All Forum Posts by: Gregory Schwartz

First: Can you commit to living there for at least two years? Doing so will help you avoid capital gains tax if you decide to sell later.

Second: Test it out by renting the property for a year. This will give you a clear understanding of its rental potential and whether it’s worth it as an investment. It’s also an excellent opportunity to gain property management experience. Then, if or when you decide to sell, you’ll have valuable insights to apply as you roll those proceeds into your next investment property.

Hey Gabriella, as a property manager and aspiring agent you should have no problem finding a mentor. Who do you manage for? Is the landlord or your boss, not a great first mentor?

Brokers will be eager to add you as a new agent to their office. Your job will be to find an investor-friendly brokerage willing to teach. Learning from agents commonly working with investors is your next opportunity to find a mentor.

To be honest, I wouldn't try to find a mentor from random investors on the internet. Just my 2 cents. 

I appreciate the well-thought-out response. And agree that any prediction is speculative because obviously know one can predict the future. Case in point... Covid. However, I use recent historical market data to help determine what is about to happen. 

What other data should I be watching? What data has shaped your perspective? 

@V.G Jason That all sounds speculative. What data supports your claim?

Existing home sales saw significant jumps in February and September/October 2024, both aligning with drops in interest rates. Are you suggesting this wasn’t a result of pent-up demand but rather due to some other factor?

I give advice around this topic to clients every day and want to know if I'm missing something. 

Maybe we're defining pent-up demand differently. I would define 'pent-up demand' as the number of people ready and willing to buy a home but holding off for very specific reasons. 

1. Potential buyers (good credit, income, and savings) holding off because of high interest rates. Aka they could get approved for the median price home today at 7% rates. 

2. Buyers that would buy if rates were 1% lower. They need the drop in rates in order to be approved for the home they want to buy. 

If these groups are significant, it suggests there’s pent-up demand that could enter the market when one of two things happen:

Rates Drop - Rates fall to levels that allow more buyers to qualify for the homes they want.

Buyer Expectations Shift - Buyers realize that 5% rates aren’t coming back soon and decide to move forward.

Based on the increase in activity I saw in Sept and Oct in my business, when rates hit low 6s, I'd say my market has plenty of pent-up demand. 

Attention investors in Bryan/College Station, TX! Let’s kick off the new year with a value-packed meetup.

📅 Date: Thursday, January 9th
🕠 Time: 5:30 PM - 7:30 PM
📍 Location: Schwartz Realty Group, 4103 S Texas Ave, Suite 105, Bryan, TX

What we’ll cover:

• Recap of the 2024 market and key takeaways
• Predictions from economists for 2025
• Discussion on strategies to grow your portfolio

This is a fantastic opportunity to connect with like-minded investors, whether you're new or experienced. Enjoy food, beverages, and great conversations. We hope to see you there!

Quote from @JD Martin:

Quote from @Gregory Schwartz:

I just read this article from Redfin (Housing Market Predictions for 2025) that predicts mortgage rates will stay at 6.85% in 2025.

That seems like one of the few predictions saying rates will stay that high. Are they way off, or could they actually be right?

In my local market (College Station, TX), high rates in 2024 already caused a big jump in inventory, which created some good buying opportunities. If rates stay high, do you think inventory will keep climbing, opening up even more deals for buyers who are ready to pounce?

 Curious - why did "high" rates cause a big jump in inventory where you are? It's the complete opposite where I am - no one will sell their existing homes because they won't give up their ultra-low rates. The only inventory is new construction. Nationally, the levels of pre-existing home sales are back at 1995 levels mostly because of the interest rate conundrum, so I'm interested to know what's happening in your area that high rates are causing more people to sell?

 Each market is different but as a national average, the increasing rates have increased the inventory. Active inventory is up 40% this year. https://fred.stlouisfed.org/series/ACTLISCOUUS

Yes, there are less listings each much but the current listings are taking much longer to sell in most markets. This means that inventory keeps piling up. Basically, the demand is much weaker than the supply. 

Quote from @Jay Hurst:

Quote from @Jay Hurst:

Quote from @Randall Alan:

@Gregory Schwartz

Then there is this on privatizing Fannie & Freddie:

"Trump may renew a housing fight that could rattle mortgage rates":

https://www.cnn.com/2024/12/02/economy/fannie-mae-freddie-ma...

The gist of the article is that without the government backstopping mortgages, rates could realistically go up!  

"In a 2016 paper, Mark Zandi, chief economist at Moody’s Analytics, estimated that full privatization of Fannie and Freddie would cost the typical American taking out a new mortgage $1,200 annually. Taking into account home prices and interest rates in 2024, that added cost today would be between $1,800 and $2,800 per year for a typical mortgage holder, Zandi told CNN after updating his original paper’s calculations. Zandi said the added cost would be even greater for Americans with lower incomes or credit scores."

All the best!

Randy

 I am afraid rates will go up a bit after Powell's press conference as he may indicate that they are likely going to pause on fed funds rate cuts.  of course he would never state this is so many words, but the bond market will be parsing every word looking for clues. 

 and mortgage backed securities are  are up a half point as Powell speaks at his press conference.

 ouch. Mortgage News Daily is reporting rates up 0.21% to 7.13%

@Aaron Dyson those DR Horton homes are a great investment (IMO). Close to Rellis and the job growth in what the City of Bryan is calling the Texas Triangle. 

The only mistake is that you didn't work with me!!! I'm kidding. Managing these will be a breeze. Hit me up I'd love to help. Also, we need to get you to start coming to the BCS investor meet-ups! 

"I mistakenly had a rental policy instead of a builder’s risk policy."
I'll be honest this is often overlooked. And yes this is a 1 in 1000 situation but plenty of other disasters could happen and having the right insurance policy is huge to protecting down side risk. 

Thanks for sharing