Bubble, Bubble, toil and trouble
Investor · Port Charlotte, FL · Member since 2017 · 58 posts · 35 votes
Bubble, Bubble, toil and trouble
Most Popular Reply
Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
8yOriginally posted by @Joe Villeneuve:
Originally posted by @Grant Rothenburger:
Stage two bubble... Dang I wasn't even aware.
I feel slighted. I missed stage 1. Where was I?
Probably busy out buying quality assets that help you meet your goals instead of playing amateur macro economist.
81 Replies
- Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes8y
BUY rentals who cares up or down 10 15% , you still collect your cash. All the best to everyone.
- Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes8y
@Bill F. you said it a bit more PC than I would have :) So many try and time the market perfect. Who gives a crap, as long as like you mentioned , you are meeting your goals!! All the best to you ,
- Investor · Alameda, CA · Member since 2016 · 132 posts · 170 votes8y
My physician recently told me that if I didn't cut back on the caffeine intake and junk food that i'd be looking at a 'stage 2 bubble,' myself. Take care of yourself, folks!
- Investor · Eugene, OR · Member since 2013 · 30 posts · 15 votes8y
- Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes8y
Originally posted by @Omar Khan:
Originally posted by @Andrey Y.:
Originally posted by @Sam Josh:
Fact is since the beginning of June which is supposed to be high sale season, Home sales have slowed, DOMs are up and prices are dropping.On my own properties here in the SF Bay are I have seen Zillow values roll back by 100k. Now keep in mind these prices were going up by nearly $50k per month or more for the last 12 months prior, so we got to come out and say that the market is exhausted after running super fast, the buyer does not want to over pay any more.
At the same time lots of new construction has come along. Lots of condo unIts and townhome development. If this situation persists prices have to keep coming down and normalize. Remember this is all just an outcome of demand and supply and not some exogenous event where banks are going belly-up etc which was what happened in 2008 starting with countrywide, Wachovia, WAMU etc.
California and some other coastal markets have seen a 1-1.5% drop in property values monthly since Mayish. That said, real estate is local. I predict that many markets will see a correction to early 2017 values, by early 2019.
All of my investments for 2018-2019 are going to fund self storage and manufacturered housing, both of which have proven to provide positive returns in the worst of times.
Nothing is recession-proof nor recession-resistant.
I know manufactured housing and self-storage are the hot places to invest these days but they, too, are suffering from the same issues - massive spike in prices (over the past few years) and everyone stampeding to get into these assets.
If you look across the major syndicators, you will note that their return projections are going down to account for the increase in valuation increases.
Now you might have an edge in manufactured housing/self-storage facilities because you can source deals better than the average person but contagion risk always exists.
@Jay Hinrichs can chime in and tell you all about sure-fire recession-proof investments that purported to offer positive returns in the worst of times and then acted like any other real estate investment.
That may be true, but there are specific economic, psychologic, and demographic reasons why self storage is in demand in both times of prosperity and recession. For manufacturered housing, the fundamentals work better in recessions than expansion. The same cannot be said of residential, commercial, office, retail, or industrial.
- WorldWide · Member since 2016 · 1k+ posts · 1k+ votes8y
Originally posted by @Andrey Y.:
All of my investments for 2018-2019 are going to fund self storage and manufacturered housing, both of which have proven to provide positive returns in the worst of times.
Folks on here had mentioned before that self-storage is one of the first splurges to go, as people don't want to pay to store their junk when shtf.
- 8yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
Originally posted by @Victor S.:
Originally posted by @Joe Villeneuve:
Originally posted by @Dave Carella:
@Joe Villeneuve I Guess 2008 was nothing AND NOBODY saw it comming
2007, 0006, etc...
Oh, and let's not forget the years 2018, 2017, 2016, 2015, 2014, 2013, 2012, etc...
Why? A lot of people (experts) saw it coming then too. Funny how we'll forget that a lot of them saw it every one of those years, but the only year we'll remember them predicting, is the year it actually comes...and they will say, "see I told you so", and be declared an expert.
not verbatim, but the economists have predicted 9 out of the last 5 recessions...
something tells me we'll have issues in tech, as those valuations cannot keep going up infinitely (kinda like RE on the west coast).
