Avoiding Bias. How do other investors do it?
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Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
4y@Allen L.
Just because you expected the appraisal to be higher, has nothing to do with the skin color of your tenants. Maybe you just thought your house was worth more than It is.
106 Replies
- Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes4y
@Marcus Auerbach Thanks for weighing in on this topic.
- Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes4y
@Mala S. We appreciate your rich and informative input on this topic. My wife and I smarter for it as some of your experiences help make us more keenly aware of various biases we had not fully considered. And, most importantly for us, we can take away from your feedback how we can take actionable steps to recognize those biases and work around, through and over them to our investment advantage. Bravo and best wishes to you, particularly as a fellow NJ investor!
- 4yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Steve K.:
I'll be curious to follow this and I wish we could review the appraisals themselves. Based on the few facts we have from the media (which who knows how accurate the reporting is in this "post-truth" era), it does seem pretty egregious: property appraises for $995k when the black owners meet the appraiser, then $1.48M when a white guy meets them... I mean we've all seen whacky appraisals but ~$500k off would make me question things for sure. One of the articles I read mentions the first appraiser pulled comps from predominantly black neighborhoods when the property is in Marin which is 85% white. I wonder where she pulled comps from? The Canal area of San Rafael? That's the least expensive part of Marin but also mostly hispanic. I can't think of any predominantly black neighborhoods in or even near Marin unless she went really far away/ over the bridge. So something's definitely fishy. It's hard to really say what's going on without knowing the market better and comparing the appraisals. @Ron Brady thanks for bringing this up and I'm really impressed with your candor considering some of these comments. Non-minority people really can't relate to this kind of thing, we're privileged by not having to think about whether or not race is a factor when we get a low appraisal.
I did not read the article but if this is Marin County then its really easy to check the comps to make sure they are within the same area. There is only one little area of Marin County I know that is/was predominantly black can't recall the name now been some years.. but they sure as heck would not go over the Richmond bridge LOL.. or to San Quentin. I fall back on this particular case I dont think we are getting all the facts..
- Member since 2020 · 983 posts · 1k+ votes4y
Originally posted by @Ron Brady:
A CA couple is suing an appraiser for what they assert is a lowball appraisal: https://www.washingtonpost.com... For a second appraisal, they removed all hints that a black couple lived in the home and they asked a white friend to meet the appraiser.
We do this! My wife is very fair skinned. Me, not so. When we get our properties appraised, hold open houses for potential tenants in our rentals or market our rentals online, my wife is always our front person. I make sure I am nowhere to be seen because of my darker skin. While we know that MOST people are not racist, because we seek to secure top value for our properties--we also realize that SOME people are. If a potential tenant will pay top dollar or an appraiser will value our house differently if they don't realize that we are black, then we have no issue renting to or getting an appraisal from someone who has a racial bias. If they do not know we are black, they cannot use their bias against us.
I'm curious if any other investors here engage in similar posturing to get around the potential biases of some appraisers, renters, partners, banks, etc?
It is sad that you think the color of your skin affects anything in your life because if you feel that your color affects things then it will. I've been in the plumbing, heating and construction business more than 50 years, about 50% of my customers are black and I don't see one bit of difference between doing business with black people than with any other ethnic group. Stop thinking the way you are, stand tall and make people treat you and respect you for what you are. Stand next to your wife, support her and let people know the only difference is the color of your skin.
If an appraiser did treat you different then sue the crap out of him and destroy his life. It is time for this world to stop seeing the color black, brown, or whatever a person is and I wish the word 'black' could be removed from every language and dictionary.
- Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes4y
@Jay Hinrichs yeah one of the articles I read stated the first appraiser only pulled comps from black neighborhoods and it sounded like she did that just because she knew the owners are black. With the property being in Marin I thought to myself “What black neighborhoods?” Marin is one of the whitest places I can think of. There’s the Canal which has minorities but mostly Hispanic. Anyway it made me want to dig deeper. I wonder where the property is, and where the comps are. If she really did intentionally only use comps from predominantly black neighborhoods like the article states, then it seems like an open and closed case, definitely prejudice. Again non-minority people don’t even realize this could be an issue because we’re not personally effected by it. We don’t have to worry about getting shot randomly when jogging because of our skin color, or during a routine traffic stop, a black kid playing with a toy gun, etc. or having our property appraisal be off, qualifying for a loan, getting a job, making a sale, etc. Our skin color being a potential factor is not something we even have to think about so it’s great that Ron brought this up otherwise many of us wouldn’t even realize that minorities have this mindset (for good reason). The closest thing I’ve experienced was when I was with a minority partner. She would notice people treating us differently in public as a mixed race couple and I wouldn’t even notice. But when she called it to my attention she was absolutely right. It was something she had always dealt with and was clued into but I had never even thought about. That’s privilege.
- Raleigh, NC · Member since 2014 · 125 posts · 37 votes4y
State law dictates procedures. As an appraiser I welcome ANY review appraisal.
- Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes4y
I'm sorry, but that is such a bulls**t article. They tweaked the data for "fundamental factors that contribute to a home’s value, such as size, condition, neighborhood amenities and schools". First off, anyone who has ever taken a statistics class knows how easily you can get the answer you want by cherry picking and assigning weights to select data. Secondly, they failed to mention one big factor that contributes to the price. DEMAND. There is significantly more demand from people who want to live in a so-called "white areas" than people who want to live in "black areas".
If black areas really are so dramatically undervalued like this article makes the claim, why aren't investment firms buying up thousands of homes in these areas and just waiting for prices to increase?
The saddest thing about journalism today is that the outcome is chosen and the facts are selected to support the outcome regardless of whether it is accurate or not. I could easily use the same numbers and instead of claiming that blacks are deprived of wealth creation because of lower home values, I could spin it positively and claim that it is wonderful that blacks are closer to homeownership than whites thanks to the lower entry costs. It's all how you want to spin it.
- Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes4y
@Account Closed We appreciate your weighing in and sharing your perspective.
On this point "if you feel that your color affects things then it will", please know that notwithstanding ourlife-long best efforts to not let our skin color affect our lives, it has. We´ve thus tried to recognize that if others are going to use it to judge us and we can make money from them by not allowing their bias to get in the way of our business, we do that. Not the strategy for everyone, we know, but it is the one that works best for us.
Best wishes in your investing!
- Chicago, IL · Member since 2017 · 138 posts · 62 votes4y@Greg M,
Originally posted by @Greg M.:
I'm sorry, but that is such a bulls**t article. They tweaked the data for "fundamental factors that contribute to a home’s value, such as size, condition, neighborhood amenities and schools". First off, anyone who has ever taken a statistics class knows how easily you can get the answer you want by cherry picking and assigning weights to select data. Secondly, they failed to mention one big factor that contributes to the price. DEMAND. There is significantly more demand from people who want to live in a so-called "white areas" than people who want to live in "black areas".
If black areas really are so dramatically undervalued like this article makes the claim, why aren't investment firms buying up thousands of homes in these areas and just waiting for prices to increase?
The saddest thing about journalism today is that the outcome is chosen and the facts are selected to support the outcome regardless of whether it is accurate or not. I could easily use the same numbers and instead of claiming that blacks are deprived of wealth creation because of lower home values, I could spin it positively and claim that it is wonderful that blacks are closer to homeownership than whites thanks to the lower entry costs. It's all how you want to spin it.
I get it, you already made up your mind and nothing can open your mind to the outside world. People are crying for help and all you can do is gaslight them. - Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes4y
@Greg M. Glad to see this topic has you so engaged!
As we shared in our earlier comment, there is a substantial body of work--from think tanks, academics, non-profits and journalists--that speaks to this matter. It is not just the two articles we´ve cited nor the multiple articles cited by @Jay Thomas. If you would like more to read, we´d be happy to share more of the citations--just let us know.
- Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes4y
Originally posted by @Jay Thomas:
@Greg M,Originally posted by @Greg M.:
I'm sorry, but that is such a bulls**t article. They tweaked the data for "fundamental factors that contribute to a home’s value, such as size, condition, neighborhood amenities and schools". First off, anyone who has ever taken a statistics class knows how easily you can get the answer you want by cherry picking and assigning weights to select data. Secondly, they failed to mention one big factor that contributes to the price. DEMAND. There is significantly more demand from people who want to live in a so-called "white areas" than people who want to live in "black areas".
If black areas really are so dramatically undervalued like this article makes the claim, why aren't investment firms buying up thousands of homes in these areas and just waiting for prices to increase?
The saddest thing about journalism today is that the outcome is chosen and the facts are selected to support the outcome regardless of whether it is accurate or not. I could easily use the same numbers and instead of claiming that blacks are deprived of wealth creation because of lower home values, I could spin it positively and claim that it is wonderful that blacks are closer to homeownership than whites thanks to the lower entry costs. It's all how you want to spin it.
I get it, you already made up your mind and nothing can open your mind to the outside world. People are crying for help and all you can do is gaslight them.No Jay, I expect people to analyze things from multiple objective perspectives and come up with a conclusion based on facts, not emotions or hopes, not like you who has made up their mind and refuses to accept other possibilities.
This article cherry picked data elements and weighted them and then left out the data element that has the biggest overall affect on price.
Explain this, a house is listed for sale and sells for X. Someone somewhere claims that this was $48,000 undervalued. Then why didn't the market force up the selling price to the correct level? Are you going to pretend that there is an inefficient market regarding house sales in black areas?
The fact that the "same house" in a black area sells for less than in a white area is because there is less demand for it. A snow cone sells for less in Alaska than in Texas because there is less demand for it. I'd say that is an efficient market. You'd say that snow cones are racist.
- Chicago, IL · Member since 2017 · 138 posts · 62 votes4y
Originally posted by @Greg M.:
Originally posted by @Jay Thomas:
@Greg M,Originally posted by @Greg M.:
I'm sorry, but that is such a bulls**t article. They tweaked the data for "fundamental factors that contribute to a home’s value, such as size, condition, neighborhood amenities and schools". First off, anyone who has ever taken a statistics class knows how easily you can get the answer you want by cherry picking and assigning weights to select data. Secondly, they failed to mention one big factor that contributes to the price. DEMAND. There is significantly more demand from people who want to live in a so-called "white areas" than people who want to live in "black areas".
If black areas really are so dramatically undervalued like this article makes the claim, why aren't investment firms buying up thousands of homes in these areas and just waiting for prices to increase?
The saddest thing about journalism today is that the outcome is chosen and the facts are selected to support the outcome regardless of whether it is accurate or not. I could easily use the same numbers and instead of claiming that blacks are deprived of wealth creation because of lower home values, I could spin it positively and claim that it is wonderful that blacks are closer to homeownership than whites thanks to the lower entry costs. It's all how you want to spin it.
I get it, you already made up your mind and nothing can open your mind to the outside world. People are crying for help and all you can do is gaslight them.No Jay, I expect people to analyze things from multiple objective perspectives and come up with a conclusion based on facts, not emotions or hopes, not like you who has made up their mind and refuses to accept other possibilities.
This article cherry picked data elements and weighted them and then left out the data element that has the biggest overall affect on price.
Explain this, a house is listed for sale and sells for X. Someone somewhere claims that this was $48,000 undervalued. Then why didn't the market force up the selling price to the correct level? Are you going to pretend that there is an inefficient market regarding house sales in black areas?
The fact that the "same house" in a black area sells for less than in a white area is because there is less demand for it. A snow cone sells for less in Alaska than in Texas because there is less demand for it. I'd say that is an efficient market You'd say that snow cones are racist.
