All Forum Posts by: Josh Green

@Joe Villeneuve

I think we're staying from the topic here - seems like we're going in circles and it's not helpful for readers. Thanks for sharing and contributing your opinion though!

@Joe Villeneuve

Agreed. You can say a median house in city A will be a median house in city A despite price fluctuations. It goes but so does everything else quite similarly in %. This is a generalization of course and there's always exceptions/outliers.

@Joe Villeneuve

It's really sixs both ways. Generally housing increases in cost/affordability. In times of lower interest rates that accelerates and times of higher rates that decelerates (although still a positive trend). It is a theory, but looking at the macro economics of real estate, everything boils down to supply/demand. A median home will remain a median home - just the price will increase with time in relation to increasing inflation, wages, etc.

If you want a top 5% PM at below market average pricing you're going to want to talk to this guy:

@Account Closed

 @Account Closed is the best guy for a PM job!

 Hi Darek,

I actually am exactly what you're looking for!  I am with Graystone Investment Group and we're an investor focused brokerage.  We have everything you need in house from lending, realtors, property management and more.  In fact, @Account Closed our PM, is probably the best PM you'll find in the Tampa bay area!

@Account Closed

@Brooke Phun

Purchase prices being high, it not being a huge vacation spot and not having much exit strategy due to lack of industry, I would look in other areas such as the Tampa area. Not too far from Naples and probably the nearestarket that is still both affordable and profitable with high outlook for appreciation and growth.

TLDR; I prefer buying in a high interest rate environment and then refinancing in a handful of years, rather than buying in a low interest rate environment and refinancing in a handful of years.

Wanted to share my thoughts and see what others (new and seasoned investors) think! Not long ago I started my REI journey in a low interest rate market (historically). First couple of acquisitions I was able to get some awesome interest rates - 3.5% and 2.625%, respectively. More recently in the increasing interest rate market coupled with going with a commercial investor loan my latest rate is 7+%.

At first, I felt I was so lucky to be buying with low interest rates and was discouraged at the elevated rates currently like many others.  I thought about it with a long-term mindset and realized something: 

I would rather buy in a higher interest rate environment!  Here's why (hear me out):

"marry the property, but date the rate"

Rates, even 30yr fixed, should be viewed as temporary. For an investor, long-term hold and growth is what makes REI so powerful and one of the primary tools within REI is leverage (specifically here, a refinance). If you buy property A at a higher interest rate on day 1 you will see outsized returns in the next cycle when interest rates drop below that mark.  The first few years you cash flow, pay down the loan a little, etc until the rates drop to your liking.  You go to refinance and find the value of the home to be much higher during times of lower interest rate (supply/demand principal).  So, you capitalize both in appreciation/LTV cash out AND the lowering of your initial interest payment in this scenario.  Likely, your PITI will drop, your rents are higher than when you started day 1, AND your property value will inversely increase with interest rate decreases.

In scenario 2, you buy with a low interest rate but with a higher purchase price (accordingly).  That purchase price is locked in and later, when you go to refinance, you will be stuck with a higher interest rate than where you started.  Your PITI will likely increase and now your amortized mortgage has a higher interest rate slowing down your initial principal pay down.

Of course, as you hold 10+ years you may consider yet ANOTHER cycle of refinancing so this really flips back to favoring scenario 2.  However, assuming interest rate cycles are 3-10 years I would prefer to take scenario 1 (buying in a high interest rate environment) where I plan to refinance within 4-7 years of initial purchase.

Hope that was easy to follow/understand!  Just some thoughts on my mind :)

 When it comes down to it, I 100% echo what @bill said above.  Supply and demand is the metric that drives prices for everything.  Interest rates go down, buyers can afford more, so that same median buyer can now afford a more expensive house.  Median house goes up in price to match/adjust to what the median buyer can afford.  

The market is still very hot historically - 20 days on average to sell and the historical average in a balanced market is 60+ days so we're still 3x faster than a balanced market.  Just like @Bill said, the starting price should be LOWER than the comps in order to drive up the demand and create an auction.  Listings with reduced prices that don't sell tend to be a combination of what Bill said: too high to begin with and buyer sentiment (wants to lowball, thinks you're overly desperate to sell, etc).

This is now the time to re-evaluate the curb appeal, interior staging, listing presentation appeal, increase open houses, and consider a upfront credit to buyer to re-attract customers.

This is great! The gold standard I'm seeing in my area (TB) with 15% down (turnkey) and under $350k is around $1000/mo net profit after operating costs, PITI and PM fees.