All Forum Posts by: James Z.

I do not. I was using general SFH sales statistics from my local realtors association though, perhaps I need to use MLS to drill deeper.

Hi all - I am trying to develop a more comprehensive understanding of the market cycles in my native Washington, DC area. I am new to looking at the direct numbers from MRIS (our MLS) and GCAAR (our local realtors association), and am trying to learn to interpret them independently without consulting articles. I am running into some snags that I'm hoping you veterans might be willing to help me with.

For example, I learned how to calculate the absorption rate, which to my understanding meters how long the current inventory would last. From this you can determine whether it is a buyers/sellers/balanced market. In this example, I took the # of active SFHome listings in DC proper (according to GCAAR reports), and divided it by sales per month. 508 / 298 = 1.7 months of inventory.....and I am told that 0-4.5 months of inventory means it is a sellers market.

If I look at recent articles on the state of the market in DC, it states that things are looking good all around for the real estate market. Inventories are up a huge amount from 2013, which to my understanding would indicate a buyer's market. So I find myself wondering how to reconcile these different market indicators. My neophyte brain says "Well that's odd that that inventory is up over 50% from two years ago and my calculation says we are still in a seller's market.".....which then leads to "so does this mean we were SO far in the hole that even with that huge increase, by 'normal' standards we would still be in a sellers market, and our perception is just different at this juncture," followed by "or is my zooming in only on SFH in DC proper skewing my image?"

Should I not use absorption rate for more "macro" stuff like the overall state of the market in our area? Are yearly/monthly differences more important? Are there issues of fixed vs relative perception here?

It feels a bit like finding puzzle pieces that fit together and then not being able to fit together any of the "chunks" of puzzle I have figured out thus far.

I'd be very grateful if anyone cares to address my specific issue. I'd be equally so for any tips, indicators, or different ways of looking at stats (MLS or realtor's association numbers) to determine how the market is working.

Many thanks!

Hey all - After talking to several people on BP and considering my future in real estate investing I decided to take a leap of faith, and today I'm completing the 60-hour prerequisite course to obtain my real estate license in DC. I intend to begin my new career as an agent before the end of 2014.

Below I am going to post a draft of the question list I have prepared for myself. If any of these questions are inappropriate, please tell me. Please feel free to share your thoughts on what impression these questions would leave upon you if you were interviewing me and I asked them. Is it too much? Or do they just make me look serious and prepared? I do not intend to read these as is, but make it conversational and use this list to keep me on track.

What kind of training do you provide?:

-how many days or hours? Is there a limit?

-is there a cost?

-who will be available to help me after training

-is there any kind of “shadow” program?

Commission:

-what is the beginning split?

-does it graduate as my production increases?

-does that graduation schedule reset after a period of time?

-average commission this brokerage charges?

Costs:

-initial, and ongoing

-do I need specific liability insurance on automobile?

Referrals:

-when might I get my first?

-how many per quarter can I expect once I prove my ability?

-source of them?

Listings:

-how many listings does the office have?

-aprox. average amount of listings agents in the office have?

Does the office have a focus on teamwork, or each agent operating pretty much on their own?:

-is there opportunity for teams? Or a working partner?

-I may need to work part-time for my first 3 months, is this possible and what systems are in place for this?

Do you have weekly sales meetings?

-day/time?

-do you have property tours?

Are there extra rewards to be a top producer in the brokerage?

Office goals

Dress code

What kind of marketing and technology assistance/tools I get, and if they come at extra cost?

How many full and part time agents do you have?

Is there a full-time receptionist/secretary, and do they provide me with clerical assistance?

Many thanks to anyone who is willing to critique my list.

Also, if anyone has recommendations for good brokerages to join in the Washington DC area I would be grateful. I'm currently aiming toward somewhere that can give a new agent the needed support base to succeed. I currently intend to interview with Long & Foster, Keller Williams Capital Properties, and a few smaller ones.