@Greg M,
Why do houses (owned by black people) jump in value when a white person pretends to be the owner? There have been multiple cases of this reported. You can do the research yourself.
Also while doing your research, I will like you to look into the areas you called "black areas". When these areas were created, were they allowed in the place you called "white areas".
- Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes4y
Originally posted by @Jay Thomas:
They don't. If they actually jumped in value, then you would have white people being hired by blacks to pretend to be the owner when selling the homes. What you have is a few cases where the appraisal done by a different person was higher when a white person pretended to be the owner. This is an estimate of value, not actual value, and it is extremely subjective. Additionally, there is no proof of the difference being due to racism.
Maybe one appraiser liked the view more than the other one? Maybe one added value for the new foundation and retaining wall that was done, while the other felt it added zero value? Maybe one used a comp that had an outdoor kitchen and the other one didn't? Maybe one used old comps and the other used freshly closed comps? Maybe one saw the driveway with a car parked in it covering the major cracks and the other didn't?
Between sales and refis there are probably 10+ million appraisals each year. There are awesome appraisers and lousy appraisers. Appraisal is an art, not a science. There are going to be outliners. That doesn't mean they're racist. I know you got your pitchfork sharpened and your torch lit, but perhaps you should wait for proof before condemning a person as racist. One day the accused might just be you!
- Member since 2020 · 983 posts · 1k+ votes4y
I'm having a difficult time comprehending what people are trying to get across.
I would love to hear the appraisers' sides to all the stories regarding their reasoning for the appraised values and it could be that the the appraisers were being totally honest and and are not racist. Or...maybe some people getting appraisals purposely set the stage so the appraisals come in low just so they can sue to earn some easy cash.
I'm as white as a snowball (not really. I'm of Italian decent.) and I've had several appraisals where I was angry with the appraisers. I purchased a modular home in Sandy Valley Nevada for $120,000 at an auction. The person who lost the home to foreclosure paid $550,000 for the house and 5 acres. I spent 2 years remodeling the house, spent $420,000 doing the remodel and decided to sell the home. You can find old posts backing up this story. The appraisal was $150,000. I called another appraiser and the appraisal was for $300,000. My point??? Did I think for one minute that the first appraisal was due to some bias?
I got an appraisal several years ago for my office building when I was getting divorced. For some strange reason (nothing to do with my skin) the appraisal came out at $250,000. I purchased the property about two years earlier for $325,000 and it was currently worth more than $600,000, but I didn't get another appraisal because the lower the value the better for myself when presenting my assets to the judge. The appraisal was really strange because it mentioned many personal things about myself that were not true e.g. the appraiser wrote that some of the rooms in the building were so filthy he could not arrive at a proper evaluation. He wrote some other crap that was weird, but I never stopped to think that he wrote what he did or arrived at the value he did because I am Italian and maybe he mistook me for being Hispanic (no insult of any kind intended).
My point! How many appraisals are wrong for white people, Chinese, or whatever and how many times are they wrong for black people even when the appraiser has no prejudices. So, I have to ask this question. How does a black person know, for sure, whether or not an appraiser is being biases, prejudiced or whatever you call it just because the appraised value does not meet their expectations.
I live in Gardena California on the border of the now famous Compton California due to all the rapper murders and the new King Richard movie. One seriously strange thing about Compton is the housing prices have always been as high as the whiter areas in Los Angeles, Gardena and surrounding areas. Does this mean that the homes in Compton are appraised by only black appraisers so the prices remain high?
As a white person, I do I need to worry about doing business with black people and putting myself at the risk of being sued because a black person thinks I charged him (or her) more than I would have charged another ethnic group?
