Will we ever see another buyers market?

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Will we ever see another buyers market?

Vincent Crane
Realtor · Atlanta, GA · Member since 2015 · 693 posts · 357 votes

I haven't seen a single deal in the city of atlanta that cashflows, and I've looked at about 200. 

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y

@Vincent Crane  all properties cash flow when you pay cash..

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Mike Watkins  any specfics you can point to.

    I think with this post... were the OP says he can find a deal..

    Well one thing we have is the new reality.. .just like 2010 was a new reality.. IE new lows

    what your seeing now is a new crop of investors who only got in the game after the melt down and they compare everything to what happened in 2009 to 2011.. and if the deals are not that good they are NO good..   we all know RE cycles.. there are deals in every market.

    Buy and hold if that's what the OP wants to do which is the slow drip method unless you have a lot of capital... what's the difference if your making 250 a month positive or 150... its a whopping 1000 bucks a year.. how is that going to change your life.  one thing this new buy and hold mind set has to realize is unless you have the money to BUY a lot of units or can pay cash... there is no big wealth in these deals unless you have substantial appreciation.  not sure if my post is negative but I will stand by its truths..

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  • Drew Perkins
    Real Estate Agent · Louisville, KY · Member since 2015 · 33 posts · 24 votes
    10y

    I've had friends purchasing in Fulton and South Dekalb County for last 6 months getting 15-20% cap rates on turnkey properties.  

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  • Anna Watkins
    Investor · Atlanta, GA · Member since 2014 · 389 posts · 250 votes
    10y

    So Vincent, I've been hearing your frustration.  You want to buy a multi-unit (to house hack?), but they're hard to find in a neighborhood you want to live in.  If you find one, it doesn't make a ton of money the way they're "supposed to" according to BP wisdom.  

    That may be exactly the way it is right now.  I know people who have bought duplexes and triplexes lately -- your competitors -- and are thrilled to bits, but they're not investors looking at their houses with investor eyes.  They're homebuyers who think it's awesome that the additional units are paying the mortgage, or even some of the mortgage.   And so they're the ones with the houses.

    Househacking doesn't have to be a multi.  Buy a house big enough for you and roommates, get some equity and appreciation and sell in a few years.  Or, a house with potential to put in a basement unit, and/or an attic unit -- ie a DIY multi-unit!!  Or just stop fussing and buy two single family rentals and just get going.   Just because your goal is to have enough cash flow from multi-units to travel the world, doesn't mean you absolutely have to start that way.  What's that saying?  Better two SFRs in the hand than a multi-unit in the bush??

    Additional BP wisdom says the definition of a "deal" changes with the individual investor, location, the market, and the economic times.   Sounds like time to execute Plan B (and keep your eyes and options open for Plan A to become available about 3 weeks later!)

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  • Lorin K.
    Tacoma, WA · Member since 2015 · 141 posts · 29 votes
    10y
    Originally posted by @Joel Owens:

    I don't buy overpriced trash.

    Wait until they lose their shirt and then swoop in and buy them for a song. Some even when buying incorrectly will be able to handle the next down cycle and wait it out.

    It's the buyers who overpaid and can't hang on where you scoop up deals. We call them "vulture buyers" in the business. 

     you mean like in Vancouver BC Canada? BTW these prices are old and have gone up  higher then what is in this site. www.crackshackormansion.com

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  • Wilson Churchill
    Madison Heights, MI · Member since 2014 · 472 posts · 132 votes
    10y

    Yes. Market cycles are built into current monetary policy. If they end fractional reserve banking and standardize lending, we would see much more stability in prices.

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  • Mark Ferguson
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    10y
    Originally posted by @Account Closed:

    Similar to the stock market, there is no way to predict the answer to your question with sufficient confidence to make a market timing decision. And even if someone could make an actionable prediction, you would not be able to sift through the other, incorrect predictions and pick out the person with a crystal ball. It sounds like you are just looking for people to confirm your own view that the Atlanta market is over priced. 

    Sure, cap rates in the desirable in-town neighborhoods for MLS-listed properties trade for sub 5% cap rates. You get what you pay for. Those properties will rent quickly to quality tenants and typically sell quickly at close to market price. You give up potential return for convenience and liquidity. If you want an 8-12% cap in a reasonable school district, you're going to be in the suburbs.

