All Forum Posts by: Shaun Martin

Can you trust other players: Unfortunately there are lots of people out there willing to get ahead to your detriment. That said this business is a lot easier to navigate if you have people you can trust. Trust for information, helping sell (and buy) deals, take on projects, expand horizons, etc. These relationships will take time. You can't force them.

Stealing Your Deal?: LIke previously said. If they deal is a deal you should be able to get it sold. I am presented many "deals" where the perosn with the contract has signed it based on ARV x 0.70. Many times this is not a deal. If the ARV is 300,000 and the rehab is 200,000 - is paying 210K a deal??? While that is an exaggerated calculation - hopefully you see my point.

Is your contract legit? Contract law is strong in the U.S. If you have a legit contract you can enforce it. Sometimes it may not be worth your time but you have the opportunity. I am surprised no-one has said it yet - but spend an hour or 2 and sit down with a local real estate attorney. Before booking time be sure to ask qualifying questions regarding their knowledge. 

The information you get from this will be priceless. 

I did this myself a number of years back. Lucky for me he let me record the entire conversation. I refer back to it all the time. 

I am happy to share the audio file with you. Just message me. The attorney is a Colorado-based attorney. However much of the information is true for many parts of the country. 

SUMMARY: Don't waste energy worrying about people stealing the deal. If you come across a scoundrel (which will happen) just learn from the experience. Hopefully it doesn't happen much to you. 

For the record - I have never had anyone steal a deal while under contract. Like previously said - if it falls out of contract then it's no longer your deal. 

Do you really think this will get past the house and senate?

In my group of friends I definitely have the most real estate experience. It is a low bar people. I am not professing to be awesome here. However, my friends look to me to answer questions they have about real estate. It is not a surprise that I am being asked if the real estate market will change significantly with a new president.

A common thought is that Trump is a real estate mogul and therefore pro real estate and real estate will flourish under the leadership of Trump. 

My counter to that is that most politicians probably own real estate and are going to protect their investments. 

To me the answer is a lot bigger than just the changing of the guard. However I am looking to your comments and ideas to help me explain to my friends what the future may hold.

Some key points that I do try and explain to them are:

1. If you are buying a primary home in a market you intend to live in for a reasonable period of time it is always a good time to buy. I base a lot of this around if you sell your primary in the same market that you plan to buy back into then most likely you will not be winning or loosing much.

2. Real Estate runs on cycles, is predictable (on a macro level) and takes a lot more than a new president to change it.

3. The current market is further along in an upward cycle, there are some significant headwinds, and despite my previous point, a couple policies or speeches could alter peoples perception and turn the tide of the real estate cycle sooner than later.

4. Patience is a key virtue in real estate.

I would really appreciate your comments and thoughts on how much you see a new president affecting the real estate market in the near and distant future.

Thanks 

SO MANY INVESTORS CHOOSE TO IGNORE CAPITAL EXPENDITURES BUT I 100% AFFECTS YOUR INVESTMENT RETURN.

There is a clearly defined way to come up with a multiplier you can use across your properties. I am sure it is well documented in Bigger Pockets but I am still repeatedly coming across investors, new and seasoned who leave if out of their calculations. Theirs is not a definitive Guide. Please add more. If nothing else I just want you all to know:100% understand you can not ignore CAPEX!!!You just need to spend a little time understanding how much various items cost such as:

• roof replacement
• hot water heater
• furnace replacement
• ac replacement
• gutter replacement

Among other things. Then take these numbers, and the industry standard for expected life of said items, cost them in against purchase price of property rent etc. and SHAZAAM!!!! you have a number for your CAPEX. It may not be exact but hell - its a million ties better than ignoring it. If you ignore it you will run the chance of failing in you real estate business. Now more than ever with a potential changing of the tides...That said - What do you see happening in the greater real estate cycle over the coming days, weeks, months and year?

That depends on what the rental market in your neighborhood dictates. Don't get caught into the trap of what you would like. That said I believe in having the best product in my class - regardless A B C D E F or Z. Paint is a cheaper upgrade that can really "TRANSFORM" a space right. Isn't that what HGTV and Martha Stewarts says?

If the rental and your bank can bare it and it sets you apart then it is something, as an investor, I always consider. 