I have a solution. I suppose, if I was an appraiser I would just ask black people what value they would like me to put on their appraisal so I can avoid being sued. Then, there has also been many incidents where black people are staging incidents for profit like Jussie Smollet, another incident where a black person refused to show his movie ticket to an usher and when was confronted by the usher confronted the black person mysteriously had several cell phones recording the incident from the beginning and sued the theater. I seriously understand there are some seriously ignorant and sick white people, but I also I see this crap will never ever stop because there is a lot of money to be earned by staging incidents for the sole purpose to sue white people.
Sorry! I didn't start this. If you want to make a claim then you should be able to discuss the subject, argue and back up what you claim.
- Chicago, IL · Member since 2017 · 138 posts · 62 votes4y
Originally posted by @Greg M.:
Originally posted by @Jay Thomas:
They don't. If they actually jumped in value, then you would have white people being hired by blacks to pretend to be the owner when selling the homes. What you have is a few cases where the appraisal done by a different person was higher when a white person pretended to be the owner. This is an estimate of value, not actual value, and it is extremely subjective. Additionally, there is no proof of the difference being due to racism.
Maybe one appraiser liked the view more than the other one? Maybe one added value for the new foundation and retaining wall that was done, while the other felt it added zero value? Maybe one used a comp that had an outdoor kitchen and the other one didn't? Maybe one used old comps and the other used freshly closed comps? Maybe one saw the driveway with a car parked in it covering the major cracks and the other didn't?
Between sales and refis there are probably 10+ million appraisals each year. There are awesome appraisers and lousy appraisers. Appraisal is an art, not a science. There are going to be outliners. That doesn't mean they're racist. I know you got your pitchfork sharpened and your torch lit, but perhaps you should wait for proof before condemning a person as racist. One day the accused might just be you!
@Greg M.
You dismissed Redfin report about how black neighborhoods are valued less than "similar homes" in white neighborhoods. You claimed they tweaked the data. Redfin must be another race baiting real estate company.
You dismissed cases where black home values increased when a white person pretends to be the owner. You claimed those were just some outliers and there is no proof of the difference being due to racism.In an earlier post, @Mala S. talked about how she (East Indian) is been treated differently from her husband (Irish/Italian). You are probably going to dismiss this claim as well. I bet you believe Redlining and blockbusting also have nothing to do with race, there is just more demand for whiteness.
It is hard to see a problem that you have never been subjected to. I don't think there is any point in shedding more light on this issue as you have clearly expressed your stance. - Rental Property Investor · Los Angeles · Member since 2018 · 844 posts · 1k+ votes4y
Originally posted by @Account Closed:
I live in Gardena California on the border of the now famous Compton California due to all the rapper murders and the new King Richard movie. One seriously strange thing about Compton is the housing prices have always been as high as the whiter areas in Los Angeles, Gardena and surrounding areas. Does this mean that the homes in Compton are appraised by only black appraisers so the prices remain high?
I'm not going to touch the topic of this thread....I have no opinion regarding racial bias etc. But I feel compelled to respond to this... again, not because of any black or white or brown issues...but just because of how wrong this statement is. Jack, as someone who combs through properties on a daily basis throughout So Cal, I can tell you without hesitation that your statement above is so wrong. Look, I hate to call you out like this, but sometimes your hyperbole is a bit over the top (like your model which assumed a monthly rent of 45K). As I'm sure you know, the truly white areas of Los Angeles consist of relatively small pockets which are predominantly along the coastline. I'm sorry, but to say that Gardena and Compton are priced just as high as the whiter areas of Los Angeles is ludicrously false! Ever drive through Angeles Vista Road between Slauson and Leimert Park? This is easily one of the most beautiful streets in all of Los Angeles...but the real estate prices are nothing to write home about. Can you guess why? As for Gardena, the neighboring houses in the very "white" areas of Torrance are pretty much double the price per square foot as what you'd find in Gardena...and even more extreme when it comes to Compton.
