All Forum Posts by: Scott Passman

@Brian Hughes  "I would say 80% of the crowd of supporters there was somewhere in their late teens through mid 20's"

This is an interesting observation because it does seem like a lot of the push for these policies is coming from the younger generations as part of the social justice reform that has been a major topic recently.  The problem is I would venture to guess that only a fraction of millennials on down (disclosure: I am in the millennial generation) have any real conceptual understanding of what socialism actually is and how its policies effect society as whole.  The idea always sounds appealing (wealth for all, everybody is equal, no more haves and have nots), but its reality is that everybody will be equal....just equally poor and stripped of their rights while the government is freely given absolute control.   

This is a little tangential but it's in line with this topic, I see a lot of conversation now about lowering the voting age to 16.  This is terrifying.  To think that as soon as next year we could have 16 and 17 year old kids who have virtually no real world life experience and minimal contextual understanding of past policies, economics, national history, etc. swaying election results is only going to push even more short sighted agendas that have a good tag line but don't have the fundamental framework to actually solve the real problems. Like @Account Closed stated we already have a growing problem of individuals assuming that it's a fundamental right for them to be financially taken care of by others.  Allowing kids who have never had to be financially responsible for themselves vote and determine policies is only going to further ingrain that because they haven't had the opportunity to see how the world really works.  There are a lot of smart kids out there who can make a real difference in their community and our country, but that doesn't mean voting laws should be changed as there are many other ways they can contribute. 

@Marco Chaidez Best is a vague word. I assume you're asking which method can help you acquire properties for the lowest price in which case cold calling is almost always going to give you a better opportunity to find a bargain property. However it's also a lot harder, time consuming, and tedious. You have to find and generate a list of owners with phone numbers, make a lot of phone calls, and keep doing that until at some point in time you call the right person in the right situation looking to sell to you. It's a lot more time consuming and difficult, but it's always cheaper to acquire a property that isn't on the open market for all to see and bid on. An alternative to cold calling would be a mailing campaign where you send out letters to your target sellers and try to get them to call you. The MLS is a lot more convenient, but you have to sift through a lot of properties to find one that is a good deal, and even at that you will have to act quickly because everyone else is watching the MLS too so you will have a lot of competition to get it tied up before someone else does.

@Brandon Rush Paying for coaching isn't really about the knowledge they can share with you which, as you mentioned, you can find for free on the internet and right here on BP.  Coaching is about paying for access to their network, resources, wisdom over time, and for someone to take time out of their schedule to dedicate to you and help guide you to success.  Nobody necessarily NEEDS coaching, but if you can find the right mentor there is no doubt it can accelerate your trajectory and increase your chances of success.  If you decide to go that route, you just need to vet your coach/mentor very carefully as @Abel Curiel alluded to.  

What happened to the basic understanding of supply and demand? I didn’t grow up in a financially savvy household, but even as a kid I remember having a distinct awareness and understanding of supply and demand and its impact on prices. There is so much discussion and legislation going on in our country about the need to implement rent control through major metros, and even state wide, in addition to how our government needs strip away landlord rights such as basic screening and ability to evict tenants out of their own personal property. This is INSANE. We are already seeing property owners in places like Seattle and New York moving out of the market or going through the process taking rentals off the market reducing overall supply.

Looking at new housing (commercial and residential) build data nationally over the past 20 years reveals a significant decline following the 2008 market crash that has really lasted to this day. Current new build numbers aren’t even where they were in the late 90’s and that drop in building is clearly starting to show up as an issue as our population growth didn’t stop during that time. I know markets are complex and different, and there are many factors involved in the housing issues in San Francisco, Los Angeles etc. But the public just doesn’t seem to understand that we need to encourage investors and developers to build, not place crazy restrictions and limitations on those who are trying to provide housing. There are so many complicated stats, figures, etc. out there but the basic principles of supply and demand hold true and I just can’t believe I’m seeing such a breakdown in the public’s ability to recognize this. Better zoning laws, less restrictions and red tape, and continued tax incentives for builders and investors is needed to address the housing crisis, not increased government. If I’m missing something or way off base, I’d love to hear your input because I’m just trying to wrap my head around why this doesn’t seem to register with much of our country…or at least incite more people to question it.

What happened to the basic understanding of supply and demand? I didn’t grow up in a financially savvy household, but even as a kid I remember having a distinct awareness and understanding of supply and demand and its impact on prices. There is so much discussion and legislation going on in our country about the need to implement rent control through major metros, and even state wide, in addition to how our government needs strip away landlord rights such as basic screening and ability to evict tenants out of their own personal property. This is INSANE. We are already seeing property owners in places like Seattle and New York moving out of the market or going through the process taking rentals off the market reducing overall supply.

