All Forum Posts by: Gary Baker

My take is that my property tax increase should be linked to my W2 income increase. Investment property taxes should be linked to the annual rental increases in the property. My annual pay increase has been pathetically linked to official inflation, yet my daily expenditure rises way above the official rate. (Annual Insurance increased from $2200 to $3700).  Rentals are stuck in the dark ages as the market generally cannot afford more than the 1-2% annual increases that people receive. Property tax increases at 10% pa are not sustainable and this is going to hasten a property correction. There are going to be some who can ride this, but there are going to be many more in a blood letting.  Astute investors will clean up, but longer term damage will be done to the market if there is not some form of reform.

City's don't care, they are reaping a fortune currently, so nothing will be done until too late.

Am I the only one who sees this as FM selling off their toxic assets? Yes they are re-performing, yet both the stock and property markets are at all time highs because of quantitative easing. There will be a correction and 'DLJ' bought these at fairly high rates, if they want REO on the flip side that is a good deal. DLJ will parcel these up and sell them on. Someone, somewhere, will be hurting when the markets correct themselves.

@Suzanne P.  Listen to the NoteMBA podcast. Lots on insite into notes as a business and marketing. 

I have been feeling the same thing about the Dallas market for the last two years. We are due a correction. The real question is when, how deep and how long? The 1% rule has a corollary. If average market rents in an area are a 'figure' say $1500pm then the average house price should be around $150000 aka 1% rule. So, if sustainable rents are $1650 in your area then a house selling at $200k is over priced. Yet it is happening all over the metroplex. http://www.dallasnews.com/business/real-estate/2017/02/22/d-fw-home-prices-raise-red-flag-analysts Patience little cricket.

I am reading Essentialism by Greg McKeown. Book was the curtesy of Robert Woods from the NoteMBA podcast.

@Jose Barrios

I passed up a 3/2 a week ago. My offer was superseded by $10k and cash. House still needed a further $10k. Would have pushed the deal to over $200k plus closing and any rental income would be $1500 if you are lucky. I was not going to commit to this as we all know the deal is made when you buy. 

Another concern is everybody says it is different this time.  The Economist has written on this syndrome; "This time it is different" Eight centuries of financial folly. Written in 2009 and very relevant too today. The USA debt level and the Fed's prior printing, plus the worlds turbulent politics shows we are on a knifes edge for another 'real' correction. 

Here is the abstract if anyone interested. 

https://www.economist.com/media/pdf/this-time-is-d... 

I am so glad professionals have found the DFW market tiresome. Numbers don't stack up. ARV's from wholesalers are the higher end so your finished product has to be very good to achieve this, repairs maybe accurate but only if you are a GC. My quotes are always +25% on what is stated. As the small player there is no low hanging fruit. MLS property is snapped up in a matter of a day so no time to really do any due diligence before submitting a contract. I just feel that buyers are being stupid and sellers unrealistically greedy. Market fundamentals right now are similar to 2006/7/8 and it is frightening.

@Abel Teklu

Not many people know about notes in the UK or the rest of the world. That is 'big' bank business. Hats off to you.

@Account Closed I see you are in the U.K.  I would read and head the cautions in this post linked below. I personally, have put notes on a back burner because of the many pitfalls. If you going to go ahead, I would suggest training and mentorship from Scott Carson or Eddy Speed or similar. Listen to the NoteMBA, understand how Rob has made mistakes and that is even with his "boots on the ground". There is good money to be made... and lost. Sorry I don't have a lawyers name, however check out Dave Van Horn's website. He is big in this space so his recommendation would be solid. 

Good luck. 

https://www.biggerpockets.com/forums/79-real-estat...

@Michael Lauther

Michael, thank you. Your post has me thinking that I need to rethink my strategy for cash flow. Age is against me. I am very weary on out of state ownership, so I am going to have to investigate as I have seen a multitude of turnkey operations. Home ownership like this would require a very good and trustworthy property manager.


@Rick Hamrick
Rick, I am not a great fan of HOA's, although they can ensure that general property maintenance is kept up which would probably be a good idea for out of state property. Diane also mentioned that there is a bundle of 8 for sale and they come in at $59250 each, so you are dead on about the value. Where can a person find granular historical data that you mentioned? I don't trust Zillow as their data is often stale and incorrect and often property long sold.


@Diane G.
Loopnet, the more you know.