Curiosity, sharing, & mutual learning + reaching out: a success story

3 Replies

Lesson learned:

Don’t underestimate yourself or be shy to reach out to the best in your field.

(Hopefully with some value or interest for them, also)

Was there a time you surprised yourself by reaching out to other investors? Or had a mutually beneficial exchange with someone you never thought you would meet?

What do you think of the analysis?

Please share below!

I was honored to sit down to learn from a great Bay Area researcher last Friday, and then to be the impetus for the immediate update of a must-read SF market analysis - with a shout-out to my real estate research on cyclical tops and bottoms in the SF Bay Area, that I partially shared on BP also. In this case, my curiosity, diligence, and taking the time to reach out and share my ideas with someone “WAY ABOVE MY LEVEL,” ended up being a really fruitful exchange of information for both of us, it seems. I wouldn’t have ever dreamed it would be so easy to make a great connection by sharing what I have, and was working on, and was a lesson to me.

“My gratitude to J. Thomas Martin of the SF & East Bay Real Estate Networking Group for bringing his excellent analysis of affordability rates to my attention and allowing me to piggyback on it.”

Patrick Carlisle, Chief Market Analyst, Paragon Real Estate
(Quoted from his excellent report from Paragon, below. Definitely read the entire thing if you never have before. Patrick does really great analysis of the SF Bay & RE cycles.)

http://www.paragon-re.com/3_Recessions_2_Bubbles_and_a_Baby (scroll down to HAI section, which didn’t exist before I met with Patrick last Friday, 4/24 ;)

GTD Inspiration – ALL ABOUT TAKING ACTION

In a way, this is a little bit of a repeat of the SF Real Estate Summit that I put on last November (with the 2nd annual event in planning..):
By reaching out to those more successful than myself, and showing them the effort I’m putting into creating something valuable for everyone, it attracted amazing investors I never could have imagined! It all started with going to a meetup, forming one of my own, meeting Josh & Brandon, and deciding to take action from there. Many probably could have done it. But certainly many did not.

HOW IT WENT DOWN
After being inspired by great students of history like Bruce Norris and @Minh Le , I wanted to learn more about the historical housing affordability index for the Bay Area. I have a feeling my lower-end properties would be most susceptible to a large downturn. So I downloaded the data about a week ago, and got to work in Excel. With some feedback/discussions on BP and with colleagues, I beefed up my analysis, and decided to make a presentation for the first time at my SF meetup last Wed to share what I learned.

Thinking of why the HAI wasn’t included in the Paragaon analysis, I sent the analysis to Patrick on Thursday to reach out and get his opinion, then asked to meet him on Friday. And a little to my surprise, he said yes! I sat down with him for about an hour on Friday and chatted about cycles and affordability. Three days later, he had already updated his analysis with the HAI analysis and a shout-out ;)

THE “HOW” AND “WHY”
One thing I asked Patrick about is the “why” and “how.” We see prices have gone crazy after each recession from his excellent analysis we have bantered around. But why do they go that far, and how? How do interest rates, income increases, inflation, etc relate to those increases?

Much like @Amit M. , his first thought was that the HAI may not be relevant for the higher-end areas that Paragon focuses on, such as SF, San Mateo, & Marin counties - because of cash buyers, tech money, rent control in SF, and the other factors that separate income from likely buyers supporting the market. I think that while the HAI may not be a great predictor of the % of eligible buyers in any given year, there seems to be historical highs and lows in HAI that applies to all counties, including high-end ones.

There used to be cash buyers, tech money, rent control in SF, inflation, rent increases, etc back in the prior cycle also. And the one before that. And HAI extremes still preceded reversals in prices.. These fluctuations are more pronounced in Santa Cruz, Santa Clara, Alameda, Contra Costa, and Sonoma Counties. But they still exist in the “higher end” counties also (or are things "different" this time?). By the end of our conversation, Patrick found enough significance to include HAI in his analysis, although he thought the convergence idea would be more difficult to understand and analyze for retail buyers..

Was there a time you surprised yourself by reaching out to other investors? Or had a mutually beneficial exchange with someone you never thought you would meet?

What do you think of the analysis? Hold any water?

Please share below!

Medium logoJ. Martin, SF Bay Summit | [email protected] | 510‑863‑1190 | http://www.sfbaysummit.com

Nice success story J. You've definitely been setting a great example in terms of maximizing efforts on multiple fronts and not holding back. 

I've been a bit overwhelmed lately with a rehab, an escrow, the 9-5 gig, a start up project, the kids/family... But your posts are firing me up to keep pushing forward to achieve more than I think is possible. 

As for your analysis, the trend data looks pretty compelling, but then I think you also really have to look at psychology/sociology for some answers too. RE investors are always preaching not to get emotionally involved, but I think the vast majority of regular folks do (myself included). Houses and buildings are different than stocks, they have character, they exist in communities... People get attached to them, people get excited and overbid, people do all sorts of irrational things, especially when markets get crazy. So I think the data can take you so far, but then you need to factor in human nature, and that gets tricky.

Back on the motivation front, I'm pulling out my old copy of GTD, organizing my projects and next steps, and looking for opportunities to turn things up a few more notches. Keep rockin it. 

Medium epp logo 1Orion Walker MBA, Eagle Peak Properties

J. Martin, Thank you for the analysis! I really enjoyed reading through it. It seems so unlikely that the prices can go up even more, but they do keep climbing up even more. I'm in Alameda and it's been a crazy upswing here in the last three years, fueled by limited space to build, inventory, tech money and all the other factors you mentioned.

Enjoyed the summit you organized last year and met lots of interesting people, thank you for putting that together!

Hope you make some more meetups in the Oakland areas as well.

Great summary, thank you for sharing!

Adrian Chu, Adrian Chu & Associates | Horizon Real Estate | [email protected] | 2064075452 | WA Agent # 107768, WA Lender # MLO-920749

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