Looking at new housing (commercial and residential) build data nationally over the past 20 years reveals a significant decline following the 2008 market crash that has really lasted to this day. Current new build numbers aren’t even where they were in the late 90’s and that drop in building is clearly starting to show up as an issue as our population growth didn’t stop during that time. I know markets are complex and different, and there are many factors involved in the housing issues in San Francisco, Los Angeles etc. But the public just doesn’t seem to understand that we need to encourage investors and developers to build, not place crazy restrictions and limitations on those who are trying to provide housing. There are so many complicated stats, figures, etc. out there but the basic principles of supply and demand hold true and I just can’t believe I’m seeing such a breakdown in the public’s ability to recognize this. Better zoning laws, less restrictions and red tape, and continued tax incentives for builders and investors is needed to address the housing crisis, not increased government. If I’m missing something or way off base, I’d love to hear your input because I’m just trying to wrap my head around why this doesn’t seem to register with much of our country…or at least incite more people to question it.

@Greg Gaudet ROI is great and we all strive to make money. But at the end of the day, I think most of us want to provide a quality place to live for tenants and if you can do so while still making a solid return and simultaneously creating less work for yourself down the road...that's a win all around.

While I agree 100% with this post, telling people not to limit themselves is like telling Neo in the matrix to "free your mind".  He couldn't just manifest his true potential by being told about it, he had to see incremental evidence along with constant reinforcement to realize it.  No doubt partnering with an experienced investor is HUGE, but we don't all have the luxury of a Morpheus tracking us down to show us the way. How can beginning investors with limited experience (especially with time constraints due to family and work) who are willing to work hard get the attention of the bigger players? Sorry for the heavy matrix analogy, it just worked for this example.

@Mitch Messer Excellent points and I'm glad you brought that up.  Post was meant to dispel the myth that an impending recession means the housing market is going to crash and that nobody should look to invest right now.  You are absolutely right in that some markets took a heavy hit, especially in 2008, and that even in some minor recessions there are local areas effected far more than others.  But as a whole, recession does not automatically equate to collapse in the real estate market as many posts I've seen lately seem to assume.  Thanks for clarifying that mitch!

That's the beauty of real estate. There are so many ways to do it and to make it work whether you have money or not.  Don't mistake that to mean it's easy, because it sure as heck isn't.  But if you are driven to succeed and are willing to put in a lot of time and work into learning and doing this stuff then there's zero reason you can't be successful.  

Wholesaling is often touted as an easy way to get started because you don't need money, but in reality it is one of the harder ways because you need to know how to find buyers, negotiate with them, value housing both current value and after renovation, estimate renovation costs, run financials on the property to generate to other investors, etc.  To be a good wholesaler you have to know the whole spectrum of investing.  You could certainly pursue that option, but there are other ways too.  Look into getting your real estate license and start working as an agent to build your network, make some money, and learn that side of the business.  You could build relationships with local investors and try to find someone you can help who might take you on as a mentee or partner and get into RE that way. You could call up a local property management company and try to find a position with them. Tons of options are there if you want.  

College can be great, but it does not define whether or not you are successful.  You determine that. School offers academic knowledge and a piece of paper that tells the world you have a baseline competency in something.  Your work ethic, integrity, commitment, and drive to succeed tells the world who you are and is ultimately what determines how successful you are....professionally or otherwise.  

There seems to be a lot of misconceptions about what a recession means and especially for real estate investors. Yes, a recession is coming. But by nature of a cyclical economy it is either always coming or here already. It may happen next year, in 5 years, 10 years etc. But 2008 was a once in a lifetime anomaly and it seems like the results of that crash are being presumed for any future recession. Keep investing, but do so wisely and always look to mitigate risk. See below for a nice summary of the housing market over the last 5 recessions:

Housing in previous recessions

It’s somewhat counter-intuitive, but recessions don’t necessarily mean bad things for the housing market. In fact, they usually don’t.

ATTOM Data Solutions, a leading real estate data provider, looked at home prices during the five recessions since 1980 and found that only twice—in 1990 and 2008—did home prices come down during the recession, and in 1990 it was by less than a percent. During the other three, prices actually went up.

“Housing is such a basic need that it won’t necessarily do well, but [it will] at least truck along,” said ATTOM’s Daren Blomquist. “It may flatten out a bit, but people still need somewhere to live, so that basic need is going to cause how the housing market—and particularly home prices—to continue to go up.”

ATTOM data also show that rents are even less impacted by a recession. During the housing bust in 2008, the average fair market rent for a three-bedroom property, as calculated by the U.S. Department of Housing and Urban Development, rose at a steady clip even as home prices cratered. Rents likely rose as homeowners who had to go into foreclosure during the crisis added new demand for rental housing.