All Forum Posts by: Juan Pardo

The title says it all assuming you can get back 7% on stock gains yearly, going by current trends this seems extremely conservative, companies today seem to be growing much faster than the historical data we usually reference for average returns. So the question is, is it worth the extra work? Dealing with agents, contractors, property management, risk of expensive repairs, and so on. I am genuinely curious are you guys seeing 20% returns yearly or something because seeing all of the extra costs needed to even just begin saving for a house is kind of demoralizing even when you have a good salary and side businesses. Let me know what you guys think.

There are many stocks on the SP500 that are losing roughly -30%. American stocks are hold up only by a few technological companies, and the market capitalisation of some of them is absolutely surreal (for instance, Tesla).

There are also several important risks looming over the stock market, like antitrust proceedings against Facebook, the approval of a Google tax in Europe, or huge fines for not complying with data privacy regulations. Actually, most companies would have to pay big fines for this, if the authorities did their work.

As for real estate, in my opinion there is an obvious bubble, but the pace at which real estate prices adjust is slow, so I would expect a delayed reaction to the coronavirus economic crisis, due to the own nature of real estate. Foreclosure proceeding take their time, and also getting rid of non paying tenants take time. Lay offs also take time to impact the economy.

And, on a global scale, we cannot forget that the world economy is intertwined and there are developing countries and fast growing nations whose GDP and whose economies are shrinking for the first time in decades.

So for the moment, I think cash is kind, and it is wise to keep money ready for the upcoming opportunities.

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Originally posted by @Dean Bogan:

I'm in Wilmington and research in Charlotte, Raleigh, Durham, Fayetteville, Chapel Hill, Jacksonville, Greenville, Greensboro and possibly Winton-Salem. There is not much on the market for investors in Wilmington--At least for my goals.

Why do you think Wilmington is not a good market for investors?

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Originally posted by @KIran K.:

@Juan Pardo

We renovated .. he just ruined our material so the house was in worst condition than when we bought. Nothing was working from plumbing to electricity. Idk how he messed up the electricity. I’ll add photos for reference

I see.. I was wondering if, in your local market, you could have flipped the property "as is" without doing any rehab. Is it possible to make money using that strategy?

1 Vote

If I were you, I would wait and observe the market carefully before making any decision.

Prices are at 8 year highs and maybe they are headed for a correction.

Start looking at how prices evolve over a year for the kind of property you would like to buy. Register which properties sell and the sell price, and which properties do not sell and try to understand why they do not sell. Then you can make a better decision.

1 Vote

Originally posted by @Brent Zande:

@Jay Hinrichs That is awesome! I know I am a little bit of an alarmist, got caught in 2008 with my neck way out and do not want to repeat. The economy is a big ship and it will turn slowly so we should all have time to make our plays if we keep watching it closely.

I think you are right, the real estate sector changes slowly, but will be affected by the economic crisis. I am very surprised that there are people purchasing property before the US election, that could mean changes to taxation for instance.

1 Vote

Originally posted by @KIran K.:

@Alla Kassianova

Because conventional lenders require the property to be safe as in livable.. I am a loan Officer so I knew only hard money, cash, or private money could finance this deal. It was tough so be careful :)

So you never got to renovate the house?

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Originally posted by @Yan Wang:

I singed contract in Jan 2019. it took about 1 year and 3 months for the project to get completed. I paid 70% for the property when signing the contract. Then 20% 2 months after. I paid the final 10% in August. Part of the reason I get the deed today is because the pandemic and risk of traveling to Mexico

That's fast construction in my opinion. Almost lightning fast as compared with other countries. The payment calendar is odd, though, advancing so much money. That's shocking.

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To sum up about leverage: if someone buys or sells a SP500 future (leveraged contract) people will say "you are crazy", "that's the best route for bankruptcy" and the like... but if someone has 10 mortgages (leverage, the same as with the futures contract) people will think is it great.

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Originally posted by @Joe S.:

@Murphy Kling short sales are not automatically approved. Short sales will nuke seller’s credit in a big kind of way. There’s no guarantee the bank would take a short sale low enough to make it a Slam dunk. I would probably consider taking over the seller’s house payments until I could resell the property at sometime in the future. This would save the sellers credit. I have bought a number of properties where the numbers did not justify getting a new loan, but I bought the property in such a manner that it was a win-win for both seller and buyer and definitely was a win over foreclosure or short sale. Keep in mind though if you agree to take over a person loan payments you better plan on paying that loan even if the house is not bringing in the income that you thought it would or if a renter didn’t pay.

That's what I was thinking too.. why would the bank accept a short sale in the first place?

2 Votes

Originally posted by @Austin Yamamoto:

Hi, I’m a newbie and thinking of investing in real estate. Ive been browsing these forums off and on for some time and want to jump in.

I just had a baby (Late in life) and it’s beginning to hit me that if I want to spend more time with my baby I need to do something else than work for a paycheck for the next 25 years.

I live on Oahu. I bought my grandmas house 5 years ago at a small discount and fixed it up. I’m planning to move back with my parents for a couple of years to help with babysitting. During this time I plan to buy another place and rent it out and move into it after a few years as my primary residence. I’m wondering if I should sell or rent.

My current loan amount is 450,000. My mortgage, taxes and insurance is 3,000. I spoke with a property manager and they said they could get around 3,200 in rent. I spoke with my realtor and she would list it for 950,000.

Thanks for any advice.

"My current loan amount is 450,000. Mymortgage, taxes and insurance is 3,000. I spoke with a property manager and they said they could get around 3,200 in rent. I spoke with my realtor and she would list it for 950,000."

First of all, I am not familiar with the real estate market of Hawaii, so I don't really know how far 400k can get you.. but with that amount of appreciation, and looking at how things are unravelling (COVID etc), I would just sell the property and sit on cash till a new and very clear opportunity comes up.

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All Forum Posts by: Juan Pardo

Juan Pardo has started 2 posts and replied 196 times.

Post: Real Estate Investors! Are the return worth it instead of stocks?

Post: Who's Buying Properties in North Carolina?

Post: Worst FIRST FLIP: LOST OVER 100k

Post: Thoughts on the real estate bubble

Post: HOUSING PRICES WILL SLIDE!

Post: Worst FIRST FLIP: LOST OVER 100k

Post: Investing in Tulum, Mexico

Post: Determining appetite for risk in terms of leverage

Post: home owners getting divorced = short sale

Post: Newbie advice in Hawaii