All Forum Posts by: Tim G.

Rents seem to be coming down in my area, maybe its just a pattern of landlords marking up new listings compared to previous comps and being successful for multiple years. But that doesn't seem to be the way its working anymore, overpriced rentals with moonshot rates are sitting and slowly coming down to reality. 

People made a lot of changes over the last few years and paid to do so, I don't think that behavior is around in the same demand levels. People want to stay put, trim budgets and chill. Just like the only people selling homes are the "gotta sells" the only people moving are the "gotta moves". 

Agents and lenders are desperate for business, I wouldn't follow any advice of anyone who gets a check from a decision you make. 

The market is at peak, and dropping. I personally hope new investors press pause. I feel for folks wanting to get in, but the conditions are terrible. Overpriced homes that have not came down in respect to the interest rates. Even the advice here can be quickly filtered out by who is hoping to earn your business and who is here to talk real estate. 

First I would ignore any PM I got from anyone seeking a partner or offering a deal in the immediate future. 

Then I would get educated on current market conditions and strategies that work for my business model and goals, and likely wait things out a little as inflation hasn't yet showed signs of being tamed and the frothiness of this current market is certainly fading fast. Waiting for the dust to settle to me seems wise. But I am a conservative investor and don't like trying to force things. 

I've been watching Opendoor since almost selling a home to them last year, they backed out at the last minute from an offer so crazy I felt certain their future was already written. I ended up selling the deal to Redfin instead (netting $160k in two months of ownership but $60k below Opendoors offer). Since then I've been tracking their inventory, while they are down from 19k homes over the summer... they look to be in deep trouble. 

Please keep in mind when you see a sold number on public records, Opendoor likely paid 6-10% below that number after they deduct various fees from the transaction. This point seems to be missed in most cases when referencing the prices paid for homes by Zillow, Redfin and Opendoor. 

Here are some details on the markets with large holdings.

Arizona (2,331) 

Texas (4,355)

Florida (2,404)

California (1,578)

Several of these markets have strong new construction inventory coming to market... this looks dangerous. Please be careful out there friends. 

Source: Property Radar

This feels like a very thin deal, banking on rates in the 2-3% range is highly speculative and risky. Did the realtor you're referencing here back you up in this thought process? 

Quote from @Boris Kaplan:

Quote from @Tim G.:

Quote from @Boris Kaplan:

Quote from @Tim G.:

Hi Boris, what is your current assessment of the San Diego housing market? Do you know anyone actively flipping in this market and have they given you feedback about current market conditions? 

 Hi Tim, I don't have an asseement yet. I don't know anyone yet. I'm at the begining of the begining. Do you know anyone that flipps houses there and can give feedback?

Sure, I’ve been flipping and wholesaling here since 2010. I would say right now is about the worst possible time to be flipping. Especially if you bought over the summer. 

it’s a great time to prepare and study, but this market appears to be in the early stages of some massive shifts. Flipping in a declining market as even an experienced investor is dangerous. 

this summer many new investors were taken advantage of by more experienced wholesalers and agents who were willing to unload deals and get paid. Tread carefully. 

 Thank you Tim,

As an experianced investor in this market, do you have a gut feeling on what is the opportunaty currently in this dangerous market? Maybe buying cheap from distressed sellers and turning to airbnb for cashflow until the trend goes back up again?

Or maybe someting else?

I will definetly study the market rigourusly now but maybe you have a guess on what type of deals to focus or to prepare for

 Study study study. Say informed on current trends, rates and regulations. San Diego is about to trim 75% of its Airbnb permits, so no I don't think buying to Airbnb in city of San Diego is wise. A likely economic slowdown is here, meaning likely lower bookings on vacation rentals. If you have cash and current rates are not a concern that is one thing but I'd encourage you to underwrite deals with rates staying where they are or going higher. 

Personally, I think building ADU's on properties already owned and financed well is a good play, maximizing rentals already owned is a good play. Buying something right now.... if its a long term play in a specific area where the opportunity makes sense... maybe. I don't know, this market feels effectively frozen right now and I think its going to be painful for those who need consistent income outside of rental cashflow from the local real estate market.

In other words, don't quit your day job. 

Quote from @Boris Kaplan:

Quote from @Tim G.:

Hi Boris, what is your current assessment of the San Diego housing market? Do you know anyone actively flipping in this market and have they given you feedback about current market conditions? 

 Hi Tim, I don't have an asseement yet. I don't know anyone yet. I'm at the begining of the begining. Do you know anyone that flipps houses there and can give feedback?

Sure, I’ve been flipping and wholesaling here since 2010. I would say right now is about the worst possible time to be flipping. Especially if you bought over the summer. 

it’s a great time to prepare and study, but this market appears to be in the early stages of some massive shifts. Flipping in a declining market as even an experienced investor is dangerous. 

this summer many new investors were taken advantage of by more experienced wholesalers and agents who were willing to unload deals and get paid. Tread carefully. 

I don't have anything to sell you, I would try to find people in that position to give input. 

As a 10 year flipper and wholesaler in southern California, in my market... no it is not a good time to be flipping. I don't know what market you are in, deals will still happen, and opportunities are there. But the margin of error is thin and there are a lot of hungry sharks in the water (agents, wholesalers, lenders, contractors) who can't survive without work. So they will be highly incentivized to try and get you to do business with them. 

Take your time, 

Hi Boris, what is your current assessment of the San Diego housing market? Do you know anyone actively flipping in this market and have they given you feedback about current market conditions? 

Step 1, don't tell people you're from California. Its like walking around with a kick me sign on your back. Get a local google voice number, that helps too. Keep in mind the market is shifting and there will be no shortage of people ready to capitalize on an investor unfamiliar with a new market. Study, study, study and have a 3rd party with no financial interest reviewing what you are looking at doing.