- Member since 2020 · 983 posts · 1k+ votes4y
Originally posted by @Tony Kim:
Originally posted by @Account Closed:
I live in Gardena California on the border of the now famous Compton California due to all the rapper murders and the new King Richard movie. One seriously strange thing about Compton is the housing prices have always been as high as the whiter areas in Los Angeles, Gardena and surrounding areas. Does this mean that the homes in Compton are appraised by only black appraisers so the prices remain high?
I'm not going to touch the topic of this thread....I have no opinion regarding racial bias etc. But I feel compelled to respond to this... again, not because of any black or white or brown issues...but just because of how wrong this statement is. Jack, as someone who combs through properties on a daily basis throughout So Cal, I can tell you without hesitation that your statement above is so wrong. Look, I hate to call you out like this, but sometimes your hyperbole is a bit over the top (like your model which assumed a monthly rent of 45K). As I'm sure you know, the truly white areas of Los Angeles consist of relatively small pockets which are predominantly along the coastline. I'm sorry, but to say that Gardena and Compton are priced just as high as the whiter areas of Los Angeles is ludicrously false! Ever drive through Angeles Vista Road between Slauson and Leimert Park? This is easily one of the most beautiful streets in all of Los Angeles...but the real estate prices are nothing to write home about. Can you guess why? As for Gardena, the neighboring houses in the very "white" areas of Torrance are pretty much double the price per square foot as what you'd find in Gardena...and even more extreme when it comes to Compton.
It is nice to have someone to correct me when I get carried away! I could be wrong???
What $45,000 per month are you referring to?
My statement in the post was:
"I live in Gardena California on the border of the now famous Compton California due to all the rapper murders and the new King Richard movie. One seriously strange thing about Compton is the housing prices have always been as high as the whiter areas in Los Angeles, Gardena and surrounding areas. Does this mean that the homes in Compton are appraised by only black appraisers so the prices remain high?"
Sorry! I need to change that so that I am not saying the prices for homes in Compton have always been as high as ALL HOMES as in whiter areas in Los Angeles. There are super ghetto homes in Compton, Gardena and Los Angeles.
When I said, 'all homes' I was referring to homes with similar qualities in regards to appearance, neighborhood quality, etc.. This house is not cheap in Compton. The Gardena house is a little smaller, sold for $635,000 last year, is a block from where I live and even if the price increased the difference is not much considering I would rather live in Gardena, any day due to less crime.
Let me know about the $45,000 monthly model you are concerned about. I don't pull my numbers from thin air. I get then from my math computations and would like to know what is not correct. Otherwise, I may make a hige mistake when I purchase my next property, if I can find one that makes sense. I know I am off-the-wall and sometimes even wrong, but don't want to be totally full of b.s.!
- Rental Property Investor · Los Angeles · Member since 2018 · 844 posts · 1k+ votes4y
Originally posted by @Account Closed:
Originally posted by @Tony Kim:
Originally posted by @Account Closed:
I live in Gardena California on the border of the now famous Compton California due to all the rapper murders and the new King Richard movie. One seriously strange thing about Compton is the housing prices have always been as high as the whiter areas in Los Angeles, Gardena and surrounding areas. Does this mean that the homes in Compton are appraised by only black appraisers so the prices remain high?
I'm not going to touch the topic of this thread....I have no opinion regarding racial bias etc. But I feel compelled to respond to this... again, not because of any black or white or brown issues...but just because of how wrong this statement is. Jack, as someone who combs through properties on a daily basis throughout So Cal, I can tell you without hesitation that your statement above is so wrong. Look, I hate to call you out like this, but sometimes your hyperbole is a bit over the top (like your model which assumed a monthly rent of 45K). As I'm sure you know, the truly white areas of Los Angeles consist of relatively small pockets which are predominantly along the coastline. I'm sorry, but to say that Gardena and Compton are priced just as high as the whiter areas of Los Angeles is ludicrously false! Ever drive through Angeles Vista Road between Slauson and Leimert Park? This is easily one of the most beautiful streets in all of Los Angeles...but the real estate prices are nothing to write home about. Can you guess why? As for Gardena, the neighboring houses in the very "white" areas of Torrance are pretty much double the price per square foot as what you'd find in Gardena...and even more extreme when it comes to Compton.
