All Forum Posts by: Alex J.

wow really

thats incredible, what was the address if you dont mind me asking im curious to see what type of housing is still this overheated in the valley.

if it was your primary residency you dont need to pay profits on it up to 500k for a married couple, 250k single, if you have lived in property for 2 of 5 years 

sell the property since youve owned it long enough to qualify and do something else

This topic is always fun.   My crystal ball is broken so I will go on some loose ideas.

Demand generally stays flat with small variations in major mature metros...so think of that before making an assumption of bubble...what drives price ?  Supply and demand...so major metro like LA that has a huge shortage in housing is still flat to grinding up.  SF NYC has had tons more massive development so although prices are astronomical there...they are flat to down.

I think this massive appreciation in the last 5 yrs is mainly due to a huge liquidity shock (fin crisis) which has been restructured...and then it was followed up with a supply shock because builders were strapped for cash.

At this point I'd say many major metro are in equilibrium and will grind up and down from here.   Getting good deal is more important than ever especially if you are flipping.  Buy hold is about having good fundamentals reasons and the housing market doesn't seem to be bucking that trend anytime soon without some catastrophic tail risk event

just a heads up things like this should be posted on the  marketplace.  

is it a single family residence?  if so i dont think that applys to the rent control rules.  check with the RSO department 

Wow no way r3 350k???? 10,000 lot?  Go with govt housing you'll make an incredible return building mf and maybe you can get some grant for it 

In mature markets demand stays flat and supply dictates price 

@Gilbert Avila

i LOVE westmont!!!!!!!  most of it is non rent controlled, this is a great area for an investor seeking better cap rates.. i have 8 units in the area myself.  

depending on how updated your 2bed is, id say 1300-1600 is not out of the question.  i have a few section 8 tenants and most are not... the section 8 tenants in the area still need to be vetted, make sure you collect deposit, and make sure you get people who do not have evictions (this filters out a LOT of people).  its actually still a very competitive rental market and in my opinion isn't going to cool down given all the large scale construction projects in the region near Inglewood and the lax Manchester square etc

 best of luck

yes - most people dont have reserves and are generally over leveraged which is why they end up in foreclosure.  its very important to understand when its time to leverage and when its time to scale back risk.

right now we saw the big appreciation in price in the last 4-5 years so in my personal opinion its time to scale back leverage and not put on the same risk as before.  keeping a 30% equity and still cash for lets say 10% or 2 years worth of your loans as reserve is a lot of money especially on the coasts but its a serious cost of doing long term sustainable real estate investing in my opinion.  for those that go leveraged or just do a 1 off deal  theres a lot of risk thats often not discussed enough on this forum but its very critical for longevity.

buy smart, stay leveraged but with reserves, be opportunistic in the right market environments, and most importantly be conscious of what your financial needs are and what you can stomach.  

I love and hate this topic.  Let's assume a long term buy hold.. likely leveraged it will be 80% loan to value.   A market correction of 50% was the 2008 correction... So a market moving  20% lower would wipe your equity but if you invest conservatively you will have some reserves in the downturn.

Leveraged people will get squeezed but seeing a 20% or greater is not something I see happening without some serious Geo political risk.

Let's assume a flip.  If you buy right a flip should probably have a reasonable return on investment for it to make sense.  I'd assume 20% return at least on a flip so if market corrects while I'm doing the project I'll turn it into a rental and reduce my exposures that way so when market recovers I'll have hopefully had more equity built...tax write off, and all the other benefits from r/e

Key here is don't over Leverage and keep reserves.   Greedy pigs get slaughtered