All Forum Posts by: William C.

The residential market had a slow down during the autumn market.   For investment real estate, multi-family sales volume was down last year, suggesting over-pricing for some assets.   And the profit margins for flips have been compressing the last few years.  This crowd was complaining their finished inventory sat on the market too long late last year.   But I see no indication that there is a sudden increase in "flip worthy" properties.  Those still get snatched up.

A coming recession may be on the way, but there are still some positive indicators in the economy such as high employment levels and increases in wages in certain sectors.  More important, lending is still active, including well defined hard money.  Experienced, hard money lenders in my market are not taking back properties in a significant way - a metric that I find to be predictive.

There's always a niche in any market to invest in.... Just need a lil thinking outside the box. Besides when the feds announce no rate hikes for a year, then dont expect a real recession in the housing market, especially since we are still below 3% inflation rate. Its going to be more of a global issue at this point. When and "IF" a recession occurs, its only going to bring the prices down around 15%-20% (mild recession). Personally I dont think there will be one. Maybe a slow down (sideways market). I would just be picky on what areas I would invest in (small market areas). Lucky for me im in florida.. why do I say lucky? Lets figure this out.. we still are in a very low interest rate level. This year is when the tax rate on high tax areas like N.Y. will hit people hard for the first time. Baby boomers are in the retirement stages by now. Florida  has no state tax. And spring time is the begin time of when northern areas start putting their homes on the market to sell after the winter. Like my favorite saying "Do the math!" Get ready to here how florida will be the only booming market and probably only state that doesn't get a recession affect.

@William C. We invest In Philadelphia and find it fairly difficult to find deals. We are looking all the time.

So what do buy and hold people do in the event of a RE crash?

I've been thinking about it for a while...and it could be a good thing. Rents don't seem like they crash along with prices...so if I find a place that is distressed and buy it with private money and refi then it could work out still.

Could someone check my logic?

@William C.

I would say it depends on the market and property type. Even the 2008 recession didn't really have a major impact in certain markets. For example, where I live (which I consider to be the tertiariest of all teritary markets), the real estate crash back in 2008 didn't have as much of an impact as other more desirable markets. If anything, it was the fall out from the 2008 market crash that made the folks in our area suffer due (e.g. job loss, stock market crash, etc.). But the housing prices didn't drop the way that you saw in other markets. 

I could see prices falling down in some markets. Even drastically in some areas. But 2008 was a pretty special time. While we could have another dip in the real estate or the stock market, I don't think it would happen for the same reasons. But who knows? ¯\_(ツ)_/¯

Just out of curiosity, what does $300k-$350k get you nowadays near Philly? 2000 SF ish homes?

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@William C. Open houses I go to in San Diego have fewer bids. Two separate property managers have told me they have had to lower rent expectation by $100/m against the owner’s wishes get new renters in units.

@William C.

How do you determine how much a home will net on a flip? I just applied to get my real estate license and want to prepare in case I have buyers who are home flippers. Will be a real estate agent starting in April.

Thanks for your time!

@Jay Hinrichs Hey Jay, I was reading that a year ago approx. 40 of the primary 300 plus (or 200 or more they monitor) US markets were already showing major signs of a 'correction...' but of course nearly ALL of those main metros also have micro demographics therein with neighborhood market maturation stats that are not "the average" brush bristles the faux media tends to paint the "herd" into the corral with, about every decade to get them to 'stampede' for the exit doors, only to get 'slaughtered,' time, and again! (And some areas will mostly remain up, down, or 'correct' up to 50% plus either way, so knowing what to be in or not, where, when and why (so you realize when to EXIT) are all valid concerns! 

I believe I have a better 'approach' than this "buy -n- hold" mentality that remains almost entirely beholden to whims of a highly controlled and regulated "casino play..." just like the rest of their "what goes UP, must come down, roller coaster" games. And like ANY 'commodity,' homes that are bought and resold like clockwork ultimately can 10- 100X say a 15- 30 year play, with 3:1 interest, to principal... so it amazes me that ANYONE is still buying, holding and "renting" SFRs, in the 21st Century?! (Unless they EXIT prior to every correction. And good luck, with that!) 

I know noone wants to tie- up $500k. plus into the aforementioned in "investor unfriendly" California, however if they opted to "think outside the box..." they might even 'rethink' their perspective, in lieu of what I'm envisioning??? If you know of anyone that would consider acquiring properties in the North Bay, etc., I just rented a place in Calistoga, last month. (I couldn't stand the heat in the Valley of to much sun... so I came back to Cali, for now, and Sonoma and Marin counties were a total "rat race..." so I am for now, in a town with minus 6000 people?)

The pre- foreclosures here (Napa, Sonoma, Marin counties, the Bay Area, Sac, etc.) are definitely intriguing me, especially after the additional things I've leaned (and since thought of, that relate) recently regarding what to do with these "little to no equity" homes x10 - 15 million, just in the US. I need to find a few (then more) "private lenders" and utilize OPM while paying them well to do some 60- 120 day deals (i.e. Cash resales, vs. lease purchase deals) so if you see anything that looks 'intriguing' near me to check- out and/ or know of any investors (for either California north, south and/ or in NV, AZ, etc.) I suspect the ROI will exceed the alternatives the vast majority of these guys are making, elsewhere (i.e. Like 99% of them...) precisely because I'm not your average "cud chewer, grazing on conformity..." until they close my CQV 'trust' account. ;-) Let me know if you want to know more about what I'm eluding to here? ATB :-) Scott T.

Everyone seems to think they are Nostradamus....but I dont seem to see any billionaires posting in these forums, which everyone would be if they could predict the market like they think they can.

I remember in 2015, we all said the same thing in NYC CRE. Market was turning etc etc. Volume slowed down, prices went up or stayed the same (flight to quality), and then the market continued to go up from 2015-2019 lol. But I do agree the bull run needs to stop at some point

Deals are still hard to find here in NY/NJ. But well priced properties are still selling if priced slightly under market. Being the most expensive house on the block is a scary place to be right now. I've stopped taking any project above $1.5m and ones that have to have an ARV near the top of that market.

I don’t even understand people taking on expensive new construction deals right now in my areas. Betting and needing top dollar on a property that won’t even hit the market for another 18-24 months seems insane to me. But there are builders left and right breaking ground right now.