It is nice to have someone to correct me when I get carried away! I could be wrong???
What $45,000 per month are you referring to?
My statement in the post was:
"I live in Gardena California on the border of the now famous Compton California due to all the rapper murders and the new King Richard movie. One seriously strange thing about Compton is the housing prices have always been as high as the whiter areas in Los Angeles, Gardena and surrounding areas. Does this mean that the homes in Compton are appraised by only black appraisers so the prices remain high?"
Sorry! I need to change that so that I am not saying the prices for homes in Compton have always been as high as ALL HOMES as in whiter areas in Los Angeles. There are super ghetto homes in Compton, Gardena and Los Angeles.
When I said, 'all homes' I was referring to homes with similar qualities in regards to appearance, neighborhood quality, etc.. This house is not cheap in Compton. The Gardena house is a little smaller, sold for $635,000 last year, is a block from where I live and even if the price increased the difference is not much considering I would rather live in Gardena, any day due to less crime.Let me know about the $45,000 monthly model you are concerned about. I don't pull my numbers from thin air. I get then from my math computations and would like to know what is not correct. Otherwise, I may make a hige mistake when I purchase my next property, if I can find one that makes sense. I know I am off-the-wall and sometimes even wrong, but don't want to be totally full of b.s.!
Hi Jack,
I was referring to this post.
https://www.biggerpockets.com/forums/311/topics/675971-hot-areas-in-los-angeles-area?page=2
I agree that Gardena is much more preferable over Compton. However, I don't exactly view Gardena as a white area. It's pretty diverse and the southern parts have a good amount of Japanese Americans. But once you get to Rosecrans and above, wouldn't you consider the area pretty similar to Compton?
- Member since 2020 · 983 posts · 1k+ votes4y
You haven't been to Gardena much? It used to be mostly Japanese. For the past 30 years, don't quote me on exact demographics, but I will take a guess that Gardena is 50% African-American, 30% Hispanic and most of the Asians moved to Orange County. Don't forget Gardena is on the border of Compton and Carson which are predominantly African-American cities.
- Rental Property Investor · Los Angeles · Member since 2018 · 844 posts · 1k+ votes4y
Originally posted by @Account Closed:
You haven't been to Gardena much? It used to be mostly Japanese. For the past 30 years, don't quote me on exact demographics, but I will take a guess that Gardena is 50% African-American, 30% Hispanic and most of the Asians moved to Orange County. Don't forget Gardena is on the border of Compton and Carson which are predominantly African-American cities.
Exactly. So you're kind of making my point for me. There is a small Japanese community in the southern areas of Gardena, but I agree that the community is much smaller than it used to be. So in regard to the original point that I was making, this actually fits my narrative. Let's not pretend there aren't dramatic price differences in different pockets of So Cal even within our so-called progressive Southland. That's all I'm saying.
- Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes4y
https://www.bloomberg.com/news...
https://www.bloomberg.com/news...
http://www.freddiemac.com/rese...
https://www.appraisalinstitute...
Greg. You're a very bright guy and I believe you will reliably go where the data leads you, not to your comfort zone. Would like to hear your take on these two Brentin Mock articles, the Freddie Mac study the first one refers to, and the statement by the Appraisal Institute the second one refers to.
- Member since 2020 · 983 posts · 1k+ votes4y
Originally posted by @Tony Kim:
Originally posted by @Account Closed:
You haven't been to Gardena much? It used to be mostly Japanese. For the past 30 years, don't quote me on exact demographics, but I will take a guess that Gardena is 50% African-American, 30% Hispanic and most of the Asians moved to Orange County. Don't forget Gardena is on the border of Compton and Carson which are predominantly African-American cities.