    If you want a guess about future prices in Atlanta, appreciation will flatten but a significant dip is unlikely. Interest rates will remain low (on a historical basis) for the next few years. Multi-family real estate is a popular asset right now. Everyone is waiting for a dip to buy more. The homeownership rate has significantly declined and that is unlikely to quickly reverse in the next few years. Fortune 500 companies continue to move to Atlanta and jobs are plentiful. Don't hold your breath for a bust.

     Yup, I think investors wanted the easy money of five years ago. It takes work to get deals now. I don't think it will ever be like it was back then. Ups and downs yes, but not as bad as it was. 

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  • Jenet Christiansen
    Saint Petersburg, FL · Member since 2015 · 10 posts · 4 votes
    10y

    As someone who is just starting out I agree with you that there are no "deals" with high return just sitting waiting to be scooped up. So many investors have moved into our "hot areas" that the minute anything becomes available, they swoop in. I am not knowledgeable at all but I am perusing the listings, auctions, foreclosures and compared to five years ago for sure the inventory is sparse. Everything I am seeing is priced so high already I would break even after the rehab. I am going to continue to look, I see the suggestions made here, and after I study deal analysis a bit more, I will probably try some of those. I have to say that there are an incredible amount of people in this general area looking for the same things I am, with the connections, experience and knowledge that I do not yet have. I am not going to give up though...

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Jenet Christiansen  well then if what your saying  is true we will go back to the 70s 80s and 90s were if you wanted to be in real estate and make money with limited funds you became an agent.. the honeymoon period is over.

    and most the folks that think they are going to get on BP and find deals an do RE are just dreaming.. @Mike Watkins  is that negative enough for you.. but its the truth as markets firm only the strong survive and BP follwers are anything but the strong the majority are just beginners with 90% failure rate or more.

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  • Steven Gesis
    Investor · Miami, FL · Member since 2015 · 1k+ posts · 390 votes
    10y
    Originally posted by @Vincent Crane:

    I haven't seen a single deal in the city of atlanta that cashflows, and I've looked at about 200. 

     Vincent, excellent question, I think you have to consider the depth and associate the relative nature of the performance you are seeking to return, to really drill down the answer. In one sense you can say it is always a buyers market, if you know what you are looking for and have a sophisticated or logical approach to investing you can always find something. Now,  the aforementioned has some reservations specifically pertaining to the volume or capacity, in essence you can always find something, however the abundance of inventory will vary. Finally, depending on your return strategy and risk spread, different markets is something you may want to consider, for example you may want to spread your eggs beyond your immediate territory to enhance your buyers market experience, I know I may open up a bag of worms with my next statement, but consider turnkey operators in different market to help enhance your buyers market experience. You can deal with existent operations, spread yourself among bullish and conservative stable markets with little operational hands on need, make money remotely outside your immediate area. Just some food for thought, I want to leave it with the idea that its always a buyers market, you have to adjust with the market, you have to have an action plan and adhere to that plan, you can make any market Believe a buyers market as it relates to investing in RE, not purchasing owner occupant, this is another discussion.

    Happy Investing! 

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    10y

    Wow Lorin those properties for that money is crazy. For 2 million here in GA you can get in the suburbs and absolute palace. I am talking 15,000 sq ft house brand new.

    Those properties in the pics sold in the hood of Atlanta during the last downturn for 5 to 10,000. Today people are paying stupid prices like 70k or something.

    Never have been a big fan of downtown Atlanta. I have lived in GA all of my life. Just have always enjoyed the burbs. 

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  • Federico Gutierrez
    Realtor · Cleveland, OH · Member since 2015 · 2k+ posts · 857 votes
    10y
    Originally posted by @Michaela G.:

    I have recently bought (2) duplexes for 15K each, in the city of Atlanta. 1 needs about 15-20K, the other about 25K. Rents should be about $ 750 each side. 

    So, I do think there are deals in Atlanta . And I'm buying from California

     Can you discuss how you found these deals? Not sure of the atlanta market but thats just to cheap for any market
    What kind of neighborhood are they in? 

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  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    10y
    Originally posted by @Jay Hinrichs:

    @Mike Watkins  any specfics you can point to.

    I think with this post... were the OP says he can find a deal..

