All Forum Posts by: Eric James

@Dave Meyer it is hands down still the best asset class. As an investor and an agent I can put 5% down and get 3% (more or less) back in commission. If the property cash flows $0, gives me $0 in tax benefits and appreciates at 3% per year on pace with traditional inflation it’s still a massive winner. Let’s put some numbers to it.

$500k purchase price. $25k down. $15k in commissions on an 80/20 split yields a $12k commission. $13k net cash out of pocket (plus closing costs if you can’t get a seller credit to cover, I usually can).

3% appreciation is $15k per year on my original investment of $13k. 

Show me another asset class where I can make 115% on my money. It simply does not exist. I did this 8 times in the last 8 years. It is simple and repeatable. 

I agree with you but for different reasons.

Engines of economic growth —> population growth and high density —> more liberal people.

But also

Engines of economic growth —> higher returns.

And

Also population growth —> higher returns

I consider the government policies to be at best secondary.

Just look at the Midwest where outsourcing led to and population decline led to stagnant or decreasing housing prices in cities like Rochester, Buffalo, Cleveland and Detroit despite all those cities being decidedly blue. The classic blue cities, SF, LA, Seattle, NYC, Boston are all the best deep water ports in America.

Quote from @Bruce Woodruff:

@Scott Trench Of course you're right...and good topic. But.......I just don't like the whole principle of the thing. Blue State landlords are using the Govt to strongarm the tenants to make more money....in a backwards sort of way. Let the market do it's thing, which you can't in a Blue State.

Blue state LL are not the ones pushing these laws.  It is the masses who do not have a basic understanding of economics.  They do not understand how some of these laws affect supply and cause prices to rise.  They do not understand how newly identified risks (such as covid eviction moratorium) or increased risks (such as occur with rent control and the difficulty to evict bad tenants that pay) result in higher rent.  Higher risk must be balanced with higher income.  In tenant LL terms, making it harder to evict marginal tenants result in rent increases.  

One of the latest is a law that proposes all tenants can have a pet with no additional costs.  This increases LL risk and wil result in higher rents.  The end result is the non pet owners will end up paying a rent that supplements the pet owners due to increased risk (pet damage) requires increased income.  

I heard a rent control advocate recently state that rent control results in rents increasing greater than it did before the rent control because of greedy LL   She did not understand that the increased risk associated with not being able to get rid of bad tenants drove rents up.

Basic economics, but the masses do not see the effects of these laws.  

I would prefer there to be no rent control, no extreme covid eviction moratoriums, no law mandating pets but these policies have resulted in me making a lot of money.  Just because I benefited greatly does not imply that I advocated for any of these laws (I did not). 

Quote from @Eric James:

This is why I build outside city limits. In TX. 3 months from the time I purchase the land until they (I build small apartment buildings) are ready to be rented.

3 months soup to nuts.. is astonishing wow. !!!  

Quote from @V.G Jason:

I chalk up to seasonal, I know most won't agree with me but when I was buying end of Q4 and things were sticky they were telling me it's the economy. I told them it was seasonal.

Definitely some strong buyers right now, but nothing too extraordinary from what I am seeing. Granted, I am more line drive focus in a few areas-- one being Oregon. Jan 2023 was in my opinion quite strong, investors came out in droves and some were just bullying others. 

For good reason after this Oregon STR, I am tapping out of REI until Fall 2024.

no question to the seasonality of the market in the NW.  I think if when rates dip into the 5's or high 5s the market is going to really explode.

Quote from @Account Closed:

Quote from @Chris Seveney:

@Mike Hern

Ok so they are unlicensed / uninsured escrow agents. I could not figure out what the heck they were or why they were needed. Now it makes sense.

I think they will also fill out the purchase and sale agrements and track the progress of the transaction. Sort of a blend between real estate agent and escrow officer. In that capacity, I believe they give advice (legal?) to get the deal to close and to handle the seller's questions. That's what I pick up.

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(I do that without hard costs or a real estate license)

From Pace's Transaction Coordinator Molly Tennant

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It's quite a cottage industry. ;-) You can do this from your basement bedroom in your underwear someone said.

negative TC CANNOT fill out the contract that would be illegal. 

Jay, I think in a post-covid world people have so emboldened they think they can do whatever they want and face no legal consequences. The whole RAD situation seems eerily similar to the Ponzi scheme run by "The Cashflow King' himself, Matthew Motil who was just charged by the SEC in 2023 for stealing over $11 million. Lets not forget SBF and the entire FTX collapse and the list certainly goes on. Did they ever really intend to pay their investors back? I'm interested to hear from other investors what their thoughts are on the matter? I think it's only a matter of time before the truth is revealed.