All Forum Posts by: Gurjot Grewal

For looking at median home prices and comparing markets to get a general idea I have been using zillow. But the prices are so off. Dallas for example median home price is 336,973 with data thru july 31st 2022 on zillow. Realtor.com has the median house price at 529k. 

I was using zillow to also use their website to get an estimate for rents. I figured it'd be more accurate to use one site for this information. 

Quote from @Jay Hinrichs:

Quote from @Gurjot Grewal:

@Jay Hinrichs
I would love to invest in any of those areas. But feel im priced out of all those markets. Kelownas median price for SFH is over 1 million now. Around okanagon im looking at 700k+. I could go more rural in BC and get into a lower price range. But feel my money would be put to better use across the border.

Are you currently holding your kelowna property ? 

 I wish.. I bought a home on the Oakanogan golf course across from the airport  Golf course frontage paid 260k CDN for it brand new 2500 sq ft.  LOL sold for a profit but that is a big woulda coulda shoulda story for me.. I could have bought condos in the strata there at the same time for 50k each and ski in ski out at the ski area above Vernon for under 40k CDN..  OH well. I love the area and prior to coivd we went up twice a year to the Douglas Ranch for fly fighing  staying at the lodge. 

 Looking back at the prices, its truly mind blowing how much its appreciated in those areas. The area is beautiful tho. If only we could go back in time ahah

@Ashley Cross

Thank you for your insight. Have you done any STR yourself? Whats your typical strategy in cleveland if you dont mind me asking. Im planning every 4 months to spend a few days in whichever market I choose. Would you recommend more often?

Before making a purchase ill spend a week in the area. 

@Jay Hinrichs
I would love to invest in any of those areas. But feel im priced out of all those markets. Kelownas median price for SFH is over 1 million now. Around okanagon im looking at 700k+. I could go more rural in BC and get into a lower price range. But feel my money would be put to better use across the border.

Are you currently holding your kelowna property ? 

Since I started educating myself on real estate as a way to invest my money, I have had LTR in the back of my mind. Realistically thinking about what is my goal with RE, I have come to the conclusion it isn't to retire from my job, but reduce the time I put into my job. I enjoy my work, I only work 24h a week( so I have extra time to focus on managing real estate). After taxes, I comfortably save 80k CAD (62k USD) a year. I am a sub-contracted worker, but my work is very mentally and physically demanding. I would like within the next 8 years to reduce this to 12h a week, and would like to replace half my monthly income through real estate. 

So with this in mind, my goal is more cash flow. I don't have any experience with renos and don't feel comfortable yet taking on a BRRR project, especially at a distance. Since the start of this year I have dedicated minimum 2h/day to REI education wether thru books, podcasts, market research this forum etc. I am not opposed to putting in the work. From my understanding, STR are more time-consuming. Involve more upkeep. And can result in repairs etc. I am okay with that as long as I am profiting.

I would be investing in the US from Canada. I have about 80k CAD (62K USD) saved at the moment. 

When I look in markets like Cleveland, I can buy 2 turnkey properties a year with about 350 cash flow for each. (Not saying this is my strategy but would like to discuss this with members of this forum) 

Say my goal is 3.8k USD (5k CAD) it would take me about 10-11 properties to reach this. About 5 years. Not taking into account the additional cash flow, potential equity or anything which would all be reinvested. 

If I go into a market where the STR strategy works, based off what I have read and heard I may reach this 3.8k USD number much quicker.

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What are some things I may be overlooking? 

Is my current savings enough to get me into an STR market? ( I have looked into some cities in Florida that seem to be in my budget)

Reading some old posts it seems most investors spend anywhere from 4-6h/week per property managing STR is this an accurate number?

Other than being more "passive" is there any reason I should do LTR over STR?

One thing that concerns me is the property sitting vacant most of the year. Is this a valid concern? 

@Mo Karim @Steve Vaughan @Jaron Walling @Patricia Steiner @Matthew Irish-Jones @Susan Maneck @Shane Kelly @Bruce Woodruff @Caleb Brown @Ricardo Hidalgo 

Thank you all for replying. Everything mentioned has been very helpful. I will absorb all this information and try to filter out some of the markets I have been studying.   

Quote from @Bruce Woodruff:

Quote from @Gurjot Grewal:

This is my thought process. Am I completely off on this? 

 Yep....

Oh man ahah, what do you disagree with? 

I want to clarify I dont mean to invest in the cheapest neighbourhoods, but target cities with a lower entry point like Birmingham, Cleveland, Lawton. 

Seems like I have alot to learn. I have ordered “J Scotts recession proof investing” book. Would love any other suggestions or resources. 

Quote from @Taylor L.:

It is tempting to go for the least expensive property you can find, but there are a lot of risks that come with cheap properties. They tend to be cheap for a reason. Many are older and need a lot more upkeep than newer buildings. The repairs and capital expenditures can get very expensive. When you're funding those with low rents, it's a double whammy. Materials and labor can only get so cheap. 

It's also not a foregone conclusion that markets hit by recession will ever come back, particularly if they don't have strong jobs markets with a diverse base of industry. There are a lot of areas around the US that used to be major employment hubs but which have completely fallen off the map. For example, textiles and furniture were huge in parts of VA and NC but those industries largely migrated away. Steel was a big part of PA's economy, but that is largely gone (and with it the jobs).

Economic diversity is going to heavily influence the long term success of any buy & hold real estate investment. If the jobs leave an area, that's it. Economic diversity means one single industry won't drive the ups and downs of your investment.

Thank you for the detailed reply. All fair points that I will take into consideration. 

I was more so thinking investing into the cheapest markets in terms of median price. But maybe on the higher end of neighbourhood grade. But very true that alot of these homes do seem to be older. 

As for economic diversity. Is there any metrics/resources you use to gauge how diverse/stable the economy is? Im looking at alot of different markets and some are very clearly dependant on a single industry which I would like to avoid. Others seem to have diversified. 

With inflation from my understanding two things will happen. Either rates rise to the point where they lower inflation but we risk economic slow down, job losses, deferred debt etc. If the economy slows too much they may start cutting rates leading to more inflation.  

If rates rise, sure prices may come down but mortgage payments will still be unaffordable for most, and rents will go up. If they cut rates then more people are likely to park their cash into an asset like real estate leading to an increase in prices.

This is all new to me, im trying to educate myself. Im a Canadian looking at US real estate. My plan is to buy my first place before the end of the year, use the cash flow to finance a car.(Car accident led to my car getting written off) 

Theres something to be said about cities with economic diversity, maybe these areas will be more resilient. But why not just go to the cheapest market? Even if it drops by 10-20% if you cash flow long enough you can atleast break even. Not to mention as it gets more unaffordable everywhere else, people may migrate to where it is more affordable at times like this.

This is my thought process. Am I completely off on this?