All Forum Posts by: J. Martin
J. Martin has started 178 posts and replied 3656 times.
Post: FREE 9/22 Ticket to Bruce Norris' I Survived Real Estate Event
#1 Real Estate Events & Meetups ContributorPosted - Rental Property Investor
- Oakland, CA
- Posts 3,834
- Votes 2,925
Free Tickets available for some BP investors who would like to come, as I have a few extra seats, due to procrastination. (preference to those going to the SF Bay Summit, but all are open). Tag me if you'd like to come and know you can/will. Once you confirm, the ticket is free. But if you confirm and do not show up, you will need to pay the $200/apiece for the empty seat you did not let someone else enjoy! Just trying to spread the love to someone who will enjoy it :)
This is black tie / formal affair.
And it's raising lots of money for Charity!
Bruce Norris, Sean O'Toole, (both coming to Summit) and lots of other great high-level speakers will be there. So come join us and meet the best!
4:00pm-5:00pm: Registration, group photos, and free Nixon Library viewing
5:00pm-5:45pm: Registration continues, group photos, and appetizers served
5:45-7:00: Dinner is served
7:00-8:30: Event
8:30-9:00: Dessert and break
9:00-10:15: Event
Location
The Nixon Library
East Room
If you're in Yorba Linda, Costa Mesa, Newport Beach, Anaheim, Orange, Santa Ana, Irvine, Huntington Beach, Corona, or Riverside, hit me up!
Post: SF Bay Area Economic & RE Update (Ongoing)
#1 Real Estate Events & Meetups ContributorPosted - Rental Property Investor
- Oakland, CA
- Posts 3,834
- Votes 2,925
Originally posted by @Sandeep S.:
Great analysis @Account Closed
Looking at these charts, I have always wondered is that the 2001 can be viewed as "a blip" for bay area RE market instead of a recession (like 1991 and 2007). It was only SF and SV market that got affected in 2001. And if we ignore the blip - the expansionary cycle lasted all the way from 1995 to 2007 (13 years!). While it is a risky thought - but what if the current cycle lasts also 10-13 years with one blip on the way. (and that "blip" could be happening right now!).
While a risky thought - but if this alternative theory turns out true - we may not see serious bay area wide correction until after 2022. Just a thought...
Sandeep,
Great point. Could happen. But we're not at/past that blip yet. We haven't seen the temporary drop in prices yet. Just in rents in some areas. And we haven't seen job losses like the end of the dot com boom. The unemployment rate is just flattening out now. The job loss part is the riskier part, IMHO.
We are basically back where we were in 1990, 2000, and lower unemployment than in 2006. What happened after those years?
Sometimes they were flat. One slightly up. One way down.
And all of the no-fun parts start just after we get to the best unemployment numbers. As compared to the multi-year boom in prices you see after unemployment rates peak and start improving.
And as Minh's graphs from Paragon's Patrick Carlisle show (couldn't get him to come out to the Summit :( ), there is more rent risk in the latter part of the economic cycle.
For all those finding deal that work for them, given the rent or potential price risk, I say go for it. Especially if transitioning the property.
But for those just buying for rents and prices to continue going up, I think it's not a great risk/reward bet, IMHO.
Post: SF Bay Area Economic & RE Update (Ongoing)
#1 Real Estate Events & Meetups ContributorPosted - Rental Property Investor
- Oakland, CA
- Posts 3,834
- Votes 2,925
Originally posted by @Lena Wang:
Originally posted by @J. Martin:
Originally posted by @J. Martin:
@Account Closed, @Andrey Y, Thank you for calling me out.
I said this about a year ago. My perspective is very similar. (And fortunately, the data is consistent with what I was talking about a year ago I think ;)
**TRENDS ARE CHANGING**
As of May 2016 in my graph above, the CA unemployment rate stood at 5.2% and dropping. I specifically noted that the unemployment rate tended to revert before the last 3 recessions, not long after the unemployment rate hit or went below 5.0%.
So where are we at today? 
Aug 2017: 5.1% unemployment rate in CA
15 months after the May 2016 data, we're almost back where we were then. How? After reaching a low of 4.7% - the same as the low of 4.7% last seen in the Dotcom Dec of 2000 - the unemployment rate (gasp!) went up again. This is consistent with my expectation from a year ago. If you look back above at the May 2016 data when I first said this, you don't see any upward spike. It was all pretty much downhill smooth sailing. I based my premise of reversion on history - not any rough patches then. Clearly something has changed in the trend since then.
As Minh likes to say, history doesn't always repeat itself. But it rhymes. (And damn, sometimes it almost seems to sort of repeat itself too..)
Is there some sort of pattern here? Was I expecting that a year ago?
Well, maybe I got lucky, but I think yes. I didn't get out a divining rod orouija board or anything. Just looked at it from a third grader point of view ;) There's some point it doesn't cross for long. Then you get one of those vertical grey lines a bit later..
