All Forum Posts by: Timothy Howdeshell

Quote from @Bruce Woodruff:

Quote from @Timothy Howdeshell:

I actually prefer Fresno, Bakersfield, etc to the Bay area. Last time we visited there we swore we'd never go back..... :-)

 Different strokes for different folks. I feel that the people that would be naturally drawn to the bay area would be bored to death (and hot) in Fresno. But yes the bay isn't what it used to be (from what I hear). 

Quote from @Carlos Ptriawan:

Quote from @Timothy Howdeshell:

I have an interesting perspective on this issue as I live in Fresno, CA where the median home price is ~$365k (median income = $25,378) and invest in Kansas City, MO where the median home price is $230k (median income = $32,474). Interest rates have a much lower impact on lower priced properties in terms of real, nominal cost to the borrower. 

It is now cheaper to rent in both cities (not including house hacking), but the "average" person cannot afford property here in CA. Homeownership is still attainable for most in Kansas City, even at today's high interest rates. 

Both markets have homes that are properly priced as homes are worth whatever the market will pay, and people are paying. But it's hard to see how today's market conditions don't simply increase the amount of people that are perma-renters. 

I suspect that, to some degree, we're going to see migration trends favor these more affordable locations, especially if the remote work trend continues. 

Your market Fresno and Sacramento is the final destination for the CA folks that get 'replaced' from Bay Area --sort of like that based on immigration pattern-- (don't know the better word for that pattern of immigration due to unaffordability)

Even Modesto is rapidly changing now.

I would guess Fresno and Sacramento would need more hospital/doctors more and more in the future.

I have been myself 'replaced' from area like Palo Alto as well LOL It happened.

 I'm sorry for anyone that has been migrated from the bay area to Fresno 😂 what a change of pace, weather and people that would be!

I have an interesting perspective on this issue as I live in Fresno, CA where the median home price is ~$365k (median income = $25,378) and invest in Kansas City, MO where the median home price is $230k (median income = $32,474). Interest rates have a much lower impact on lower priced properties in terms of real, nominal cost to the borrower. 

It is now cheaper to rent in both cities (not including house hacking), but the "average" person cannot afford property here in CA. Homeownership is still attainable for most in Kansas City, even at today's high interest rates. 

Both markets have homes that are properly priced as homes are worth whatever the market will pay, and people are paying. But it's hard to see how today's market conditions don't simply increase the amount of people that are perma-renters. 

I suspect that, to some degree, we're going to see migration trends favor these more affordable locations, especially if the remote work trend continues. 

Quote from @Daniel Hoang:

Hi everyone,

Used to have another biggerpockets account but i don't remember the login, wasn't too active anyway.

I'm an experienced investor looking to test out the Kansas City market.
My current market is Ohio and buy about 1 property a month to give you an idea. 28 properties owned, mix of mostly SFH, duplex and quads.

I have zero contacts in Kansas so I'm looking for a full-service property manager and also a realtor.

My acquisition process usually goes like this:
I find a deal that i'm interested in. Send pictures to my property manager for his opinion. He'll find time to walk the property and give me a rehab estimate at the same time to make it rent ready (Usually doing BRRRR, i don't flip).
I've been keeping his crews busy with 1 rehab a month currently, win-win for both of us. Pushing almost 2 property acquisitions a month now but I'm thinking of testing out some other markets just to diversify a bit.

Basically I'm looking for a similar setup in Kansas City.
For properties under contract, I need a property manager to get a rehab estimate. They should be able to supervise light to full rehabs + all the basic jobs that a property manager does. Could be a rehab/construction company too, but i'd still need a property manager. Also looking for an agent to help with on-market listings.

Hi @Daniel Hoang. Welcome to KC!

There are several good PMs that can provide this service. I use Alpine Kansas City for this exact purpose. 

Best of luck!

What a fun question! 

I like real estate as it is a "sexy" industry. Everyone loves watching the flipping shows and it is really fun to see your own project come to life! Real estate is also a very common industry. No matter where you go, people need homes and someone is making money there. The strategies may change over time, but real estate has proven itself to be a fantastic wealth builder for the middle class. 