    Well one thing we have is the new reality.. .just like 2010 was a new reality.. IE new lows

    what your seeing now is a new crop of investors who only got in the game after the melt down and they compare everything to what happened in 2009 to 2011.. and if the deals are not that good they are NO good..   we all know RE cycles.. there are deals in every market.

    Buy and hold if that's what the OP wants to do which is the slow drip method unless you have a lot of capital... what's the difference if your making 250 a month positive or 150... its a whopping 1000 bucks a year.. how is that going to change your life.  one thing this new buy and hold mind set has to realize is unless you have the money to BUY a lot of units or can pay cash... there is no big wealth in these deals unless you have substantial appreciation.  not sure if my post is negative but I will stand by its truths..

     Amen.

    $250/mo vs $150/mo is chasing pennies and missing dollars.

    Principle paydown, tax advantages, diversification of wealth. These are the real reasons to buy rental real estate. Worrying about the difference in a nominal amount of money doesn't make sense, you can easily blow that $1,000 on a night on the town with your wife.

    For me the first thing I am looking for when I buy a property is "How many people are going to see my sign on this building"

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  • Jim Sestito
    Investor · Cambridge, MA · Member since 2013 · 264 posts · 104 votes
    10y

    @Account Closed idk I saw a movie over the holidays that think some people can predict it!

    https://www.youtube.com/watch?v=3hG4X5iTK8M

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  • Alan Morrison
    Grand Blanc, MI · Member since 2015 · 24 posts · 13 votes
    10y
    Originally posted by @Jay Hinrichs:

    @Vincent Crane  all properties cash flow when you pay cash..

     That was the most Dave Ramsey-esque thing I've seen on this forum. Kinda refreshing!

    2Reply
  • Mike Watkins
    Wholesaler · Powder Springs, GA · Member since 2013 · 516 posts · 143 votes
    10y

    It's hard for me to understand why some one would think they can't find deals. Or it's a sellers market. 

    It's like going to heaven and seeing God and seeing all of his kingdom. Them coming back down to earth and talking to people who don't believe. How? I met him! He took me back and I saw him make the world. Are you crazy?

    I can't begin to fathom how negative it is. Because I'm stuck in possible world. How do I even get to negative land?

    Some one said, "If they can make penicillin from moldy bread, you can do it". 

    If Vageta can go super sayan. Then you can do it. 

    If a woman can be raped. Then her daughter also be raped. And then that little girl can grow up the most successful and wealthiest woman on the planet, then you can do it. 

    If "I" can flip a house almost halfway around the planet, in a place I've never been, with other people's money, and sell it to a person I've never seen, then you can do it. 

    You can tell me all day that it's a sellers market, but I'll still be right here doing deals with out you. 

    If you can't do it, then You can't. Give up on REI and apply at Starbucks, because some one's got to make my coffee.

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  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    10y
    Originally posted by @Federico Gutierrez:
    Originally posted by @Michaela G.:

    I have recently bought (2) duplexes for 15K each, in the city of Atlanta. 1 needs about 15-20K, the other about 25K. Rents should be about $ 750 each side. 

    So, I do think there are deals in Atlanta . And I'm buying from California

     Can you discuss how you found these deals? Not sure of the atlanta market but thats just to cheap for any market
    What kind of neighborhood are they in? 

     Yes, it's a D neighborhood. But I don't want to hijack this thread about my deals. 

    My point was that saying that there aren't any deals in Atlanta is way too broad and fatalistic a statement. Maybe he can't find deals in the exact criteria he wants, in the way he wants to make his offers? Then he should re-consider his criteria and maybe ways he goes about it.

    For example, one of my duplexes was listed at 30K, I ended up getting it for 15K, with 15K earnest money. Do you think someone offering 15K with $ 100 earnest money would have gotten that deal? Probably not. Sometimes it's not the basic numbers, but the way an offer is structured, that shows that a buyer is serious. 

    I don't suggest to him or anyone to go out and buy in warzones. That is a personal choice and not everyone is willing to do the tradeoffs. But what I am saying is that if something is not working for him, then he needs to change something, whether it's the various criteria or the way he goes about it. 

    As they say 'to the man that has only a hammer, everything looks like a nail'

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  • Richard Dunlop
    Investor · Detroit, MI · Member since 2014 · 755 posts · 462 votes
    10y
    Originally posted by @Mike Watkins:

    I'm not sure where you guys are looking but I'm finding deals all over. I even got a house for a $1. I don't buy unless it's at least a 10cap. 

