All Forum Posts by: Tim Jones

How does the 25th or 26th sound everyone? 

Great info & advice everyone...keep it coming!! 

I understand that my very asking the question shows me as being afraid to act. I assure you that is not the case. My OP was to entertain the thought of should I be afraid to act? I'm a big Warren Buffett fan and since my local market is rather hot, I can't help thinking of his famous quote:

"Be fearful when others are greedy and be greedy when others are fearful"

I'm not trying to time the market, rather I'm seeking advice from experienced investors as to their strategy in the current cycle. Just like pre-crash 2007, every agent is saying, "buy, buy, buy". Anyone remember the NAR tv ads from that time? "It's a great time to buy a house!" Clearly it wasn't.

In the meantime, I'm still trying to buy under intrinsic value. I'm sending a letter today to an out-of-town homeowner that I found while jogging-for-dollars. Wish me luck!

TJ

@Muthu B.

We all forgot to ping you...

@Brent Coombs

That was a great book! Thanks for bringing that up. You make some great points; I just feel that they weren't applicable to my situation back then. I owned a C class property in a C class city. It tripled in value and I was moving anyway. I was happy to take my profits and move on. I am happy I didn't maintain that property through the Great Recession. It would not be that great of a rental today based on what I paid for it back then. A post recession purchase would work, numbers wise.

Also, the foreclosure crisis hit these places (Central Valley & IE) much sooner and harder than 2007. I'm from the Bay Area and had moved to OC in 2005 and both places were in denial well into the collapse (as detailed in the Big Short). I sold my in-laws house in Merced in 2006 as the foreclosure crisis started...about the same time the people who bought my SFR foreclosed.

Your last few points are brilliant and that's where I'm at today. I just feel a little stuck there trying to find that elusive undervalued property. I've called all the banner sign guys, Craiglist posters, and BP wholesalers to get my hands on a wholesale deal - they've got nothing or they've overpaid themselves... I've made some offers through the MLS but no takers yet.

@Wes Blackwell,

Lots of great info as usual. Thanks

@Arlen Chou

Excellent post! I love your analogy to dollar cost averaging. 

Hi, I'm looking to get some feedback from some experienced investors that have been working in the industry for at least a few market cycles.
I'm properly positioned to start investing. I have some cash, credit(HELOC), and financial education. I live in a tertiary market in California and prefer to invest locally.
My RE strategy would be buy-and-hold. I'm not against flipping but I feel the margins are very thin right now.
Everything I'm coming in contact with seems to point towards an impending recession. I read John Mauldin and listen to the BP podcasts. I'm hearing rumblings of downward price corrections in the South Bay Area.  The California State Controller, Betty Yee, spoke at a function recently. The State of Ca is anticipating a recession.
As much as I want to buy a property, I feel like we're near the top of a market cycle. I would really like to get myself in mortgage debt at these low rates before Quantitative Easing forces a run up in inflation.
The multi-year run-up in prices following the Great Recession has me thinking it might be a good time to offload my primary residence( bought in 09). That's what I did in 2005 and that seemed to work out well.
I know there's not a crystal ball out there but I'm curious as to what is a good strategy right now. Am I smart to wait for a recessionary period? California is already tough to even approach a 1% rule let alone the 2% rule.
Thank you for any and all input!
TJ

What's the address? I can tell you about the neighborhood. At roughly $100/sq ft I'm guessing it still needs rehabbing.

TJ

Great meetup today guys! It was nice meeting you. I felt it was very productive and energizing, just what I needed. Hope to see more BPers on the next one.

TJ

Madera, Chowchilla, Merced, Atwater, Turloch

@Storm Daniels,

Based on your original post (OP) and my impression of the market, I would recommend just flipping the house. You'll pay taxes on your profit (unless you 1031 it) but it's short term and avoids the market potentially correcting during your hold time. It also gives you a smaller window to evaluate your team. 

Car payments and utility bills can build credit...a mortgage is nice but is it worth the risk of a tenant messing up the house? You'll have to go in and clean/paint the place before putting it on the market. All those new fixtures won't be so new anymore. Not to mention that is one more job that you'll have to learn outside of the rehab business. Does anyone on your team have experience being a landlord? Tenant selection? 

As for your partnership, I would recommend drafting a letter clearly stating each person's responsibilities. Will everyone contribute equal parts money or is one or more the "contractor"? The honeymoon phase ends as soon as manual labor arrives. Some will feel like they're putting in more work/money/research time/etc. Are these current friends? Soldiers with known deployment timelines? Do you plan on having everyone on title or just one of you?

As for finding deals, call all the wholesalers that have banner signs/Craigslist ads in the area that you're willing to commute to daily to work. You know, "I buy houses" guys. 

Your ability to get a VA loan is huge, though you don't necessarily need to get one right away. Work on that credit...

In any case, I commute out to the peninsula weekly so we could meetup if you're interested. Best of luck to you guys!

TJ

Hi @Account Closed,

You're more than welcome to join in! As you can see, I started this thread to find and meet all the local players. I've set up 2 meetups in the last few months but the response has been lackluster. Perhaps it's my fault as the first was Veteran's Day and the second was New Year's Day. I'm meeting one of the local individuals tomorrow here at IHOP on Olive Ave @ 11. You and any others are more than welcome to attend. I know it's last minute but I've all but given up on trying to get a group together. Hopefully 2017 will bring with it a renewed sense of urgency and interest.

Hope to see you tomorrow!

TJ

@Storm Daniels

Just my 2 cents but you may want to consider selling right away so that your renters don't thrash the place just after remodeling. Also, the finishes you choose should be based on the neighborhood it's in - whether you're selling to a homeowner or another investor that will rent the place out. You could also move into a beautifully remodeled house, live there 2 years, then sell with no taxable  event. Just throwing some ideas around.

TJ

@Brandon Correa

Do you still have that off-market MFR? I used to work in Soledad; haven't made it out there for awhile....I miss going to the Windmill!

TJ