you ever seen a spectator win, yup, 0.

Feel free to lie to yourself how spectating will lead to playing in the game, by all means reduce competition, I appreciate the profits from others non-participation. But don't try to get me to chug your arsenic kool-aid with ya.

Market appreciates, I got strategies for that. Market stagnates, I got strategies for that. Market drops, I-got-strategies-for-that. I'm a Pro-player, rain or shine, hot or cold, I play the game and score goals regardless of conditions. The conditions are just part of the sport. If you only play on perfect sunny days of temperate temps between _ and _, when humidity is under _, blah blah blah, lol, well hell you might get "A" game of two in before ya die. Good luck with that.

But I suppose, some truth that if you never play you can never lose right. You can also never win, never get better, never move forward. No thanks, sounds like a miserable life.

Hey, remember that guy who never risked? Yeah, neither do I, or anyone else.

there's huge difference between headline narratives and trendline narratives.

This is BULLISH:
- Dollar is 3 months low
- Dow is 9 percent away from ATH
- Yield is dropping below 4 now and mortgage rate is crashing 50bps to 6.6
- Long term bond got the highest record # of bid
- Vix at all time low
- corporate America is giving higher guidance for the whole next year
- active real estate in US MoM inventory is ZERO, this is extremely bullish for stable price action LOL
- 25% of real estate purchases are cash buyers and they keep buying more every month.

Just a month ago, all indicators above signaling a bearish market. not sure why people unhappy

I won’t be happy until I see 2023 rental income similar to 2022, if it is, I’ll build more.

Even I'm not expecting that more like 5-7% down. Well assuming you mean first half of 22/last half of 2021. I assume we are talkign about STR of course.

More profit is always good but I need to do something with cash. I guess the alternative is you could go into the markets but it's hard not to see the current run up as a bit of a bull trap. But then I'm just honestly comfortable with real estate I know how to not lose money there. Stocks have too much variance and no passive so I just don't care for it - not to mention more write offs with housing.

STR is a whole different conversation, COMPLETLY different everything.

First off, STR is NOT Real Estate Investing, it just is not. STR is as much real estate investing as a car wash is REI, or a McDonalds is REI. STR is micro-HOSPITALITY business. It has vastly different factors to it.

Not to mention the plethora rushing into the segment with little to no clue what the heck there doing, and then making a race to the bottom with prices to try and overcome their ineptness in running a hospitality asset.

We have mass flooding of the market in not just offerings but also poorly ran units. There absolutely with 100% certainty will be various "Crashes" in the STR segment, hyper localized in there expression though, and extremely short-ran durations.

And it's a GOOD thing, it's a growing pain, a coming of age for the STR industry and segment. It's the STR gold-rush and just like the Yukon most will go bust for the market to find itself.

I have multiple of both short and traditional. It’s statements like this though that’s put you out in left field.

If you had said hey STR has attracted people who have no clue what their doing - like the 2006 run up did on flippers - then I would agree. THere are plenty of investors who have proven STR is investing. Hell if nothing else the high end luxury market at $70k - $100k a month for beach front or at nation parks proves it. BUt yeah STR is not investing…. 😂

Read what I wrote, not how you took it.

I was very clear that STR is NOT REAL ESTATE Investing, and it's NOT. It is Hospitality Business, and thus, Hospitality Investment.

The word investment is used way too liberally. Real Estate Investment/investing is a specific terminology with a specific meaning, which STR is NOT part of. STR is a Hospitality Business. One can "invest" in a hospitality business, yup, and it has a component of real estate, but it is no more real estate investing then it is furniture investing.

Ehh I look at it differnetly. There’s the investment portion of the business which you are still investing ina property. And then there is some hospitality. Frankly I farm it out - it’s just easier so that I’m just managing numbers.

But not so sure why you would throw out the entire investment portion of the property. It’s not like you aren’t look for appreciation even if you are grabbing more cash flow.

In Real Estate Investing; the real estate itself is "the" investment. The asset is the business. There is the business component of renting out, conveying use of the property, or doing some change to the property to re-sell at profit, but follow that the business is the property itself.

STR is NOT Real Estate Investing, because while there is a property, the business is not the property itself, it is the Hospitality. The property itself is not leased by people. It is the FURNISHED property, the location, the packaging. I get it, it does seem much like real estate investing but ask yourself this, is Hilton a real estate investor? No, they are a business, just like McDonalds. They sell a service, the service sold is a user experience.

In real estate investing we "sell" a product, not a service. The "buyer" uses the product in connection to other actions.

Again, STR has a real estate component, but the real estate itself is not the whole, just a part. The real estate is simply where a person provides the service that customers purchase. One can do STR without ownership of the property, one can do STR with a tent, or even just raw land, I have seen these.

Also "investing" is different then "an investment". GM makes "investments" in it's robotic assembly line systems, right, but those are just assets to perform the construct of making there final product of which they sell. The "investment" is a function of the business. In STR the property is similarly just a component of the "production" to make the final product which is a service. Hospitality is a Service industry, not a product industry.