     I think I'd want a better than 10 cap rate if i was buying for $1

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Michaela G.  did I teach you the EM trick  :)  works every time. your offer up against all these folks who are so timid to put up any kind of real EM its joke.

    but your probably west coast centric and understand how to do things

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Vincent Crane  you may want to look at small multi family those usually hit your numbers easier and your competition is all numbers driven... Atlanta is a big place.. there are millions of developed properties I am sure you could find one... Have you gone to the first Tuesday of the month Auctions and watched the action.... I did that for a year and bought 54 properties in Henry county ... and I live in Oregon.. so I know it can be done.

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  • Mike Watkins
    Wholesaler · Powder Springs, GA · Member since 2013 · 516 posts · 143 votes
    10y
    Originally posted by @Richard Dunlop:
    Originally posted by @Mike Watkins:

    I'm not sure where you guys are looking but I'm finding deals all over. I even got a house for a $1. I don't buy unless it's at least a 10cap. 

     I think I'd want a better than 10 cap rate if i was buying for $1

     At least. It was a 5027% cap rate. 

    1Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    10y
    Originally posted by @Jay Hinrichs:

    @Michaela G.  did I teach you the EM trick  :)  works every time. your offer up against all these folks who are so timid to put up any kind of real EM its joke.

    but your probably west coast centric and understand how to do things

     I don't think I have that from anyone (wouldn't call myself west coast centric, as I'm new here and don't do real estate here). But I also lived in CA when the market crashed and I had previously farmed this area and wholesaled vacant lots to builders, who were snapping up anything they could find, so, I knew every street from when I lived there. 

    And when I saw the properties in the area being offered for 10k, I figured why not offer everything, since I was serious about buying. Those were small numbers and I put no contingencies on them. as is , where is. It worked ;-)

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  • Charvick White
    Investor · Tallahassee, FL · Member since 2015 · 15 posts · 8 votes
    10y

    2007 wasn't the first turn in the market and it will not be the last you just need to pivot with the market and adjust your strategy. Like many others have stated I would widen my criteria if I'm unable to find the ROI currently. But deals are away there its just are you willing to take it.

    0Reply
  • David Krulac
    Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    10y

    @Vincent Crane

    Depends where you look.  In my area there are lots of buyer's markets.  In one market the sale prices are the same as they were 25 years ago.  Others are 2004 prices and some are 2006/2007 prices.  Very few areas around here do prices exceed peak prices of 2008.

    Of course there are strong markets like yours all over the country, HOWEVER, the national figures are still down.  Homeownership has declined, wages are stagnant, and only 91million out of 325 million in the country have jobs.  Jobs drives the economy. 

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  • David HollandPro Member
    Realtor · Baltimore, MD · Member since 2013 · 91 posts · 32 votes
    10y

    After watching "The Big Short" last night, I think there a very good chance of another buyers market sooner than later. 

    I haven't read through all the replies yet, but here a few ideas. Attend a few REIAs and network like crazy. Check Craigslist and setup a "If This, Then That" alerts. Attend landlord court, call gosection8 and ask if they want to sell, and maybe even look to different market if you truly cannot find deals in your area. Baltimore has great cash flow (I just bought my 3rd one)

    Good luck in 2016! 

    1Reply
  • Josh Norris
    Investor · Seattle, WA · Member since 2013 · 77 posts · 9 votes
    10y

    @Vincent Crane I by no means have the experience that some of these guys on your thread do but what I can say from being in a very expensive and low inventory market, Seattle, the MLS is very picked through and . It may be time to look at doing some marketing on your own (mail, door knock, signage, phone calls etc.). When reading the threads and seeing that everyone with a pulse is now an investor it may look like it's not possible but it really is. The majority of people doing marketing stop after the 2nd or 3rd attempt, I know because I get the mailings. I have been doing my own marketing for a couple years now and while I am not a big investor I focus on getting one great deal a year and a few smaller ones. I just closed on a house in one of the most expensive areas in King county, I was able to purchase it for 290k with a current value of 450k. I put very little down and was able to have them carry a note for a short time while I refinanced. It is a mess and needs some work but is in a class A neighborhood and is livable as is. My point of all this is persistence and drive will pay off. Focus on home owners that need to sell now, they exist regardless of what the market is doing. Good luck man you will find something, just don't give up

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