What do you think ? post 1

Question

Hello everyone !

Not too long ago I watched a webinar featuring Brandon Turner...and man did I want to go out and buy some kind of real estate immediately, but the more I thought about it....the more it just didn't make sense! I mean.....I look around and see that home sales are up by like 20 % and that home prices continue to increase ( in LA ) and yet i hear about the ever increasing number of unemployed people and i just don't know what to make of it to be honest.  Either way one of the goals of the webinar was to finally just take action...and so I DID ! ...I contacted a real estate agent regarding a property in a city about 45 miles ? from where i currently reside...home prices are about 1/2 of where i currently live...and well the real estate agent told me that people are currently offering about 50k above asking price !!! my jaw dropped.  I went from excitement to disappointment in a heart beat.  Anyway my question to you is ...given the current financial climate....should I hold off on buying my first property ?

As a side note....I have decided to listen to all of the Biggerpockets podcasts ....since the beginning !!!   I keep wondering if Brandon Turner ever buy that pink limo ?  what happened to episode 21 ? anyway i will try to make this a weekly thing! be safe everyone !

Clarence Johnson · Answer

Account Closed buy a house hack multifamily, if it makes sense today it will make sense tomorrow.  Whenever values decrease, our rents will not (LA rule).  I have purchased a few properties, most recently my first SFR, and I had to look at it as a SFR with ADU and possible JADU to feel better about it.  Buying a nice home with picket fence that may be worth considerably less tomorrow can be a little scary even when your an agent/investor.  Buying a multifamily (or SFR with ADU) in a high demand rental area with near 0 vacancy where rents have almost doubled each decade since I have been paying attention (only the the last 2 lol) helps me sleep at night.

Jon Schwartz · Answer

Ismael! Excited to hear that you're jumping in!

Two things to keep in mind:

Firstly, we're in an unprecedented moment for the economy. It is pretty incredible that most housing markets are soaring while unemployment is over 10%. Who knows what will happen in the winter and 2020. Just know that this isn't usual!

Secondly, Socal is a really unique market. You'll hear about a lot of strategies on the Bigger Pockets podcast that just don't work here. This is a high appreciation, high rent market -- and you have to adjust your strategy.

I'm in investor in LA if you ever want to talk shop!

Best,

Jon

Mike Cumbie · Answer

Hi Account Closed

DISCLAIMER: I do not know the California market at all.

I can say however that in my market the "spring market" is nuts. Agents make 70% of their yearly income within about 3 months of when tax refunds come in. This year is of course different, but honestly, some people have made good cash and are moving toward buying a house. Great! Problem is that some sellers have decided to wait and not move yet. Makes a shortage of houses and prices soar.

In my market the BIG ups and downs are 10% (which is about 12K on a 120K house). I suppose in California that may make a difference of 50-80K on a 500-800K house. Knowing when to buy will not change. Knowing your market will not change. It is either knowledge or hiring someone with knowledge, Make sure the agent you choose has that knowledge.

Good Luck!

Account Closed · Answer

@Clarence Johnson

Thanks for the advice ! Definitely something I’m looking into

Account Closed · Answer

@Mike Cumbie

Thank you ! Yeah I completely understand that it’s really difficult to “time the market” in a sense but I would much rather buy when prices are near the bottom...when I heard that people were offering 50k over asking price it just reminded me of warren buffet and his advice on being fearful when people were greedy and being greedy when people were fearful ....although that line seems to be a bit blurred at the moment.

Account Closed · Answer

Thank You @Jon Schwartz,  I do understand how interesting of a market Los Angeles really is...I was really nervous about contacting the real estate agent to be honest...but it was such a great step ! I have made the decision to educate myself as much as possible.  I see that you are an investor....do you invest out of state ?  or here in socal ?

Jon Schwartz · Answer

Don't be afraid to call agents! They want your business.

I'm invested in a small portfolio of duplexes in Indiana, but outside of that, I'm entirely focused on LA County. I think the wealth-building potential here beats any out-of-state market. I'm not in need of side-hustle income at the moment, so I'm using real estate to build equity and net worth. Down the line, when I want to retire early, I'll convert that LA equity into more cashflowing assets in other markets. That's the plan.

What about you? What are you goals in getting into real estate?

Joe Villeneuve · Answer

Based on your question, I can only assume you are in the habit of taking "no" for an answer...before the question is even posed to you.  I assume this because the main question you did ask, was if it would be a waste of time to actually "ask that question".

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