...and they also predicted recessions in almost every year before and after.
- Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes8y
Originally posted by @Jeff S.:
I have seen him on Youtube , he's pretty over the top and dramatic but I guess that helps to get the views. I know he did mention his "real estate is crashing" belief is based on his local market where he is an agent , which seems to be Ventura County in Southern California.
In L.A at least things are still going under contract quick if priced right and multiple offers...and prices are at all time highs..so don't see signs of a crash here , now at least.
Sales are down in Southern California, but that is because there is little inventory.
CNBC recently put out this article. Of course they make the headline dramatic but it makes sense sales would be down if inventory is low.
Southern California home sales crash, a warning sign to the nation""https://www.cnbc.com/2018/07/24/southern-california-home-sales-crash-a-warning-sign-to-the-nation.html
- Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes8y
Originally posted by @Joseph M.:
Originally posted by @Jeff S.:
I have seen him on Youtube , he's pretty over the top and dramatic but I guess that helps to get the views. I know he did mention his "real estate is crashing" belief is based on his local market where he is an agent , which seems to be Ventura County in Southern California.
In L.A at least things are still going under contract quick if priced right and multiple offers...and prices are at all time highs..so don't see signs of a crash here , now at least.
Sales are down in Southern California, but that is because there is little inventory.
CNBC recently put out this article. Of course they make the headline dramatic but it makes sense sales would be down if inventory is low.
Southern California home sales crash, a warning sign to the nation""https://www.cnbc.com/2018/07/24/southern-california-home-sales-crash-a-warning-sign-to-the-nation.html
Not only sales, prices too about 1% per month since the end of May.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Andrey Y.:
Originally posted by @Omar Khan:
Originally posted by @Andrey Y.:
Originally posted by @Sam Josh:
Fact is since the beginning of June which is supposed to be high sale season, Home sales have slowed, DOMs are up and prices are dropping.On my own properties here in the SF Bay are I have seen Zillow values roll back by 100k. Now keep in mind these prices were going up by nearly $50k per month or more for the last 12 months prior, so we got to come out and say that the market is exhausted after running super fast, the buyer does not want to over pay any more.
At the same time lots of new construction has come along. Lots of condo unIts and townhome development. If this situation persists prices have to keep coming down and normalize. Remember this is all just an outcome of demand and supply and not some exogenous event where banks are going belly-up etc which was what happened in 2008 starting with countrywide, Wachovia, WAMU etc.
California and some other coastal markets have seen a 1-1.5% drop in property values monthly since Mayish. That said, real estate is local. I predict that many markets will see a correction to early 2017 values, by early 2019.
All of my investments for 2018-2019 are going to fund self storage and manufacturered housing, both of which have proven to provide positive returns in the worst of times.
Nothing is recession-proof nor recession-resistant.
I know manufactured housing and self-storage are the hot places to invest these days but they, too, are suffering from the same issues - massive spike in prices (over the past few years) and everyone stampeding to get into these assets.
If you look across the major syndicators, you will note that their return projections are going down to account for the increase in valuation increases.
Now you might have an edge in manufactured housing/self-storage facilities because you can source deals better than the average person but contagion risk always exists.
@Jay Hinrichs can chime in and tell you all about sure-fire recession-proof investments that purported to offer positive returns in the worst of times and then acted like any other real estate investment.
That may be true, but there are specific economic, psychologic, and demographic reasons why self storage is in demand in both times of prosperity and recession. For manufacturered housing, the fundamentals work better in recessions than expansion. The same cannot be said of residential, commercial, office, retail, or industrial.
if by manufactured housing you mean MH parks.. one thing about those is that once they are up and running they are pretty solid I have owned 4 over the years.. I do value add and sell them.. as I don't hold things.. I have owned storage as well.. I see storage as a small business and I loved mine.. but I see it as more of an operational type business simply because you have more turn over and such compared to parks.. you get the right parks and you have ZERO turn over.. now low end rat trap parks are tougher of course I am talking about what I call investment grade parks.. and they trade at low cap rates but if you can move rents over time.. they are solid.
