the worm has turned

36 Replies

now that the honey moon period is over  IE post GFC  08 to 2011 melt down and RE has start to balance out.. back to what was in my day a normal market  IE deals had to be gotten not just plucked off the trees

what are you doing to adjust to the new times... Its not going to get any easier ... Sub prime foreclosures are gone... Liar loans have basically been flushed through.

It seems like only the strong will survive...

Any thoughts ?

No more easy money easy deal. Stick with fundamental. Let the power of compound rate of return do its work. Hold for long till the next bubble and bust.

I would add to your last comment The Strong and Knowledgeable will survive . 

I have always been a Goals Orientated type guy :

Last year have you met your realistic goal so far for this year ?

Are you on track for 1year ,2years , 3 years out ? If Not Why ?

Is your business Operating as you want it to be ? Or constantly changing on the Fly ?

@Jay Hinrichs

When you think about it most of the existing housing was designed to be lived in and not necessarily designed as an investment like commercial properties or land developement are. The serious deal seekers and commercial players are nomally the ones that actually make a full time living/profession in this field. Typically the rest will get their asses handed to them over time. The ones who have played in the right locations will be some of the exceptions. It is unlikely a newbie now buying a far flung turnkey for example will come out better off than a simple index fund average. The real pros like yourself and this Bp gentleman below are the kind of folks we need to pay attention to make it now.

@Matt R.

  when I look back one of my best years in buying foreclosures was 2004.. now I attribute that to the fact that the internet had not fully taken off Regarding RE.. so you still needed to have those particular set of skills that I learned from the 1970's on...

now with the interenet its flooded the market with investors who here to fore would have never competed with me as it would have been to tough and complicated.

Even BP is  perfect example of free on  line training.. for better or worse depending on your perspective.

@Jay Hinrichs  I figure we will just have to roll with the punches.   It's survival of the fittest...Right?  IMO the market in western NC crashed and still hasn't recovered.  This area is lower-middle class and the job growth and economy doesn't fluctuate quite like bigger markets.  From a RE standpoint WNC relies so heavily on FL and ATL residents as secondary home owners to drive the market.  They aren't buying near what they were. For example, don't quote me exactly on this but, in 2014 my parents county (clay) sold 28 vacant lots with 450 on the market.  Haha it's very rural it has 2 stop lights and just got its first McDonalds 3 yrs ago.  

There are definitely re investors here but none appear to be extremely active.  For me I will continue to look for deals, try to keep learning all I can and adapt to the changes.  As for the fundamentals they don't seem to change much in this area.  

@Jay Hinrichs No doubt BP can help folks cut through the BS. I picked up a foreclosure as a result of getting informed on bp. It also can add to the BS sometimes, but for the most part BP and your site are awesome is my newbie perspective. 

It's definitely not easy to find cheap properties just laying around like pennies on the ground anymore.  Plus there's been so many California investors buying up stuff in Milwaukee that it's harder and harder to find killer deals anymore.

@Dawn Anastasi

  one of the unintended consequences for those posting on public forums about how great their market is.. you have the CA investment horde focused on a certain market.. remember there is almost 50 million people in CA and they are RE crazy... and see the mid west as the promised land with cheap properties.. 

Originally posted by @Jay Hinrichs :

@Dawn Anastasi

  one of the unintended consequences for those posting on public forums about how great their market is.. you have the CA investment horde focused on a certain market.. remember there is almost 50 million people in CA and they are RE crazy... and see the mid west as the promised land with cheap properties.. 

Well luckily for me I got in at a good time and snapped up some nice properties back in 2011-2013.  At the most I would buy only 3 more and I think I can get those in the next couple of years.  We will see!

Originally posted by @Dawn Anastasi :

It's definitely not easy to find cheap properties just laying around like pennies on the ground anymore.  Plus there's been so many California investors buying up stuff in Milwaukee that it's harder and harder to find killer deals anymore.

 Dawn, I remember reading articles pre internet how the locals in Seattle were freaking out because Californians were buying and jacking up the prices overnight, then Denver etc... Fast forward 3 decades samething and it happens faster now I imagine. At one point 20% of Californians were involved in real estate on some level. Now the big cities have their own momentum going but CA investors still can create new demand wherever they invest in mass. There is just not enough inventory in Cali to keep them home still.

If you are holding property in a seller's market it may be time to sell.

Historically low interest rates & one's view of interest rates going forward must be considered in anyone's investment decision making.  What are your other yielding asset alternatives - a 10-year bond which pays you 2% (and is a negative yield after inflation)?

In a world of negative "real interest rates"  investors flock to "hard assets", of which, real estate is a large part.  