Lastly, I love the tax benefits. I'm not aware of another easily accessible vehicle which allows you to offset your income to such a large degree. All other things being equal, having REI income equal to W2 income, the REI wins every time!

I was watching a documentary about longevity (Live to 100: Secrets of the Blue Zones; Netflix; pretty good and thought-provoking) where they interviewed a local politician in Singapore. She stated that the role of politicians was to be civil servants and enhance the lives of their constituents. 

Maybe I'm too cynical, but as a lifelong American, this phrase struck me as highly unusual. I've no doubt that there are great politicians at the local level, but at the federal level I have lost faith in our government to make the right decisions to improve the health, opportunity, and happiness of the average American. 

America is still a great country to live in, but we are certainly not without our flaws. And being poor in America?......probably not worth it. 

@Josh Edelson These are some great questions and I can understand your frustrations! The current market is playing REI on hard mode compared to the last decade or so. That being said, every market has its challenges. Learning how to be a successful investor means learning how to make money in any market and having a larger toolbelt of strategies to do so.

To answer your insurance question, my best friend is the VP of a nationwide insurance company. I spoke to him about this recently. He let me know that some states (TX, FL, and CA) have laws on the books that only allow for insurance rates to be based on historical claims data, not projected future losses. This works okay in a stable rate of claims environment, but when a larger percentage of people start filing expensive claims against homes, the rates must go up to ensure cap or prevent losses. The government said, you must operate at a profit loss and the carriers said, fine. We just won't do business there anymore. 

As to what the future holds? Only time will tell. Every struggle has an opportunity. But there may be some pain until we get to the other side. 

One strategy is to invest in other areas besides those markets. This won't necessarily make the game easy, but will reduce insurance cost risk. 

Best of luck!

@Cody M. congrats on taking action on the advice you received here! So many people never get to that stage so even if this one deal doesn't work out, you should be proud of yourself.

As a Midwest native who lives on the west coast myself, I think it's prudent to stay in Kansas City and worked towards financial independence there. The cost of housing is prohibitively expensive out here and really hold people back from building wealth.

in Kansas City you can just simply buy a primary residence every 12 months, then move out and turn into a rental. You could have 10 plus units within a decade fairly easily. This is tough to do when you need to save up 50k per year for down payments in California.

Quote from @Joshua Nance:

The kc metro is growing very rapidly and the barrier to entry to begin investing is extremely low making this market great for beginners and seasoned investor alike to grow their portfolios.

Yes I thought about it. I thought about it so much actually that I've purchased three rentals there. I've also done several flips and several wholesales in Kansas City. Lol. So I guess I thought about it. Yes 😂

@Lisa Broderick Hi Lisa, I'm not going to tell you what to do. I have paid for various coaching programs. Some worked as advertised, and some do not. Ultimately, this is the issue right? If you knew 100% that paying $40k would get you to a 7-figure business in 2 years then it's a no brainer. But that certainty is not there. For that price point, I would want to hear from multiple (5-6) real students who took the program (with your same/current level of knowledge), executed well, and got your expected result. 

Here a better (I think) idea and what I would do if I were in your shoes. Get your finances in order to minimize your expenses: pay off consumer debt, buy a house and house hack, sell expensive car and get a cheaper one. Just make sure you can live on <$40k/yr (should be pretty easy, even renting). Next, reach out to 1 big flipper in your market every day. Try to learn about them and their business and where you can add value. Tell them you want to do exactly what they're doing, and you're willing to work with them 100% for free for 6 months doing whatever they need so that you can learn the business yourself. They don't want to manage another rookie employee, so make sure that you have something to offer them (be a gopher comes to mind, or a transaction coordinator). Take the $40k, live off of that, work for free for 6 months, and then strike out on your own. You will get 1000% more experience this way, for the same money, and if you go above and beyond for that flipper, they may partner with you or even pay you for your work (principle of reciprocity).