All Forum Posts by: Brian Lacey

Just came across this thread.

I coached some junior college football in Southern California. Many players were out of state. A lot of SoCal junior colleges don't have on campus housing either. I'd suggest finding a market with a couple schools nearby it.

Example: Twentynine Palms has the College of the Desert which is notorious for bringing in football players from Florida.

Bubble is a popular word that gets thrown around. 

Seldom is it ever accurate.

SD is just at the top of the typical RE cycle every coastal primary market goes through.

SD isn't cheap and for good reason. Finding deals that can comfortably cash flow are difficult with little appreciation that can be expected in the near term (nearing the end of the cycle).

It's a healthy market, but the dominoes will collapse in SF and run down south to LA and SD, just the nature of California.

Only focusing on how to apply your tools, I would suggest looking at comps in the area. Narrowing down the comps and what they sold for should give you a much better idea of what the finished product should be priced at.

The other thing would be focusing on costs for repairs and renovations. Paper math will always be manipulated how you want to see it. End of the day, fixtures cost dollars and cents, that can add up quickly. Knowing the comps in the market, then a proper estimation of repairs with a built in expectation of things taking longer than expected and/or going wrong, and then applying your big data to the situation could be a powerful tool.

Another thing if you wanted to catch a trend, looking at population migration and job growth/decrease in tertiary and secondary markets. Getting in early before market appreciation is always a nice help.

Agreed, and well said.

The problem I foresee is an investor thinking they can bleed and wait for the growth.

You know this, but the market (whether stock or RE) can stay irrational longer than you can stay solvent. Which ought to be concern #1 for anyone approaching semi-speculative deals like this.

It's not a situation to be early if you can't sustain the bleeding.

Indeed. IB is a gold mine, but incredibly tough to cash flow, which means you're bleeding until an appreciation causing refinance. 

That's a lot of moving parts for anyone, but an experienced investor to take on.

If you can't increase the income. What can you do to lower expenses?

What are your current expenses for the property?

Read "Tuesdays with Morrie" by Mitch Albom. It might resonate with you.

and in regards to the extremes of MMM. 

I do agree with a lot saying it's a bit much such as the biking. 

But that's the MMM approach, taking things to their logical conclusion.

e.g. My car is empty 90% of the time. The other 9% I'm in it alone. Do I need a car then? 

It's an acquired taste, but I like it. If nothing else, it's different and that is refreshing in a world of copy and paste.

I love MMM. 

He doesn't make it too clear except early on, him and his wife are both very successful ever before the blog. Him in IT, and her as a realtor.

I love all of his posts. He got me onto LendingClub.

He's a big proponent of common sense.

- This is clear with as @Bryan Hancock referenced the Bogle-style indexing (Vanguard). Which is sometimes referenced by @Brandon Turner on podcasts in terms of ROI and anything less than say 5% "I could get that in the stock market" type mentions.

MMM is really a financial lifestyle blog.

I would referenced them for just about anything from traveling, credit card comparisons, investing, but not too much on active investing. Which is pretty much contrarian to the MMM lifestyle of purely passive investing. 

He does use time as currency for a lot of DIY. Which is contrarian to a lot of other successful investors who believe time is your #1 currency. i.e. Why spend the time doing it, when you can pay someone else back? You'll get your money back down the road, but you won't get the time.

All in all, love MMM. Truly one of the great resources out there because of its well-rounded lifestyle application of commonsense.

Separate the utilities.