All Forum Posts by: Tristin Crum

A paragraph from an analyst friend of mine

"There is still a huge housing supply problem in the United States given 37 million people between the ages of 24-37 don't own a home. This is because 27.1 million homes were built between 2000-2009 but the Great Recession derailed the pace of home building by almost 80%. Only 5.8 million homes were built in the United States between 2010-2019 by comparison. The homes for this next generation of buyers were never even built. Ultimately the last housing crash will prevent another actual crash from occurring in the United States based on the sheer lack of supply. Even if mortgage rates hit new highs, it won't fix the supply problem. It will just temporarily reduce demand which is what the market is already experiencing. If mortgage rates materially drop from here, it's not outside the realm of possibility we could go back to bidding wars. Certainly some buyer incentives, such as closing cost credits and seller rate buydowns, could start to dry up as more buyers enter the market."

I am having a hard time understanding how your debt to income ratio is 450% ... Are you saying with the 6 unit it will be 450%? Is this because they won't count rents on the two duplexes towards your DTI? I feel like we need more information than is being provided

I have been looking into it, ultimately, from my analysis, it comes down to getting the land at a good price, I have been looking at doing it in Oregon which is a HCOL area. I have a builder that specializes in building 2 to 12 unit properties that has reasonable rates, I just need to find land at a reasonable price. 

As homeownership becomes less attainable I think that lower income individuals will remain renters for life which is unfortunate because of the clear wealth disparity between homeowners and renters. This is especially true in HCOL areas such as the West Coast. Only being required to put 3.5% down doesn't matter much if a starter home is $400,000 to $700,000 and is completely unaffordable to those trying to enter the market from the lower to middle lower economic status. I do not think that broadly individuals will not want to purchase or own a home, I think it will simply not be possible for many without the help of family. I do not foresee housing prices coming down in any significant way in the long term as we still have a large inventory shortage. My buddy is an analyst and recently sent me a report he had written and this is an interest paragraph from his analysis.

"There is still a huge housing supply problem in the United States given 37 million people between the ages of 24-37 don't own a home. This is because 27.1 million homes were built between 2000-2009 but the Great Recession derailed the pace of home building by almost 80%. Only 5.8 million homes were built in the United States between 2010-2019 by comparison. The homes for this next generation of buyers were never even built. Ultimately the last housing crash will prevent another actual crash from occurring in the United States based on the sheer lack of supply. Even if mortgage rates hit new highs, it won't fix the supply problem. It will just temporarily reduce demand which is what the market is already experiencing. If mortgage rates materially drop from here, it's not outside the realm of possibility we could go back to bidding wars. Certainly some buyer incentives, such as closing cost credits and seller rate buydowns, could start to dry up as more buyers enter the market."

In short, it won't be by choice for the majority of individuals who do not purchase a home, they simply won't have access to the market because of their personal financial position. I have heard Grant argue that people WANT to be renters, some do, I don't believe the majority of the population want to be renters. 

I use Avail, they are a platform for property management holistically, this includes the background check, credit check, and eviction check … tenants can pay rent and submit maintenance requests along with sign leases and addendums all through the platform 

As an active duty service member I would recommend trying to use that VA loan, you can use income from other units to qualify for the loan; get a 2 to 4 unit property, honestly in San Diego it will most likely be a 2 unit. I am assuming you get BAH and do not live in the barracks, if that isn't correct, you're right, you won't qualify for a mortgage in the San Diego area.

Everyone is different, I would not invest in a condo or try and do a hard money deal on my first purchase. I understand the desire to get into real estate and start making things happen but if you genuinely have no cash you could put yourself in a bad financial position. Emergencies occur and you need to be able to pay for them, closing costs almost always have to be paid out of pocket, you can always use someone else's money but it can be hard to find someone who wants to give money to someone with no experience.

I would recommend saving some money prior to purchasing a property. Investing in real estate with no money is typically a bad idea, especially for those that are brand new and learning.

I am very interested in your process buying a home in PV as a STR. I will shoot you a message.

There is a similar issue occurring in Eugene, OR. Oregon has statewide rent control and that is 7% plus CPI and that is published every September for the following year. For 2023 in Oregon rent can be increased by 14.6%. This system takes into consideration economic factors.

The City of Eugene is attempting to pass a 5% limit and if a landlord goes over that limit up to what the state allows, the tenant can demand 3 months of market rate rent in relocation fees, meaning a landlord would have to pay the tenant $4500 to $8000+ in relocation fees.

They have also capped screening fees at $10.00 per applicant, which a lawsuit was recently filed over, they are attempting to limit deposit amounts, they want to make it so that a landlord cannot require over a 500 credit score and will only be able to require a certain amount of income for qualifying. 

The city is making being a landlord so confusing and cumbersome that those who choose to continue being landlords will need to hire property managers simply to comply with all the confusing laws and ordinances.

Eugene already has a low 1.5% rental vacancy rate. They are passing many other so called "renter protections" along with this one, ultimately it will push landlords out of the market, there will be less rental units, competition will increase for rental units and thus rents will increase. This will not help tenants but these activist city council members refuse to consider that. Portland has their own crazy local laws.

Unfortunately there are also calls at the state level to amend the rent control formula because of the 14.6% cap in 2023. I would not be surprised if this happened, it will also lead to less rental units statewide and less investment in the state.

For personal management, Avail has worked great for me and I recommend it to anyone who asks for recommendations. Not sure it would work great for people with dozens of properties, it might but I haven't used it to that caliber. It is also affordable at $5.00 per unit per month. You can create listings, accept applications and screen, receive deposit and rent payments, sign leases and addendums, and receive maintenance requests. 

I was working with a national lender on my last purchase, they lost documents multiple times, they communicated terribly, I was always talking to someone new when I called in and nobody knew what was going on with my personal case, the staff were always confused and didn't know what they were doing. Their level of incompetence pushed my close out 45 days past the original closing date. I will never work with a national lender again, especially PennyMac. Funny thing is, they still call me asking for me to buy a property with them because I have had mortgages sold to them. 

We ended up moving to a new lender, they were amazing, they communicated phenomenally, they didn't lose a single document, they remembered every detail of our case, and they closed us in a week. 

The lender you're working with matters immensely from my experience and I will never forget that.