One of these days I am going to go on the hunt for airport land and build hangers those are some pretty solid rentals..
- Real Estate Agent · Phila, PA · Member since 2017 · 69 posts · 19 votes8y@Dave Carella doesn’t the market slow down in August usually? I don’t know florida but I noticed a price dip in my market also.
- Rental Property Investor · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes8y
Originally posted by @Jay Hinrichs:
Originally posted by @Andrey Y.:
Originally posted by @Omar Khan:
Originally posted by @Andrey Y.:
Originally posted by @Sam Josh:
Fact is since the beginning of June which is supposed to be high sale season, Home sales have slowed, DOMs are up and prices are dropping.On my own properties here in the SF Bay are I have seen Zillow values roll back by 100k. Now keep in mind these prices were going up by nearly $50k per month or more for the last 12 months prior, so we got to come out and say that the market is exhausted after running super fast, the buyer does not want to over pay any more.
At the same time lots of new construction has come along. Lots of condo unIts and townhome development. If this situation persists prices have to keep coming down and normalize. Remember this is all just an outcome of demand and supply and not some exogenous event where banks are going belly-up etc which was what happened in 2008 starting with countrywide, Wachovia, WAMU etc.
California and some other coastal markets have seen a 1-1.5% drop in property values monthly since Mayish. That said, real estate is local. I predict that many markets will see a correction to early 2017 values, by early 2019.
All of my investments for 2018-2019 are going to fund self storage and manufacturered housing, both of which have proven to provide positive returns in the worst of times.
Nothing is recession-proof nor recession-resistant.
I know manufactured housing and self-storage are the hot places to invest these days but they, too, are suffering from the same issues - massive spike in prices (over the past few years) and everyone stampeding to get into these assets.
If you look across the major syndicators, you will note that their return projections are going down to account for the increase in valuation increases.
Now you might have an edge in manufactured housing/self-storage facilities because you can source deals better than the average person but contagion risk always exists.
@Jay Hinrichs can chime in and tell you all about sure-fire recession-proof investments that purported to offer positive returns in the worst of times and then acted like any other real estate investment.
That may be true, but there are specific economic, psychologic, and demographic reasons why self storage is in demand in both times of prosperity and recession. For manufacturered housing, the fundamentals work better in recessions than expansion. The same cannot be said of residential, commercial, office, retail, or industrial.
if by manufactured housing you mean MH parks.. one thing about those is that once they are up and running they are pretty solid I have owned 4 over the years.. I do value add and sell them.. as I don't hold things.. I have owned storage as well.. I see storage as a small business and I loved mine.. but I see it as more of an operational type business simply because you have more turn over and such compared to parks.. you get the right parks and you have ZERO turn over.. now low end rat trap parks are tougher of course I am talking about what I call investment grade parks.. and they trade at low cap rates but if you can move rents over time.. they are solid.
One of these days I am going to go on the hunt for airport land and build hangers those are some pretty solid rentals..
Most folks on BP aren't buying investment-grade MH parks. These are low-end rat traps with rents between $200-350 rents. Folks serious discount the operational/asset management side of owning these assets. It always surprises me that the same folks would avoid buying Class D MF properties but somehow cater to the same demographic when it comes to MH parks.
I get that the rents are different and that the MH park is MH in name only as it costs a lot to move your home. But the demographic challenges remain the same. The solid operators have asset management experience which doesn't get as much attention from the average investor because it is not a sexy part of the business.
Are hangar rents similar to industrial properties (but with even less headaches and more expensive assets parked in them)?
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Omar Khan issue with low end parks and I just flipped one.. Is that as you state the rental demographic is TOUGH.
also in our state trailers that are older than a certain age may NOT be moved on the highway you have to tear them down on site and haul to the dump.. LOL.. so that's expensive.. and you simply cant buy used trailers very hard to find in our area.. one because as stated you cant move them legally..