I'm not necessarily saying that this first reversion to an increase in the CA unemployment rate in about 7 years (look at the 7yr steady decline) is going to cause a recession tomorrow. You can see that it usually bounces around or stays near the bottom for a while, then starts increasing consistently, resulting in a recession - then we "find out" (officially) we are/were in a recession 9-15 months later. There is some minor improvement in the labor force participation rate, but not enough to save all this.
As we've seen from the 2005 - 2007 era, the govt, lending, and the marketplace can push the economy further than it's natural path should go. But it looks to me like the economy is telling us we've just gone past "as good as it gets." So I would hold by my original statement of 1-2 years.
I think there should be a recession starting in 2018, which would be officially identified by economists in 2019. Can it go further? Yes. Should it go further? Probably not. But the longer external stimuli try to force the economy beyond it's natural path, the more reckoning I think there will be in the next recession.
San Francisco tells the same story.
Trends are changing.
3.4% Unemployment rate for SF as of July 2017.
Up from 2.9% in my graph above as of May 2016.
Each cycle has a portion at the end where the years of trending improvements flatten out. And it looks like we're about there.
What do you guys think?
Am I crazy here?
Do the graphs tell a story..?
Hi @J. Martin:
Thanks for this. Yea I mean what you are saying def makes sense and the graphs do tell the story and support your theory. But isn't there other factors in play here? Such as the rising of interest rates will tighten funds going into the market, and when banks loosen that grip, isn't that going to spur another round of buying frenzy? Also the bay area's economic status and it's potential should also effect one's decisions on whether or not to invest.
Disclaimer: I'm by no means an economist or an experienced real estate data person. Just reading and learning at this point still.
Are there other factors at play?
Certainly. Myriad factors.
But I found some data that seems to be telling a story.
The Bay Area data tells a story also.
Jobs are pretty important.
Could there be another round of buying frenzy? Yes.
Do I think it's a good risk-reward time to jump in, in general, when job growth is slowing after 7 years of boom, and trends are changing? Not really.
Is there maybe a better risk-reward time of the economic cycle? I think so.
Don't get me wrong I love the Bay Area. (And I own a good chunk of property here).
But you could have said the same thing about the Bay Area's economic status before the last recession. If you don't have a property you can clearly transition, and are just buying because things go up..
Famous last words are:
"It's different this time."
Post: SF Bay Area Economic & RE Update (Ongoing)
#1 Real Estate Events & Meetups ContributorPosted - Rental Property Investor
- Oakland, CA
- Posts 3,834
- Votes 2,925
Originally posted by @J. Martin:
@Account Closed, @Andrey Y, Thank you for calling me out.
I said this about a year ago. My perspective is very similar. (And fortunately, the data is consistent with what I was talking about a year ago I think ;)
**TRENDS ARE CHANGING**
As of May 2016 in my graph above, the CA unemployment rate stood at 5.2% and dropping. I specifically noted that the unemployment rate tended to revert before the last 3 recessions, not long after the unemployment rate hit or went below 5.0%.
So where are we at today?
Aug 2017: 5.1% unemployment rate in CA
15 months after the May 2016 data, we're almost back where we were then. How? After reaching a low of 4.7% - the same as the low of 4.7% last seen in the Dotcom Dec of 2000 - the unemployment rate (gasp!) went up again. This is consistent with my expectation from a year ago. If you look back above at the May 2016 data when I first said this, you don't see any upward spike. It was all pretty much downhill smooth sailing. I based my premise of reversion on history - not any rough patches then. Clearly something has changed in the trend since then.
As Minh likes to say, history doesn't always repeat itself. But it rhymes. (And damn, sometimes it almost seems to sort of repeat itself too..)
Is there some sort of pattern here? Was I expecting that a year ago?
Well, maybe I got lucky, but I think yes. I didn't get out a divining rod orouija board or anything. Just looked at it from a third grader point of view ;) There's some point it doesn't cross for long. Then you get one of those vertical grey lines a bit later..
I'm not necessarily saying that this first reversion to an increase in the CA unemployment rate in about 7 years (look at the 7yr steady decline) is going to cause a recession tomorrow. You can see that it usually bounces around or stays near the bottom for a while, then starts increasing consistently, resulting in a recession - then we "find out" (officially) we are/were in a recession 9-15 months later. There is some minor improvement in the labor force participation rate, but not enough to save all this.
As we've seen from the 2005 - 2007 era, the govt, lending, and the marketplace can push the economy further than it's natural path should go. But it looks to me like the economy is telling us we've just gone past "as good as it gets," for the natural path of the economy. So I would hold by my original statement of 1-2 years, from last year.
I think there should be a recession starting in 2018, which would be officially identified by economists in 2019. Can it go further? Yes. Should it go further? Probably not. But the longer external stimuli try to force the economy beyond it's natural path, the more reckoning I think there will be in the next recession.
San Francisco tells the same story.
Trends are changing.
3.4% Unemployment rate for SF as of July 2017.
Up from 2.9% in my graph above as of May 2016.
Each cycle has a portion at the end where the years of trending improvements flatten out. And it looks like we're about there.
What do you guys think?
Am I crazy here?
Do the graphs tell a story..?
