All Forum Posts by: Matt Groth

@JD Martin We always blame the buyers, but the sellers control the asset. Oftentimes it is locals that sell for top dollar instead of helping the nice young couple in the community. I get it. I'm not blaming, but anyone who has gone on vacation to a developing country and marveled "how cheap everything is", IS that out of town buyer. It is only going to get harder for those trying to get started.

@John Teachout asking price is a funny thing. We need to figure out the new normal of newly printed money, low rates, labor shortage, etc. What is the math that will make the market correct? The market is "high" compared to where it was 2 years ago, but what if 2 years ago, things were at a discount? We don't know yet. My feeling is the market is pricing in what has happened in the past year monetarily. Not saying it's right or wrong, but it is pretty tough to compare year over year when everything has changed.

@Steven Westlake everything that property needs is expensive. 1000 days on market is a LONG time for people to not see the value. Log cabins are a pain, and this sounds like not a good one to begin with. Probably not worth putting in a penny. The trailer is depreciating daily. It is probably worth the cost of the lot, minus demolition and disposal. Subdividing is also really expensive. Surveys, utilities, etc. Sounds like a loss every way you look at it. Even if you bought, rented put as is, time is ticking on both structures.

Just out of curiosity, what kind of gross rents are you getting? Are you.buying it fully furnished with all of the gross rents that are already booked? If you can even get it, your financing will be easy or cheap, so you are paying a premium for future earnings.  How long will it take to net back the 30k, plus the added financing costs? 

@Blaine Moore put yourself in the banks shoes..you loan me more than the property is worth, because of a future income that has not taken place yet. Foreclosure happens, and the only way for the bank to get their money back is to operate it as an str, because the market won't pay what they have into it. Banks hate that, and you should, too. It's just a house. Nothing more. Your option is to bring more cash to the table, but I'm not a fan of that plan, either.

@Jeffery P. Define what "loss on investment " means...buy a house for 300k, 20 percent down is 60k. You wanted cashflow of x, but instead got 0....for 30 years, but all expenses were paid by the tenants. 30 years pass, and the house is worth 150. Did you lose? Nope. That is a HORRIBLE deal, and you are still up on the investment. If you had to guess, life or death choice, is re more or less expensive in 30 years??? There is no guarantee ever, but if re performs that poorly over the next 30 years, my guess is that your stocks did worse.

@John Mark Morelli what do you have for access to water? I am on the edge of the Boundary Waters. Many of the properties have sprinkler systems, which is a propane pump running out a lake to sprinkler heads around the property. They have proven their worth in several fires.

@Caitlin Daniel 2 things. The asking price is just a starting point, but people tend to view it as THE price. 100 percent over ask could still be a deal. Have you ever been in a store where a package says msrp is 99.99, but we sell it for 49.99? Are you getting deal?aybe, maybe not. Look at one of your duplexes, and see what it sold for 30 years ago. Add 50 percent to the asking price. Would that have mattered? I'm not saying just go out and overpay, but we are in a spot where money supply, rates, materials cost, extreme labor shortage makes me say we are going higher, and a "crash " may be just actually having some properties that don't get offers in the 1st week. If the markets are so inflated, where are the sellers?

@Annie R. Joe is right

I was going to say something very similar

Look at it this way...would your company pay the same salary you get to me? The only difference is I won't actually show up nor do any of the work... the other option for you, and it can be difficult, is to be the equity partner for the diy'er. I'm a gc, built a ground up duplex. I provided none of the cash, bit all of the work. Returns are great for both of us. It just has to be someone you REALLY trust.