"Nothing is more expensive than a missed opportunity"
Don't wait for timing dive in and it'll all come together. Best of luck!
The best time to invest is always now. No one knows when the markets are gonna take a turn for the good or bad, or which market it will be. There is always a bubble or recession looming somewhere. Like many have said here, focus on the fundamentals of the property and the cash flow associated.
The recession will start on 7/9/2020 at 3:25PM central time.
You heard it here first!
Originally posted by @Jay Hinrichs :Originally posted by @Michael Ealy:Originally posted by @Josh C.:
Just looking for clarification, you bought a quarter of all the apartments that were sale in 2013? In America? Thanks.
No, sorry. Me and my partner bought 28% of apartment inventory in Cincinnati, Ohio.
was that 1 out of 4 apartments that came on the market during that time or literally you and your partners own 25% of all standing MF in that city ? impressive either way.
this reminds me of a time years ago.. during the first real run up.. mid 80s on the west coast.. were 100k houses in SF bay area popped to 300 to 500k still a huge number in those days.
So I was up at Whistler in BC skiing and going up the chair lift with a nice couple from Vancouver.. and we talk about real estate at that time the Hong Kong Chineese were making a very serious run at every thing Vancouver getting ready for the 89 termination of British influence in Hong Kong and the prices were going up.. that couple said to me.. we are just going to wait for the prices to come back down.. and we were talking about nice SFRs in Vancouver at 200 to 300k.. well now same houses are 2 mil to 3 mil.. they never came back down.. and I don't know if that nice young couple ever pulled the trigger.. but I told them based on my experience in the SF bay area and the pacific rim buyer influencing our market I would not count on a big retreat in prices.. Of course they can happen but then at least as it realates to owner occ SF it seems to make new highs in the very strong coastal markets.. not so much in the middle of the country with Denver and north side of Chicago as exceptions..
28% of apartments that was put on the market during that year.
Yeah, it was a buying frenzy for me and my partner because at that time, a few investors were buying and we got our acquisition, renovation and property management "machine" set up.
In the words of the annoying Jim Cramer, "buy, buy, BUY!"
@Gadiel Del Orbe if you were buying at full market price, then I’m glad you pulled the breaks. The people who get hurt in the recession, are the investors who’s values crash because they purchased at inflated prices. Now is always the time to buy, if and only if, you buy smart!
@Gadiel Del Orbe , if you are planning to live in the house for a long time, it wouldn't matter if the market crash, because it will go back up.
Any “recession” forum post I see, I can’t help but click just to go see @Russell Brazil ‘s response :)
@Dave Thomson ahahahah. Me too. He’s the best. Also, I feel like there is a recession post every 30 mins.
@Gadiel Del Orbe more likely than a recession, rent control laws that are being passed in CA. A recession is two consecutive quarters with negative GDP growth. Thus far, we haven't had on quarter. Last quarter was over 2% growth and this quarter is projected to be 3%. So, the soonest possible time for us to go into a recession would be 6 months from now. Meanwhile, the economy is booming. I think you have been watching CNN too much.
In Real Estate the recession isn't and should be something from holding you back in investing. In fact, you should always invest even when the market is that. That's actually the best time because right now it's down but soon it will go back up. It always does.
The rule for the people that want to religiously abide by the recession's tide:
Sell High now (before the recession). Buy Low then (during the recession). Sell High after (once its past).
The successful real estate investors know how to surf the wave of the recession to perfection. Just know that while the hype is big, it's not doomsday.
With all of this being said, the media is making this bigger than it is because they ran out of stories on President Trump and they have to scare you now with something else so you pay attention and watch through the commercials. If you want to be safe stick around here in bigger pockets and you should be fine.
So what if there’s a recession? People still have to have a place to live. If you’ve done your homework and used realistic assumptions where actual data isn’t available, your investment *should* be relatively recession proof.
What happens in a recession? Economic activity slows and property values go down. Plan for 10-20% contraction in rents. It’s not all bad though, properly taxes follow property values so those should go down as well. Prepare to protest with documentation.
Unemployment may go down and tenants might be more at risk of losing their jobs. Screen your tenants more rigidly and have swift and rigorous eviction processes.
The fact that you’re moving into one side of the duplex you intend on buying is an even safer move. I understand the hesitancy but at some point you have to make a leap of faith because at the core of your investment is an inescapable element that you can’t avoid...risk.
You have to plan for risk and be ok with it. Acknowledge it, plan for it and if things go south...well, congratulations you learned something.