Aircraft hangers are extremely passive .. and many are rented to very high net worth type folks who keep their car collections in them build a man cave in them.. have their million dollar motor home in them.. and of course their aircraft.
I bought our hanger it was a condo project.. so we have an HOA and a ready room.. but if I look at my neighbors one is Warn winch's they have a 3 hanger set up a Citation jet a Beech 1900 a war bird a L 39 single pilot jet trainer motor home car collection boats you name it.. right across the taxi way is a Citation jet and office .. guy next to us has his bonanza and his shop to wrench on things and so on and so forth..
you can also provide smaller T hangers that will be more transient.. but generally speaking they are about as passive as one can get.. pretty hard not to pay 500 a month to park your 5 million dollar light jet..
We had 2 Cirrus Sr 22 's in ours and a Champ the Champ is a tail dragger and built in the 40s its my partners I have not flown it don't like flying airplanes older than me.. :).. plus our basic storage needs and over flow of toys.. but we paid 250k for it.. its 60 wide 40 deep... big sliding doors electric doors can cost a bunch.. I know this is anti BP who pays 250k for parking and storage ??? I can hear the gasps now... your crazy you could buy 10 homes in Detroit and cash flow 8k a month.. well I guess we could :)
- Member since 2018 · 1 post · 0 votes8y
Hello Dave, I think buying homes should be looked at like buying stocks. When it comes to buying and selling. The numbers don't lie. So if the math works pull the trigger. I heard a interview with Warren Buffet the other day. And he asked " Do you know any super rich economist, Because he doesn't know of any." I just keep my head down and work my plan. Don't get distracted by the noise. Live by the math.
- Rental Property Investor · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes8y
Originally posted by @Jay Hinrichs:
@Omar Khan issue with low end parks and I just flipped one.. Is that as you state the rental demographic is TOUGH.
also in our state trailers that are older than a certain age may NOT be moved on the highway you have to tear them down on site and haul to the dump.. LOL.. so that's expensive.. and you simply cant buy used trailers very hard to find in our area.. one because as stated you cant move them legally..
Aircraft hangers are extremely passive .. and many are rented to very high net worth type folks who keep their car collections in them build a man cave in them.. have their million dollar motor home in them.. and of course their aircraft.
I bought our hanger it was a condo project.. so we have an HOA and a ready room.. but if I look at my neighbors one is Warn winch's they have a 3 hanger set up a Citation jet a Beech 1900 a war bird a L 39 single pilot jet trainer motor home car collection boats you name it.. right across the taxi way is a Citation jet and office .. guy next to us has his bonanza and his shop to wrench on things and so on and so forth..
you can also provide smaller T hangers that will be more transient.. but generally speaking they are about as passive as one can get.. pretty hard not to pay 500 a month to park your 5 million dollar light jet..
We had 2 Cirrus Sr 22 's in ours and a Champ the Champ is a tail dragger and built in the 40s I think its my partners.. plus our basic storage needs and over flow of toys.. but we paid 250k for it.. its 60 wide 40 deep... big sliding doors electric doors can cost a bunch..
That's not a bad deal on your hangar!
I gotta start making more money/win the lottery and then convince you to become my guru. Your wealth of knowledge + common-sense (the hardest thing to acquire!) would propel me to the stratosphere. Plus, I'm sure a ride on your Cirrus wouldn't hurt also ;)
- Investor · Austin, TX · Member since 2013 · 933 posts · 1k+ votes8y
I like these 3 for starters based on historicals and how they hold up better than other niches during downturns. Start there. There are certainly other factors to take into consideration once you've identified a niche including the specific market, deal and team to further minimize your risks.
- Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes8y
Originally posted by @Matt Tallent:
@Dave Carella doesn’t the market slow down in August usually? I don’t know florida but I noticed a price dip in my market also.If that helps you sleep at night.
