All Forum Posts by: Ed L.

Maybe I'm not a hustler like some, but if I know a house is worth 93,000 after repairs and the seller is asking $90,000 I'm not wasting my time.

There are 2,000 homes on my MLS that are listed at or slightly below ARV so why waste time on this one??

Seems like it would be much easier to start finding vacant homes listed on the MLS where the owners have moved out of town and just start making low ball offers..

Congrats and thanks for sharing! Hope it all works out.

Me and one of my agents had such a bad streak of deals falling through we made a pact not to calculate commissions till closing day lol...

The thought of buying properties out of my market/state has crossed my mind, but after owning multiple rentals for a few years know I would not even consider it anymore.

I've seen first hand how crappy property managers can totally destroy a home by selecting bad renters, and then not properly handling turnover, maintenance, etc....

Then there's the issue of overpaying because you aren't familiar with the foreign market. You are at a disadvantage to every investor in that market and will likely overpay as a result.

I'd probably invest in a Real Estate Investment Trust instead of buying out of state at this point in my career.

I find that most people prefer all electric in my market "mild winters".

I personally prefer gas, but will swap it for electric if it's the last piece of gas equipment.

Some people are intimidated by cooking on gas stoves, and others just dislike having another bill to worry with.

I'd sell it and re invest the profits locally... My furthest rental is 20 miles from home and it's a pain in the neck managing it myself.. Heck Ideally I'd just like to buy a city block and be done with it all...

Sounds like you have a good bit of equity depending on how much work is needed to get to arv...

Lizards in the vinyl siding. Hundreds upon hundreds of green lizards. It was strange, but they didn't bother anything or make their way inside so I didn't worry about them much... Then there was this guy under the back deck at the same house...

Sorry to hear about the situation, but how did the lender discover you were not OO the property?

I'm just interested for future reference. I've never had a lender check or validate anything post closing.

I would definitely get your license. It's the cheapest and easiest investment you will make in your real estate career and it will open up a lot of options.

You will have access to the local MLS which is more up to date and has more powerful search tools than most RE websites.

You will get a 3% discount on every property you purchase.

When a new property comes on the market you will have instant access instead of waiting on your agent.

You don't have to hassle with a Agent when it comes to writing countless offers.. I hate inconveniencing people and truth is most of the properties I write offers on are not accepted. I probably write 10 offers for every 1 that is accepted.

You will gain a better understanding of the laws involved with real estate.

Last but not least you will undoubtedly make money off of being a agent. Just tell all your friends and family and eventually they will need to buy or sell something.

@Bojan Kovacevic

Land values are driven by supply, and demand....

Many times coastal cities have high land values because they are landlocked from expanding by the bordering ocean or river. Same can happen if a city is surrounded by government owned/controlled land such as a national forrest. They simply run out of land to build on that is within a reasonable commuting distance from the city center/job center.

Lack of supply can drive up demand and what people are willing to buy....

This isn't a major problem as long as wages are correspondingly high and average people can afford to keep buying average properties..

You have to look at the average wage and what it takes to qualify for a average property..

For example,

Assuming a average home in Vancouver is going for $750,000. Using a 30yr mortgage, 20% down payment, 4% interest, 1% annual property taxes, and 1% annual insurance premium.

That means the average person in Vancouver is going to need a $150,000 down payment, and a income to support a $4,200 mortgage for 30 YEARS...

That means that the average person is going to be spending $50,400 a year on their mortgage payments.

Not sure about Canada, but in the US banks will not loan if your annual mortgage payments is greater than 28% of your gross income.

That means a person buying a $750,000 home in Vancouver will need to be making at least $180,000 per year on top of the $150,000 down payment...

Here's the twist- If the median income in Vancouver is $200,000 then there wouldn't necessairly be a bubble.. Just a comparatively pricey real estate market brought on by unusually high incomes...

The problem is "The average income in Metro Vancouver in 2009, was only $41,176"

"Only 0.56 per cent of British Columbians declared incomes higher than $250,000, says Andrew Romlo, executive director of Urban Futures, which studies demographics. That’s less than the proverbial 1 per cent that owns everything."

I found a interesting article while trying to find statistics on median income for Vancouver... http://www.theglobeandmail.com/life/home-and-garden/real-estate/for-vancouver-housing-and-income-dont-add-up/article12436288/

So yes you are in a bubble market.. If/When it will pop is anyones guess, but make no mistake values are out of whack and will try to correct themselves... In my opinion it can't happen soon enough..

Typically with bubbles it's the land values that are out of whack..

There's nothing magical about home values. It's a product comprised of labor cost, material cost, land cost, utilities, permitting, etc...

In my market and most of the South East you can build a nice 2,500 sq/ft home for approximately $100 per sq/ft.

Adjusting for higher wages and slightly higher material cost let's assume it cost $150 to reconstruct a home a home in your area.

2,500 sq/ft x $150 per sq/ft = $375,000.

Now you can deduct the new home value from the average price of a home in your market. $750,000- $375,000= $375,000 in just the tiny postage sized plot of dirt the home sits upon. That's where the inflation is, and yes it's absolutely ridiculous...