All Forum Posts by: Leland Barrow

Welcome to BP, if you ever need anything let me know. Even if it is just a second opinion.

Welcome to BP!

This is morbid but use the "what if I die logic". You taking risks is fine, but if you have dependents that rely on you then that changes the decision dynamic. If you are single then do whatever you want. If you have dependents then I wouldn't add any risk by mixing personal and business assets, debts, or equities. Since most investors are the fulcrum of their business and investments, what they are building can collapse after they pass. Personal assets belong to the family and business assets belong to the business. Although a primary residence is not an asset it is still not wise to over-leverage it and then get hit by a bus the next day. Even if you have no dependents consider those that will have to unravel your estate. A bunch of debt just creates problems. No one plans on dying when they leave for the day, but it happens and it is part of life. Save money, build self discipline, invest wisely. Just my personal 2 cents. Consult a professional for legal and financial advice.

Just advice and meant with kindness. Lead with what you offer. For example "I will wash your car, make your coffee, answer your phones, follow up your leads, drive your properties, run your errands, and I give a mean back rub in exchange for your time and knowledge with mentoring me". Just a suggestion.

You can also come to terms with the fact that this may not be the right time to invest.  I firmly believe that the market is transitioning and there will be better deals just around the corner. Here are a few tips:

Look regionally, Texas as a whole is a strong market but Houston for example is just starting to soften.

Save money, now is a good time to store away resources like a squirrel storing away nuts. When the market transitions to a buyers market then you can put those nuts to use.

Get financing in order, this can be time consuming so go as far as you can with getting any financing you may need lined up. Define what your niche is and model deals to present to hard money, private lenders, or local banks. Starting the conversations and bringing in examples that reflect what you are going to invest in can get the ball rolling. You may not plan on using hard money but having someone on the sidelines that knows you, knows what you do, and knows how you do it is valuable if you find yourself in a predicament where you need quick cash to jump on a good deal. 

Fall brings lower prices, flippers go a bit dormant, rehabbers tend to slow down, and you can find better opportunities in the fall.

Look at it as the off-season and do what all successful teams do in the off-season they prepare, practice, and get focused on what is ahead. That is better than just jumping on some deal that really is not a good deal, just because you want a deal.

The nicest option would be to make it a smaller window. I wouldn't want an inaccessible window there in case a kid decides to break it out. I think the options are to make it smaller or brick it up. I wouldn't do the glass blocks for the same reason. I personally would take it out and brick it up. It would be Murphy's law with that particular window getting broken. Windows in showers will only be a long term expense.

Austin does have a great job market that is helping to pull housing prices higher, but it also has a tremendous amount of investing activity. Austin will never be a San Diego, Denver, or San Francisco but it will be a strong housing market for a long time to come. If Texas instituted a state tax and lowered property taxes closer to national averages then Austin, and Dallas would surpass those Cali cities. I don't think we are near a bubble in Austin. I do think that it will reach an equilibrium soon. The investment activity has sucked up inventory and pushed new home building in the suburbs again. The Austin interior market will cool off and closer suburbs will start catching up. This model has happened in numerous major cities. We will get to see Austin be reborn and watch as its population eventually rivals Dallas, Houston, and San Antonio. Austin is the city that everyone else in Texas wanted to live in, and now that it has a growing job market it is growing up. Personally I think that the I35 corridor will be the major business corridor in the United States in the next couple of decades. It will supplant California as the birthplace of innovation and industry. It has everything that California has port cities, access to the panama canal, energy, coastal access, highway access, and access to cheap foreign labor. Texas also has one of the best business environments in the U.S. and is consistently adding population. California has legislated themselves into future irrelevancy. In fifty years it will be the next Detroit. You will have Northern Cali, San Francisco area, and San Diego. The rest of the state will be blight and poverty. They no longer have any natural fresh water supplies, they have a middle class that is fleeing, and most importantly the ideal of the "Golden State" is changing. Perception is everything and the younger generations are no longer in love with the idea that California is the birthplace of dreams. The kids today hear the news playing in the background when their parents are watching TV and they hear about the opportunities in Texas and the like. Why buy a home in Cali for 900K when you can buy it Austin for 500K and have the experience of a youthful and energetic city? I was born in California and I was raised there. I have seen it change from the 80's, 90's, and 2000's. There is nothing special about it anymore and that is really the last value that the state had. There is a time when the state will be on the line for more entitlement payments then they have money, and they will ask for the other states to bail them out. All golden cities have deteriorated and are valued for what they were, not what they are. SoCal is no different. It is not immune to the world changing and evolving, and it is itself prepared itself for the change that is required for communities to adapt to new economies. Even Hollywood is becoming a relic. The TV that I watch is no longer produced in Hollywood, the last vestige in entertainment "movies" are also looking elsewhere to cut costs, in an market that is striving to adapt to consumer needs and relevancy. As Hollywood goes, so goes Cali. 

If you read all of that you must be a glutton for punishment lol.

If it is near the oil fields then be careful. A lot of that stuff was put up in a hurry. Risk vs reward when you can throw a lot of buildings on a lot and get $500 to $1000 per month in rent per room you will get all kinds of strange setups. An assortment of buildings and mobile homes sounds like one of those and you could get a land mine with septic, water, and coding issues.

Welcome to BP!

Low inventory and high prices will be followed by high inventory and low prices. Homebuilders will start booming until they over build. When the market is flooded with new home inventory older homes will drop in price. Investors will buy up old home inventory and rent them out. This will dry up inventory and we are back at low inventory and high prices. Just a market cycle. The only thing that is obvious is the market is changing. Anything else is speculation. It is a sellers market and next it will be a buyers market. Investors that are buying on low margins right now will be in trouble. You can already see people willing to settle for lower cap rates, cash flow, and paying more than 70% of market value. I wouldn't buy at 70% market value right now. Maybe 50-60%. because 70% now could be 100% next year. There is a KB home that I drive by that cant build inventory fast enough. Its KB....thats a sign....