All Forum Posts by: Nate R.

Yeah, you have to be careful about some of these. The Midwest is "stable" but has seen anemic growth. Texas, on the other hand, never really took a big hit. Demographics is key. Places where people are moving, with job growth and affordable housing will withstand a slowdown.

Let's get out the time machine and look at the history:

https://drewbecher.com/ups-downs-in-bay-area-real-...

Of course, these are median prices, which is somewhat misleading. During the last financial crisis, what happened was that high-end homes stopped selling, so sales of lower-priced homes brought down the averages.

In SF, the median price declined 23%, in Santa Clara, 37% and Oakland 60%.

Sympathetic to OP's views, and I've been thinking about this myself, but I wonder: what is the worst case if you buy cash-flowing assets in stable markets now? 

The experienced investors I know buying multi-family are not at all concerned about cap rates or market timing. Their view is that multi-family residential is recession-resistant and will continue to cash flow in a recession. So, why be concerned if the equity goes down. They keep getting paid in up or down markets. As long as the deal makes sense today, they can withstand an equity drawdown.

Trying to time the market, on the other hand, you incur the opportunity cost of having your money on the sidelines.

I don't consider buying homes in the Bay Area investing. It is speculation, since there is little or negative cash flow. The Bay Area is a volatile market and tech is in a massive bubble. I wouldn't buy there right now, for sure. 

Keeping the deposit is probably a violation of the state's landlord tenant laws. Even in landlord-friendly state, the penalties can be severe.

@Vika Bha: An alternative is a multi-family fund or syndication. But multi-family is a different beast with different pros and cons than single family, plus you lose full control of your investment.

There is tons of activity in Houston right now. Non-flood properties are in high demand.

@Aaron Rowzee You're still typing on your phone. I think you meant "incurred" not "inferred". Dang auto-correct! ;) No worries.

I agree the charges seem reasonable. It only seems fair to consider the point of view of the landlord, especially since this is a real estate discussion forum. :)

I talked to a property management company in Houston with their own rehab/make-ready crew and they said they're able to keep up with demand at the moment. From what I hear in general, projects are taking longer but work is still getting done.

I'm not looking to buy flooded properties, so at least I don't have to worry about the escalating costs of drywall. :)

@Wesley C.

@Kevin Wood

I'm in need of an estimate on some rehab in Houston (not hurricane-related). I wonder if you could point me in the right direction?