All Forum Posts by: Samuel Chua

@Samuel Chua

Look, I’m not sure what kind of answer you’re looking for. No one has a crystal ball to know exactly what is going to happen and how. But personally I plan to just keep doing what I’m doing - build up cash to invest, foster relationships with private lenders and commercial lenders and agents, and buy for cash flow.

It’s really pretty simple and I think the best investors don’t just sit around waiting for the perfect market timing, they set themselves up to win regardless of market conditions.

@Samuel Chua

Look, I’m not sure what kind of answer you’re looking for. No one has a crystal ball to know exactly what is going to happen and how. But personally I plan to just keep doing what I’m doing - build up cash to invest, foster relationships with private lenders and commercial lenders and agents, and buy for cash flow.

It’s really pretty simple and I think the best investors don’t just sit around waiting for the perfect market timing, they set themselves up to win regardless of market conditions.

@Samuel Chua

How would you know the value of the property after the crash? You’d have to make too many assumptions and guesses.

You should base all your investing off what you know RIGHT NOW, based on current conditions. Then stress test your cash flow to make sure you can withstand a 20%-30% drop in rent or vacancy of 20%-30%. And also have plenty of reserves.

Apply that same logic whether times or good or bad and you should be covered.

@Samuel Chua mild inflation is good for real estate. Rents go up with inflation and property values go up with inflation. the problem is with very high rates of inflation costs may go up faster than rents.  The best way to protect yourself is with deals that have enough cash flow to cover unexpected expenses or inflation of costs.

Sounds like you are trying to find the ARV or after repair value. For single family homes you need to compare it to other homes in the neighborhood or 'comps'. While your rehabs will improve the value of the home they will not make your newly improved home much higher than other comps in the neighborhood, even though the other comps might not be as updated. The comps will hold back the value of a completely remodeled home. If there are homes down the street that have similar square ft, lot size, bedrooms and bath numbers that sold within the last six months... you can bet these homes are going to drive your price. three houses in the neighborhood sold for 200K? Great you can bet your newly fixed home won't sell for over 220K and if it were me, I'd assume I can't sell my newly fixed home for more than 200K.

Knowing this number is critical before buying a fixer, estimating rehabs etc. (You already know this), since you want to make sure you're not going to lose money by the time you factor in your rehab, purchase and holding costs (taxes, electricity, etc). 

Sites like Zillow etc are good free sources for ball parking home value. But the best way to do this is to use your county assessor to determine what the comps in your neighborhood sold for over last three to six months. Of course if you have access to the MLS or a realtor friend they can give you data on comps.