All Forum Posts by: Tim Knabe

lack of inventory is what is driving the prices up in my area, and from what I have seen pretty much nationwide. 

Diane G that seems at odds with your previous conclusions...how do these indicate a downturn? I see this in my market - "investors" buying houses at 150k that rent for 1500/m...people are way overpaying for rentals in my opinion. And yes, in the future that may result in people who overpaid for rentals losing them in the future due to losing money year in and year out. I saw this in my market prior to the crash, people overpaying for rentals because of the booming market...however that was not a cause of the crash it was merely a symptom of the conditions that caused the crash - unregulated(forgive me capitalists ;) ) easy money(simplified, but accurate) far and away #1 was the cause and on a much, much smaller scale local overspecualtion(your point here, but really much more on wall street than rental owners)...people are overpaying right now that has happened before...but what we do not have is the incredible number of bad loans and unqualified buyers we had that precipitated the crash. You are kind of all over the map, to make a case you really would need to show how te overpaying of rentals(or SFR) are on the scale of the the 2008 and prior numbers. What you have shown is there are some idiots in your market. That is hardly indication of a downturn.

 That is an interesting theory. This thread is way too long to read all the posts but it seems to keep coming back to some property you found that is selling for less than it sold for last year. Obviously that is not a market indicator unless it is the same for many properties in many areas nationwide, but I digress: A shortage of tenants would require something along the lines of a major sift in population or affordability or (as in the crash) it is so easy to get a loan that no one is renting anymore....So i guess I am asking(after admitting I may have missed a few posts) are you talking about your market or the national market? there seems to be a dearth of compelling facts to support a market correction for any reason and a lot of hearsay based on very micro-economic observations...what am I missing?       

I don't think the problem is specifically with wholesalers, there are pro wholesalers who do business the right way .The problem is with the whole guru industry that has convinced people they can tie up houses with no money and no risk then just walk away with some weasel clause if they cannot move it. This leads untrained and unprofessional people lying directly to sellers not taking into account they are messing with peoples lives......they are basing their whole business model on unethical behavior. It is pretty infuriating when you are bidding against a person who claims to be a cash buyer but is actually using monopoly money..in essence you are bidding against yourself. And then you get an email about the property the next day from the "wholesaler" who outbid you by offering way too much for the house! What happens next? They go back to the seller in 3 weeks to try to get them to reduce the price closer to the actual cash price you offered in the first place. This scenario plays out all the time for me along with many others where "wholesalers" who go to online forums to ask questions about earnest money or who pays for the inspections or some other incredibly basic question that anyone who is wholesaling should have learned in some kind of training or apprenticeship. Its hilarious when someone posts some incredibly basic info they need on some forum like they do not know which contract to use, or asking if someone has an assignment form they can use and their job title is "CEO OF ZEUS PROPERTIES"...I mean Seriously? You present yourself as a pro and a ceo and a cash buyer but  you don't know if you or the title company holds the earnest money? Rant over....

save money plain and simple

California is always a good leading indicator...having said that there will be 3-4 "rock solid" indications of the R/E market taking a "serious downturn" that the people who make money selling seminars will be touting as the "next big thing" and people will be buying into it..... First at the slightest downturn in sales numbers/pricing/dom it will be predicted this is the first domino in a huge crash and they will gladly tell you how to cash in on it for $10,000 charged to your credit card. The reality is a red hot market will cool down, pricing will eventually(already) chase some buyers out of the market making sales numbers decline and the rate of price increase/sales will slow or stagnate. We all saw the bubble and crash coming in the early 2000's, were just unaware of how deep it would hit or how long it would last, but anyone in the business who was paying attention knew a hugh correction was imminent. If you are paying attention there are few surprises in the real estate market....but a "downturn" is here? I guess it depends on how you define a downturn.  

from last spring and summer mid range historic type homes (250-500k) homes in dfw plateaued and pricing softened. they are back in force this summer. Don't mistake market corrections and seasonal/cyclical/demographic/geographic market shifts for national economic indicators.  

@Tony Battle I appreciate the help. I have found my own generated lists to be more effective, cost per lead is not too much of a concern, the quality of the list is. Will look into the ones you mentioned, thanks!

I used to do some work and convinced myself i was saving money, or that I liked to be on the job, managing the site or whatever...But Now on the very few days I go to job sites and pick up a hammer it is more of a day off, relaxing having fun with it and getting away from the mental grind of running the business. My best use of time is not pulling out fence posts(which i did for a while today and really enjoyed it). I let the painters paint and the plumbers plumb and the carpenters saw wood. Its the best use of their time and not mine.  

sell it, period. I am thinking some full time rehabber with his own crew can pull off what you cannot - you may just break even or make a very small profit by dumping it now but if you keep it you will likely just watch your profit margin drop as construction costs mount until you are in the red and lose money. You can shop around for lower bids but why? If you do not have someone you have done business with that you know and trust to get you a comprehensive bid that is turn key complete...well, going with the cheapest bid in hopes of salvaging a nonexistent profit will have only one outcome I assure you. You will get a cheap bid that will go up as construction goes along with lots of unaccounted for costs adding up along the way. You are chasing a unicorn get out and be glad the lesson learned was fairly inexpensive.