Stock market traditional has a slow August. Not real estate. Summer is typically the hottest time. Its nothing more than the start of a correction (May '18 - )
- Rental Property Investor · Greenville SC & Phoenix, AZ · Member since 2011 · 109 posts · 28 votes8y
Love the hangar biz, but it too can be tricky.... @Jay Hinrichs @Omar Khan. Currently at SDL airport we are finishing two new 30,000/sf corporate hangars and the redevelopment of the "terminal building" - an office building of 24,000/sf. Next up is 18 box hangars at SDL. Fun projects...info available here https://www.scottsdaleaz.gov/airport/terminal-area-redevelopment/terminal-project
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Andrey Y.:
Originally posted by @Matt Tallent:
@Dave Carella doesn’t the market slow down in August usually? I don’t know florida but I noticed a price dip in my market also.If that helps you sleep at night.
Stock market traditional has a slow August. Not real estate. Summer is typically the hottest time. Its nothing more than the start of a correction (May '18 - )
Not necessarily Andrey lots of people this year have money and they are taking that vacation that they had been putting off.. the hottest sales months are early spring..
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Account Closed:
Love the hangar biz, but it too can be tricky.... @Jay Hinrichs @Omar Khan. Currently at SDL airport we are finishing two new 30,000/sf corporate hangars and the redevelopment of the "terminal building" - an office building of 24,000/sf. Next up is 18 box hangars at SDL. Fun projects...info available here https://www.scottsdaleaz.gov/airport/terminal-area-redevelopment/terminal-project
I have to think Scottsdale would be a winner.. I just know that everytime I went looking for a hanger it was get on a wait list .. that's why we ended up buying ours when the opportunity arose.. And they sold very quickly.. of course its location cant just pick an uncontrolled field in the middle of no where USA. :) but for ease of management seems pretty passive to me especially T hangers.
- Contractor · Canton, GA · Member since 2015 · 107 posts · 81 votes8y
I agree with you that hanger living is a market. My father lived in one temporarily because he liked having a shop ,storage, and rough industrial living. In Florida , there are people who do this under the radar. You have the advantage of efficient and spacious living but also minimalist. $250k is a nice hanger and for a commercial space , really , not that bad. There are markets for this and others that are not as high scale but are not easily to find.
- 8yGreg GaudetPro MemberInvestor · Pukalani, HI · Member since 2017 · 413 posts · 291 votes
I'm on the opposite side of the world from Florida (which was my original market when I was an appraiser pre-2007).
But here in Maui... or more specifically in the one building that I focus most of my efforts on, prices have been shooting up over the past year. The average sales price for condos in the building that I own in and focus on has increased 25% since this time last year. And the list prices have almost doubled (It is important to note that in this particular building sales prices are 80-180k, so it's a lot easier for them to double compared to most RE in HI that sells for 800k-1.5M) Although Hawaii tends to follow about 6 months behind the west coast, or so they say!
Personally I wish the prices would stay down so I could acquire more units! But either way, I feel as though I have enough cash flow and equity to weather the storm if all the doomsday preppers are right. Hopefully I'll have enough funds to capitalize on the event too because I'm still forgiving myself for not accepting some of the counter offers I was given 5-7 years ago!
- Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes8y
Originally posted by @Duane Marcy:
I heard a interview with Warren Buffet the other day. And he asked " Do you know any super rich economist, Because I don't know of any."
LOLOLOL. I'm going to remember that. My friend used that line when a buyer backed out of his deal due to advise from his lawyer. My buddy was like "How many truly rich lawyers do you know?" In context, my buddy had made about $50m in mulitfamily over the last 10 years. Mostly because he didn't take the advice of risk adverse lawyers.
- Investor · Indianapolis, IN · Member since 2015 · 270 posts · 217 votes8y
Originally posted by @Joe Villeneuve:
Are those the same words we've been hearing every year for the past <this is where you fill in the blank with as many years back as you can remember> years?
Better to be a month early than a day late.
- 8yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
Originally posted by @Sam B.:
Originally posted by @Joe Villeneuve:
Are those the same words we've been hearing every year for the past <this is where you fill in the blank with as many years back as you can remember> years?
Better to be a month early than a day late.
Better to prepare, than to panic.
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