@Jonathan F. I am a fairly new investor as well, and I before long I pretty much threw the 2% rule out the window. It seems like the only people who are getting those rates are people on the outskirts of cities and suburbs in the Midwest. I recognize I'm jaded though; the Washington DC market is notoriously horrible for making any cashflow. Most local investors I talk to feel lucky to get their rents to .6% of the purchase price/month. I think it's all about the appreciation and equity in most cities. So for what it's worth, I don't think you're doing anything wrong by not finding those rates.

Thanks everyone for the specific information.

Thanks all, this gives me faith that my plans for investing will fit nicely should my new job op in Portland pan out.

And quick thinking @Dawn Brenengen , I'll see if I can slap a bird on my new business card :D

Thanks @Chris Shepard...

That genuinely makes me happy to hear. Any advice on neighborhoods to look at closely? I am not too familiar with the area, and I rarely hear anyone talk about the RE up there, so even some general guidance would be a big help.

Hey guys - I did a search for topics in Portland and Eugene and it was mostly introduction threads, so hopefully I am not repeating any old topics. I have developed some interest in that part of the country (outside of RE), and am curious about people's experiences with real estate there. I personally tend to lean toward buy and hold SFRs that cash flow at least a little while they build equity, with an eye toward eventual appreciation.

I did some research on Portland and found that there is lots of real estate on the cheaper side (especially compared to my miserable DC market) in the eastern more residential parts of the city, and also reasonable real estate in the suburbs. 

I also have kept an eye on Eugene, which seems to be developing their "downtown" area into a very hip mini-portland. 

I'm hoping somebody has some deeper insight than my website research can provide. Can decent rents be found there? Does their unique regional government structure (METRO) affect the real estate markets in any real way? Am I missing something? Numbers there don't look like anything terribly special, but they look good enough that I'm wondering if it's about to get an influx of investors.

@Jon Holdman  Thanks for getting things back on track, though I did find the catfights invigorating and informative! I hear your warning loud and clear...I'm a very cautious and conservative person with my money, so when I do have the kind of capital my friend has saved up I will not let go of any of it until I have what appears to be a sure deal.

@Richard C.  It's good to hear that you're managing to do well despite non-ideal conditions where you are. As for me, my market is very volatile and extremely expensive, and honestly I don't think it's a good place for me to start my investing career. I hear good things about Baltimore though, which is a drive-able distance for me.

@Tara Piantanida-Kelly I think being the bank would be a great move for him, if he wants to make some money while he takes time to learn the ropes (which I feel obligated to suggest to him, if he decides to do anything with the info I feed him)....also the apartment idea is interesting to me personally, should I get that kind of capital. I've always been drawn to the idea of apartments, but feel like it might be folly to set my sights that high before I have some SFH rental properties beneath my belt. I've been weary of apartments because of the prices in my area...using free websites like redfin etc, most 5-7 unit apartment buildings, that look hideously run down, are about 60 years old, and are in bad neighborhoods that are NOT appreciating, sell for a million dollars plus in my area. I suppose that again, I need to look farther out.

The tax lien/notes ideas are also interesting, so thanks Tara and @Frank Buono  for bringing that up...but I don't fully understand them yet, and have heard repeatedly that one should have some good real world RE experience before experimenting with those. If I'm not ready for them he's definitely not.

I'm honestly kind of surprised by these responses, thus far my education has lead me to believe there is little cash flow in SFH, and that they are more about just building wealth over decades. From what some of you are saying it seems like if you look in the right places you can get a fair amount of both of these goals. My original question was regarding someone else, but it seems that the answer to it might suit both of our needs.

So thanks everyone for your input...but by all means keep going if you want, I'm learning a lot from this.

Sorry for my late response, was typing that just before @J Scott  posted.

I was hesitant to suggest rental property, as I think the DC market has skewed my understanding of rental properties....to my understanding (I am rather new though) 15% cash-on-cash return seems very difficult to achieve, without driving an hour+ from the city. Maybe that's just the answer.