A prudent investment mentality isn’t right or wrong in every case. The question comes down to what is your plan with the property. Are you buying based on cash flow or appreciation? If you buy now and it cash flows you don’t need to worry about asset value if you have the percentage of cash on cash that you want and you plan on holding long term. Think in terms of income required each month and income you receive each month. If your plan is to buy and hope that any property just goes up, I suggest just going to Vegas and putting it all on Red on the roulette table because hoping it goes up is just a gamble if you don’t do the research and have a game plan. Remember money is made when the market goes up and when the market goes down.
One of the smartest investors of our life famously said “The best time to buy is when you have the money and the best time to sell is the day you die.”
Run the numbers and then do it again and make the decision you feel best with. If the numbers work don’t cheat yourself. But if they don’t you need to walk.
i don't think a recession is on the horizon. The Feds are about to lower interest rates again to stimulate the housing economy. People have a ton of equity in their homes thru the past housing failure and are in good shape to sell , the problem is the seller inventory is low and its a seller market.
Try and find a deal, that is the most important thing in these times. If the duplex wasn't enough of a deal to be able to move forward then that is good. You want to be sure you'll hit at least a solid base hit. In times like this, you need to analyze what your exit strategy will be for any given deal and then run stress tests on it to see what you could handle in the event things got worse. For example, run your numbers as you think they will be, then run them with vacancy factors, with lower rents, with longer hold periods, and see if you'll be able to hold on through a downtown. The long and short is, if the deal is good enough, there is never a bad time to invest. So, find a good deal. Off market is a great way to find deals.
Sam Zell would smile and tell you to get your dancing shoes ready, just looking at all the "keep buying" advice on this post.
Looks like you've had a bit of response already. Since you'll most likely look to get a loan as a first time buyer, you'll want to take advantage of these historically low interest rates. Have you thought of living in one half of the duplex and renting the other half to pay your mortgage? To answer your question, the housing market will have to drop to below 2010 levels for it not to make sense to buy now, especially if you find yourself a deal. Los Angeles is one of the hottest markets in the country right now and we don't foresee the housing market taking that steep of a hit anytime soon. Hope this helps!
Buying the correct way is recession proof. What I mean to say...find a great deal on a duplex or triplex...a great deal in LA is not the same as one in Atlanta so it’s relative. By having multiple family other people will pay your mortgage...you can practice being a landlord. It’s not a commercial loan. And having rentals in a strong market or a recession is always needed. In LA some will never buy and there will always be renters so others are always paying your bills.
Recession is not negative it is opportunity. If you buy before just make sure the numbers work and you are good no matter what. The value of the asset doesn’t matter if you are playing the long game because what goes up must come down...but it will rise again.
Go. Buy. Invest!
If you are investing for the long term, and you have good cashflow from rents to help you hold during a potential downturn, I'd say there is no time like the present to start investing. Investors who are looking to flip need to watch the market closely. I started my investing portfolio in the last market peak. I held though the "great recession" and made cashflow from rents during that time. My properties are worth about 40% more than when I bought them at the last peak. Dive in. And have a smart plan in place to hold through the downturn if and when it comes.
If your numbers are good and you can create cash flow from the other side, I think this sounds like a good investment. Your timing is very good, interest rates haven't been this low in more than 2 years, and the best minds are saying the pullback next year will be mild, maybe 5% to 10% max nationwide.
I've made this video which explains why one should be careful with markets such as LA and aim for more linear markets instead, especially as a Beginner.
In 20+ years of investing in the Denver and front range markets, we were never certain it was a good time. If the economy was booming, were we buying at the peak? If the economy was failing, would it get worse? (I can remember a time we went 5 months with a vacant rental.) We invested what we could with the money we had at the time and then worked hard and hung on long term. Now I wish we'd taken more chances earlier on. :) Good luck to you!
I’m in East Tennessee. No income tax, low cost of living, mild seasons, low unemployment, the economy is red hot. I haven’t advertised an available rental in the past three years. If one of my rentals is going to become available, I have several fresh applications before the tenant moves out. In this economic situation it would be hard for you to miss.
Predicting the market is a monstrous waste of time and energy. Buy and hold investments are naturally immune to cycles.
There are still some great opportunities in LA. Finding the right place might take some time as there are often competitive bids. If the numbers work, you can have a great cash flow and the ups and downs of the market don’t matter. I’m working with investors now in the area. Send me a message if you’d like to talk further. Wishing you the best in this next step.