Exactly. So you're kind of making my point for me. There is a small Japanese community in the southern areas of Gardena, but I agree that the community is much smaller than it used to be. So in regard to the original point that I was making, this actually fits my narrative. Let's not pretend there aren't dramatic price differences in different pockets of So Cal even within our so-called progressive Southland. That's all I'm saying.
I don't quite comprehend what you are implying. I live at 15523 S. Vermont Avenue in between 155th Street and Magnolia Avenue. 155th Street and Magnolia avenue run for almost 1/2 a mile and contain mostly large apartment buildings with 20 to 60 unit buildings. Every apartment unit consists of almost entirely African Americans and very few other ethnic groups.
As for your question about my numbers where rental income increase from something like $290,000 per year to $475,000 the next year, you are reading my chart wrong. The increase to $475,000 for the 2nd year includes the rental income when the property was purchased, the increased rental income that resulted from increasing the rent the beginning of the 2nd year plus the property's appreciation that resulted from the the rent increases from the close of escrow and the 2nd year. The $475k number includes all that in the previous sentence for the 1st and 2nd years, combined. The numbers are accurate and so amazing I have been checking my software's calculations for several years, had several brokers check my calculations and had a mathematician with a PHD for math check my calculations.
That is enough for me about ethnic groups before I get into trouble because the subject gets people heated up and ruffles feathers is a bad way. Time to move onto something else.
Pick on me any time because I am not always right and sometimes I get carried away and don't think clearly and I learn something new every day. Sometimes, I am surprise when I realize how ignorant I've been about many things. A few days ago, my head was so clouded I wrote a post saying my software indicated I could make more money getting a mortgage than if I paid cash. I wrote a few posts making that statement, even told that to my broker friend about my findings and when he frowned I knew I my brain wasn't working properly and that really bothered me. I made the corrections for my software and I was completely wrong. That is why I always tell people not to trust my software and it is always better to be able to do your own calculations for every investment decision rather than relying on the numbers a broker gives you.
- Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes4y
Originally posted by @Tony Kim:
Originally posted by @Account Closed:
I live in Gardena California on the border of the now famous Compton California due to all the rapper murders and the new King Richard movie. One seriously strange thing about Compton is the housing prices have always been as high as the whiter areas in Los Angeles, Gardena and surrounding areas. Does this mean that the homes in Compton are appraised by only black appraisers so the prices remain high?
I'm not going to touch the topic of this thread....I have no opinion regarding racial bias etc. But I feel compelled to respond to this... again, not because of any black or white or brown issues...but just because of how wrong this statement is. Jack, as someone who combs through properties on a daily basis throughout So Cal, I can tell you without hesitation that your statement above is so wrong. Look, I hate to call you out like this, but sometimes your hyperbole is a bit over the top (like your model which assumed a monthly rent of 45K). As I'm sure you know, the truly white areas of Los Angeles consist of relatively small pockets which are predominantly along the coastline. I'm sorry, but to say that Gardena and Compton are priced just as high as the whiter areas of Los Angeles is ludicrously false! Ever drive through Angeles Vista Road between Slauson and Leimert Park? This is easily one of the most beautiful streets in all of Los Angeles...but the real estate prices are nothing to write home about. Can you guess why? As for Gardena, the neighboring houses in the very "white" areas of Torrance are pretty much double the price per square foot as what you'd find in Gardena...and even more extreme when it comes to Compton.
I am not going to touch the racism convo here, but will only make a point regarding this Gardena/Torrance comparison. My grandmother lives in Gardena (where I manage her two rentals there as well) and my Aunt/Uncle live in Torrance. Torrance is more expensive than Gardena because it is west of the 405 and closer to the beach, the mall, etc. Real estate values are in large part priced due to location, location and location. I really doubt (99.99% confidence) that Torrance is more expensive due to more whites living there than blacks, it is due to the location, which in turn creates DEMAND and demand creates price increase. That is economics 101 in all industries.
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