I would much rather own a piece of cash flowing real estate than say the following type of asset which relies totally on the next buyer (sucker?) paying more ...

Picasso Painting Sells for Record $179 Million (Reuters, May 12, 2015)

Originally posted by @Jay Hinrichs :

now that the honey moon period is over  IE post GFC  08 to 2011 melt down and RE has start to balance out.. back to what was in my day a normal market  IE deals had to be gotten not just plucked off the trees

what are you doing to adjust to the new times... Its not going to get any easier ... Sub prime foreclosures are gone... Liar loans have basically been flushed through.

It seems like only the strong will survive...

Any thoughts ?

 We're concentrating on old landlords more. There is plenty of housing stock to be turned over, especially underperforming stuff, and plenty of old landlords that was want rid of neglected stock.

Originally posted by @Jeff Rabinowitz :

If you are holding property in a seller's market it may be time to sell.

 I think I'll save selling for when I no longer want to be a landlord.

Originally posted by @Dawn Anastasi :

It's definitely not easy to find cheap properties just laying around like pennies on the ground anymore.  Plus there's been so many California investors buying up stuff in Milwaukee that it's harder and harder to find killer deals anymore.

 Does anyone other than me think Dawn's success may have had something to do with that?

@Mark Shaffar

  Dawns sharing her success for sure then her partner in CA doing a  POD cast and the next thing you know you spawned a new Turn key market there in Milwaukee.. so its good for the city ,,, contractors and others.. just puts pressure were very little existed with the local investors before it became popular.  I have been funding TK since 2001 and the first I heard of any serious interest in Milwaukee was last year when I joined BP

I do find it much harder to find deals like 3-4 years back. Perhaps this is the new norm. I haven't been in real estate long enough to know what is the norm. 

People seem amazed when I tell them I passed up a deal, just because I think its not good enough. But what is good enough is really subjective. If I could find deals like 3 years back, I'd go crazy buying up all I could. I do wonder at times whether I need to loosen up my criteria a bit at pick up whats still available out there. 

@Gaurav M.

  yes its subjective If I think back on what where some of my best buys 3 and 4 years ago.

1. buying homes in ft. Meyers at auction for 20 to 30k each that were less than 10 years old and had sold north of 200k...

2. buying Atlanta metro homes from 30 to 45k  that were selling pre crash for 120 to 150k

3. a few land plays here in Oregon,,,

Missed opps

1. Buying every lot I could get my hands on in Atlanta.. there were thousands that could be bough for 1k each

2. buying lots in Central CA for 4 to 10k each.

New norm who knows but RE does cycle.. one thing I am fairly confident of is there will not be a huge crash like 08 to 2011... circumstances are not the same. .. Slow downs  for sure. and in some markets that are heavy to rentals you will always get deals from the burnt out landlord... I just funded 3 today that the company paid 50% less than a landlord paid for them 4 years ago... and that's just an example there is a plethoria of that inventory and there always will be.

Originally posted by @Jay Hinrichs :

@Mark Shaffar

  Dawns sharing her success for sure then her partner in CA doing a  POD cast and the next thing you know you spawned a new Turn key market there in Milwaukee.. so its good for the city ,,, contractors and others.. just puts pressure were very little existed with the local investors before it became popular.  I have been funding TK since 2001 and the first I heard of any serious interest in Milwaukee was last year when I joined BP

Ha ha ... funny to think of Mehran and I spurring the housing economy of an entire city all by ourselves ...  :)

Originally posted by @Jay Hinrichs :

@Gaurav Mohile

  yes its subjective If I think back on what where some of my best buys 3 and 4 years ago.

1. buying homes in ft. Meyers at auction for 20 to 30k each that were less than 10 years old and had sold north of 200k...

2. buying Atlanta metro homes from 30 to 45k  that were selling pre crash for 120 to 150k

3. a few land plays here in Oregon,,,

Missed opps

1. Buying every lot I could get my hands on in Atlanta.. there were thousands that could be bough for 1k each

2. buying lots in Central CA for 4 to 10k each.

New norm who knows but RE does cycle.. one thing I am fairly confident of is there will not be a huge crash like 08 to 2011... circumstances are not the same. .. Slow downs  for sure. and in some markets that are heavy to rentals you will always get deals from the burnt out landlord... I just funded 3 today that the company paid 50% less than a landlord paid for them 4 years ago... and that's just an example there is a plethoria of that inventory and there always will be.

 I agree that there wont be  huge crash like 08 to 11 for a long time. Like you said it'll probably go sideways for a while, except for maybe SoCal and Bay area. 

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