Real Estate Investing is an asset industry, more similar to ownership and trade of stock.

Think of the operational aspect, STR is an active business operation. It requires a continuous active day-2-day operations.

There is many many aspects to this but end of day it all boils down to the defining difference that STR is NOT Real Estate Investing, it has a component of such, so STR can and most often does incorporate Real Estate Investing but it is, not in and of itself, REI.

Real Estate Investing can utilize STR. But again, each is distinctly separate.

This is a BIG part to the whole calamity in STR many are getting into. Not all, many are great at STR but I assure you all ro near to all of those doing well in STR "get-it" that STR is a Hospitality Business.

Similarly, a 200 unit community in MFH is more then just Real Estate Investing.

It's a distinction between an active B-2-C business, and a stand alone "investment".

Maybe more said to say a standard rental is 90% investing and 10% business operation, and STR is 90% business operation and 10% investment. Look at the allocation of actions over say, 5yr span. In STR those actions associated with the real estate is a very tiny portion of the whole. It's a 1 time event/ action and the operating of the asset, it's the everything, right. In a standard rental it's a passive action, setting a user contract and walk away. I know, there is PM but in fundamental PM is an over-sight activity not an active action. There is brief windows of active actions but let's look at say a 3yr lease, over the 3yrs there is maybe 14 days of active actions at most when figuring a standard 8hr day and going by labor hrs of input. Honestly, the ideal window is 8 labor hrs per yr of leasing. yeah, ~$100mnth of PM does not purchase a whole lot of labor hrs. How much is the average service provider in real estate, yeah, around $100 per hr billing rate right.

I get it that this defining line is hard for many to understand or see the distinction of, but this is a major defining line of difference and it's why the BIG impacts of results stand. We have people jumping into STR thinking, incorrectly, it's real estate investing, and then suffering for not comprehending the very active business operation aspect and trying to do it passively.

And on aspect of hiring management, I can buy a restaurant and hire a GM to run everything, it does nto make it Real Estate Investing, it is food service. The real estate is a component, how one acquires the real estate, positioning, it will impact the business BUT end of day it's not the product, what is being done at the site of real estate is the product that dictates profitability.

In REI, the asset itself dictates profitability. In STR, the service itself dictates profitability, a great property can do poor performance in str disconnected from the property itself.

Picking up what I am putting down?

Ehh I I’m picking up your nit picky as hell yes. I get it I just think it’s stupid.

1) if you get into STR and don't relative it can be more active work than a traditional you are an idiot.

2) My traditional is more work than the STR because of the management firms I use. And my traditionals aren't much work.

3) Your argument over real estate investing comes down to degree of work which is frankly a meaningless line.

Frankly real estate investing is any property you buy used for a long term investment. How you operate that investment whether it's traditional, business, MF, STR is an independent action from the property investment itself. It can add more value to the investment but it's just a business.

your line drawing is beyond odd too me any way you slice it. And I'm not sure how in your mind you justify that because it's traditional are low operations (if you screen well) it somehow is investing but because STR require more it's not a property investment. It's just odd.

0 Votes

Dallas, Texas

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Nicholas L.:

@Michael Wooldridge

agree. there is such demand for them in other industries and other states.

we've gone real macro in this thread!

anyone have anything on... real estate prices? =)

As Carlos said it’s flat. Everybody is sitting tight for some directional input/shoe to drop so to speak.

That said a bunch of My network saw a bit of a mini-spike this week with the drop in rates. Arms hitting 5%, seems to be creating a temp uplift. Will be interesting to see if we see a bit of an uplift.

I've been monitoring various zip codes for more than a decade now. What I realized is some local market is behaving more sensitively to macroeconomic factor compared to other markets. This is very intriguing. For example, when the Fed did QT during 2018-2020. The growth in the bay area is practically flat although interest rate deviation is only moving up one to one-half percent. Compare to Austin in the same period, it has a more sustainable appreciation before the price explosion in 2020. What's also interesting is to monitor job growth, found out recently that the job growth is actually flat or slightly declined on the coast, while increasing in quite significant numbers in the Southern state. I think this could explain why TX is primarily having a stronger housing market.

Thought it was generally known that people have been leaving the west coast and north east? It’s not just texas but Colorado, Florida, Georgia, SC/NC all growing pretty heavily.

What will be interesting is where is the next migration? Colorado, TX, Carolinas housing prices all at or above median. So where do people go next?

0 Votes

Dallas, Texas

Quote from @Nicholas L.:

@Michael Wooldridge

agree. there is such demand for them in other industries and other states.

we've gone real macro in this thread!

anyone have anything on... real estate prices? =)

As Carlos said it’s flat. Everybody is sitting tight for some directional input/shoe to drop so to speak.

0 Votes

Dallas, Texas

As to tech lay offs. This is an example of why people in the field aren’t worried about it: https://finance.yahoo.com/news...

Billionaire tech investor calls programmers 'the most scarce commodity on the planet'