All Forum Posts by: Richard Dunlop

@Nick Rose Welcome to BP

@Joe Villeneuve is a good contact in your area with some innovative strategies

The new payment will be way higher than $700.

If your taxes on an owner occupied property are at $8000, then the taxes alone on a rental house will be more than $700 per month.

(Taxes are the "T" part of the PITI)

Will it be worth more than it is today at some point in the next 20 years?  YES

Are we at the TOP of this run?  NO

How much higher will it go before it drops?         ??????

Can you survive the 10 years out of the next 20 that it could well be worth less than you are paying?

If the decline starts in 1 year? (It won't)

If the decline starts in 3 years?

If the decline starts in 5 years?

I think the California market is good for the long term

@David Lowe As @Brent Coombs alludes to there are many markets where 2% would be laughed at as being way too low.

I lived in San Diego for several years and loved it but as a RE investment location you are trying to time the market and make sure you have gained enough appreciation to make the property worth holding through the downturns.

Long term investors have done well but are prices going to rise 10% per year for the next 5 years? Or only 2 years? Will it then drop 30% over the next 5 years?

I relocated from Orange County CA because of the opportunities in Detroit and Detroit suburbs.

I like the Detroit market where the cash flow beats all other markets AND the appreciation is second to none. 

I don't think the Southern CA market is a bad market I just could not have made a living there if I were to rely on REI.

The link I posted was a CA investor's line by line account of the 5 years it took him to get the squatters out of his CA house. I asked if you could survive the downturn? We can hope it is still 5 years away. Or a vacancy/nonpaying tenant/eviction?

Your margins are small. (I get criticized every time I point this out but) The $218,000 you are putting down would provide a better than $10,000 PER MONTH positive cash flow in Detroit and Detroit suburbs without taking on new debt.

You are counting on your savings of $200 per month (if everything goes perfectly) and getting in debt to the tune of almost ONE MILLION DOLLARS.

Wrong market unless your goal is to assist your grandkids in their retirement.

(From your picture it looks like your grandkids will probably retire in 70-80 years)

I guess it boils down to your evaluation of the continuing  appreciation in the California markets. 

If you are right maybe you have 20% more upside before the next downturn.

Can you sustain the property with a long vacancy in one of the other units?

See this thread from a California Land Lord

I left the CA market because the values did not make sense to me, but long term investors have done great over the past decades.  My opinion only is that eventually properties out price the ability of tenants to rent and the appreciation you are hoping for slows or stops.

I'm not in Flint and don't follow it too closely, but I believe most or all of Flint is on Detroit water NOW. 

The damage was done while it was switched temporarily to Flint river corrosive water.  The water cause a deterioration in the lining of the pipes to where now Lead leeches into the water even though the corrosive water is no longer being used.

The solution requires replacing the pipes not just switching back to a good water supply.

The "age of majority" is 18 in the US, but you can be invested in RE with your parents approval and support.  Are any of your relatives investors that would let you partner on as part of a purchase?  

There are many markets in the US where no loan is needed.

I bought the first property in Detroit the end of 2008 and Detroit at that time  was already at the bottom because of many factors stretching back decades.

The nationwide housing crash was only the last of several factors and the banks had houses that they were selling with a warranty deed all taxes paid for $100-$1000 and they had 1000s of them. I had been researching properties for 1 year before I decided there was no place better than Detroit.

One of the things that amazed me was I would pull up Craigslist for Detroit and Craigslist for Long Beach California (one of the other areas I was watching) Houses that were selling full retail for $400,000 in LB CA would rent for $1400-$1500. 

 Houses that were selling full retail for $10,000 in Detroit would rent for $650! And there were lots of opportunities to buy for way less than retail. My first purchase was a 2 unit for $1500 rent for $900 (2x$450)

In Detroit suburbs houses that would sell full retail for $20,000 would rent for $875.

"Let me see if I buy (20) houses for $20,000 each instead of (1) for $400,000.00 which strategy will survive the downturn."