I have a number of friends/associates that until recently didn't notice how much they were spending on each lead. Why? The money was too easy on the back end. This changed almost overnight were once very attractive BRRRR properties sat for weeks without a bite. Since then we have been discussing if SEO is important. It's alot of work for little reward early on. Is the reward their on the back end.

In a big market like Phoenix if you are listed in the top 3 the clicks you receive would cost you over $850,000 annually! (this following Neil Patel's math) I would love to hear what other people are doing for SEO - if you find it worth your time, or if it's just too much work for little reward. 

P.S I am not an SEO specialist selling services - I'm a buy and hold investor that is always trying to find better ways to source off-market deals.

Thank Erik for your thoughtful addition to the discussion. It sounds like you think that general "correction" was still a few years off. 

I would agree that a number of small businesses will close or certainly find it very difficult to recover from. Whether that will leak into defaults and foreclosures is another story. 

Again thanks for sharing your crystal ball. 

I believe we will go into a recession - I think it will be different from 2008 in that the loss in US Housing Market value will be more "normal" closer to 10% versus 30%+ drop - loss of $3-4 trillion versus $10+ trillion in value.  (Now this is my humble opinion and my real answer is to say "ask me in 12 months and I'll tell you exactly what will happen in the summer of 2020" but in the name of debate and honest conversation...)

I base this on where the housing market has come from over the last decade and where we were headed.  I like default rates as a measure at the moment along with all the other classics. I think Govt intervention will play a part (at 2 trillion dollars) and boring old real estate cycles. 

I read a great study by Ted C. Jones - def worth a look at. He looked at other recent major events and how it affected the economy and housing here in the US.  Gave me quiet optimism. In short, my take him from it was, wherever we were headed is where we will go.   We were probably headed for a down cycle sometime soon...


2 huge unknowns for me are:

1. CO-VID 19 - obviously - is this worse than SARS - I never totally know with news acting as entertainment versus news

2. People's perception - 2008 is what a lot of people consider to be a normal recession as that what they remember.  Historically it wasn't normal at all.  However, as I am a huge believer in the influence on people's perception o where we end up t- how do I put this - hmmm... If everyone believes and says we will lose 50% of the value and everyone says that the housing market is only worth $17 trillion - then guess what - that what it is worth.. right?

We were at an all-time high - investors in Denver had been talking peak fo the past 5 years. Cycles suggest we will drop soon. CO-VID has shot unemployment through the roof. Alot of service jobs - do these people own property? What if the vaccine comes out tomorrow? Will we see drops like 2008?

Here are my two cents (please note this is my first post - I am coming from Facebook where people are necessarily tough) I'm just trying to get an idea of this community thoughts. 

Pro's for the housing market

$2 trillion dollar check - (can you imagine writing a check for 2 trillion and saying to the world - trust me - it won't bounce!) - community flow through hopefully keeping money changing hands and rents and mortgages paid. 

10K Loan SBA - for the smart people that use it as runway can buoy market - save there house

Default rate at historic lows before the crisis (always increases at the turn but still they were super low - 2-3% ish)

Houses still being bought and sold (we just sold one in port richer and one in Littleton) - both vacant though but a lot more activity than I expected. 

Interest Rates super low. 

So I predict that the market will drop 5% to 45% :-) HA HA HA - hmmm

Seriously though I believe it is different than 2008. I read a neat paper by Ted C Jones. Ph.D. who looked at recent major events and . 

I'm going optimistic with a 10% dip over this next cycle. I am optimistic that "average Joe" doesn't lose his shirt or feel unnecessarily stressed again. Not everyone has the luxuries this community has - seeing the amazing opportunities the bigger the dip. 

So 10% - by the end of the upcoming recession housing market will be valued at roughly $30 TRILLION. 

Love to hear thoughts and more importantly the WHY's. 

Excuse if this is long - new to BP. 

Sincerely

Shaun

I have been using Lionsdesk for about a month now - they started off gangbusters with customer service response however lately not so much - I asked them if this was CO VID 19 issue and they said no as the CS team is remote. The software has also started acting up - error messages, etc. It's certainly hard to find a GREAT Solution. Liondesk is currently a better the devil I know solution

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