Again, my premise has always been that real estate appreciation in the SF Bay tends to go on a strong multi-year run after the unemployment rate has peaked, and starts to improve - and appreciation tends to be lowest in the years after the unemployment rate has approached or gone below its historical lows.
That's the reward/risk equation I approach with the cycle..
Post: San Francisco Bay Summit - Oct 7 & 8, 2017 - Join the Reunion!
#1 Real Estate Events & Meetups ContributorPosted - Rental Property Investor
- Oakland, CA
- Posts 3,834
- Votes 2,925
@Brian Burke
No one can find deals any more, but you're still out there finding and funding them on a regular basis.
A lot of it is hard work and determination. But people get discouraged.
Do you mind sharing about how many properties you have to look at, and how many offers/negotiations you get in, for each deal that you close?
What type of characteristics are you looking for in cities that you invest in? Does affordability of rents/prices for the local population play a roll? (The San Francisco Bay seems to have limited upside on the affordability side, so that's always in the back of my mind...)
@Keong Kam
Glad you're as excited as I am! Lots of great folks coming out to share :)
Post: San Francisco Bay Summit - Oct 7 & 8, 2017 - Join the Reunion!
#1 Real Estate Events & Meetups ContributorPosted - Rental Property Investor
- Oakland, CA
- Posts 3,834
- Votes 2,925
I got your message, and will try to get ahold of you today.
@Metra Ulloa
Welcome out for your first Summit! @Bill Exeter is the 1031 exchange pro coming out to the Summit, so be sure to connect with him. @Andrew Fingado is still looking at Stockton to buy I think, so connect with him. Might be able to provide you more flexible timing on the sale if his investment criteria matches what you're selling. You'll pick up lots of tips on operating your business, connecting with service providers, and of course investors from around the San Francisco Bay Area and around the country.
Gilroy isn't too far from Santa Cruz. Have you been to @Shane Pearlman's meetup? (in Capitola I believe?)
@Johnson H. also has a great meetup in Milpitas. And @Jeff Pollack also has a great meetup in San Jose. I used to drive all the way down from Richmond and Oakland to attend these, and do business with people I've met down there.
@Will Barnard,
Looking forward to seeing you with Bruce at "I Survived Real Estate," and of course even more so about the Summit! Are you taking some time to relax or go on vacation while the market's a little hotter Will? Or does the money burn a hole in your pocket and keep you aggressive? Bruce has been talking about "Quadrant IV"/late cycle investing. But part of the reason I decided to travel so much is it's too much effort for the risk on a lot of deals right now. Am I just lazy? Where's your next trip?
Post: Newbie looking for market recommendations to check out...
#1 Real Estate Events & Meetups ContributorPosted - Rental Property Investor
- Oakland, CA
- Posts 3,834
- Votes 2,925
Welcome to BP and getting started :) Thanks for the shout out @Arlen Chou. Go meet the local investors at @Katie P.'s meetup in the East Bay, and come meet everyone at the Summit in Oct if you can make it. Kathy Fettke will be talking about the states that are most up and coming, and lots of other out of state stuff. Especially on Saturday. Networking is what freed me from my 9-5 job.. so go out and meet some folks!
@Ryder Meehan also has a SF meetup focused on out of state investing.
There are more in the > Community > Networking events section of the site too.
Post: Investing in Oakland
#1 Real Estate Events & Meetups ContributorPosted - Rental Property Investor
- Oakland, CA
- Posts 3,834
- Votes 2,925
Have a couple properties in Oakland, and overall love the place.
Rent control is the biggest PITA, for sure.
I think there are better reward/risk times to buy than when everyone and their mom is employed, but I think that's true with most asset classes...
If you are in an owner-occupied duplex or triplex in Oakland, it's exempt from rent control after 2 years, for as long as you live there.
Other millennial and tech cities are the typical suspects.. Seattle, Portland, Austin..
Post: House Hacking in Bay Area @>$1M!!!!
#1 Real Estate Events & Meetups ContributorPosted - Rental Property Investor
- Oakland, CA
- Posts 3,834
- Votes 2,925
You're right you can't do FHA at that price point.
But check with credit unions like San Francisco Credit Union. They're doing 0% down on >$1MM single family homes, so they might let you get away with 10-20% on a 4plex. They understand the higher-priced market. Maybe check with SoFi also? (not sure about them, but they're thinking outside the box..). Probably will depend a lot on your personal finances.
I own 2 4plexes in the SF Bay that I will gladly sell you for less than a $million right now, and closer to SF than Vallejo! It is hard to find a 4plex in an area you'd really want to live in for under $1MM though.. ;)
Post: Back up cleaner and handyman on the Peninsula of Bay Area, CA
#1 Real Estate Events & Meetups ContributorPosted - Rental Property Investor
- Oakland, CA
- Posts 3,834
- Votes 2,925
My people are up in Richmond, so Peninsula isn't good for them. I'm planning on finding someone down there also, so they don't have to drive so far. But my team has been wrapped up with the Summit, so haven't done it yet..
I would check also check nextdoor.com. Great place to find local people..