All Forum Posts by: CK Hwang

Problem with this question is that we're looking at the entire US market as a singular market. So specifically for my little area that i invest in, no I don't see a crash, I feel we are at slow and steady appreciation, maybe 2-3% just in line with inflation. That's about it.  

"U.S. Home Prices Are Surging 13 Times Faster Than Wages"

Source: Bloomberg

I always get a kick when I read headlines like that. I think sometimes these journalists tend to forget how big the US of A is. If we were to reimpose the map across Europe, it's like sitting in Paris worrying about what real estate prices are doing in Lithuania. Makes no sense. 

@David Avetisyan, perhaps you might be experiencing a growth due to the rise of silicon beach? I'm not really seeing that same kind of intensity here in Orange county. 

Yes, well priced houses are getting tons of offers, but houses priced at market value are getting maybe 1-2 offers which seem in line with a normal market. I'm not seeing price appreciation anywhere close to the numbers we've been seeing the last 2 years, nor the quantity of buyers. 

Maybe 2-3% appreciation on median home price at best. But that is just what I'm seeing from selling my flips.  

My vote is for Redondo Beach, but that is just me. But some investors do make money flipping in lower end neighborhoods in LA but it's really a market segment i am not familiar with. 

Personally, I try to avoid flipping anything that I am not happy to own for the next 20 years if I have to. And only last week, this principle saved my skin on a property I made a huge mistake on early in my career. As a result, I just stick to nicer neighborhoods. 

Hey Terrence, I do tend to flip in the nicer areas of OC. Not the absolute high end but middle-upper end ie 600-800K mark. 

As far as profits go, I find in absolute dollars, yes, it tends to be a little better, however as a percentage return, I generally find doing the lower priced ones gives a better percentage return. 

But personally, profit margins actually probably factor in only as their third or fourth most important thing for me to consider when I'm looking at a flip. I normally start off by gauging liquidity, quality of asset, rental yield, then finally profit margin. I always try to make sure my getting out is easier than my getting in. 

And these factors can vary significantly between higher end homes and lower end homes, often for me, it makes sense to get a lower return per flip but have a higher quality collateral. But that is just my preference.  

Hey Harold, if you have no money down, all you need to do is to find investors who want to make money form fixing and flipping then find and manage the project for them in exchange for say 40-50% of the profits. I fix and flip using other people's money, I barely have any of my own money in the properties when I fix and flip. 

Hey Jason, my advice from raising investment dollars is to think of your investments opportunity like a product. ie if your focus is on buying rental property with good long term yield, then think of it as a product that gives good consistent returns over time, with a safe collateral......then figure out who would want a product like that. Perhaps retirees? perhaps high net worth individuals that want to diversify from stocks and bonds?

For example the way I market my product to my clients is that I offer higher than bank fixed deposit without the lock in period of 6 months to 1 year. etc.  So it's tailored towards people who want flexibility with their money and in my lists, it's made up mainly of young upward professionals who have excess cash (not a ton) want to invest in something that returns better than banks, but want the flexibility in case they have kids, get married, etc. 

I'm curious to know why you say no appreciation in your original post? Is it just for the sake of calculations? Generally I find that 5% CoC rental returns is a sign of being in an area with relatively high capital gains. Likewise being in an area with 10% rental returns generally signal low capital gains.

Now if you're looking purely for returns without capital gains I would understand, but personally, I would never consider rental properties based solely on rental returns without regarding capital gains and more importantly liquidity. 

Funny thing is that i do it the opposite way. I always bring a team member one first, ie attorney, CPA etc. Then if I find that it is so simple i can do it myself or it's not worth the money, I'll do it myself on the subsequent times. But if I've never done it before, I rather bring someone in so I don't get myself into trouble and then be in a desperate situation trying to find someone to me out. 

Hey Karen, I need a GC to oversee and handle my flip projects from beginning to end. Having a hard time finding a good one.