All Forum Posts by: Matt Groth

"Disinterested " is putting it mildly. I'm in a small town, but the youngest plumber is in his 50s. I am small time, looking for the right fit, so am admittedly picky, but I don't need 10. I'm looking for 1. Have offered promising kids 25 to 30 bucks an hour to start...no dice. Not looking for a warm body, a kid with ambition. Starting a hard worker at 25, is way cheaper than a space filler at 15. The wealth gap is going to get immensely wider. If my guidance counselor in high school knew what I was doing, he would be mortified. I have a 4 year degree...

I know how the educational system works, and it has only gotten worse. Construction is beneath most kids..

Originally posted by @John Lyszczyk:

Originally posted by @Matt Groth:

Hey Matt,

I'm curious about your labor shortage comment. We are experiencing labor struggles in the lumber industry as well. COVID still seems to be having an effect on treating manufacturers and sawmills.

My question(s) for you as a GC, what do you think is the reason for the labor shortage? Are younger generations disinterested in the trades?

2 Votes

I'm a gc. No one has talked to me about delaying their project. I am booked to 2022 as it is. People gulp at the materials cost, but do it anyways. Waiting for a pullback that may or may not come is a tough game. If lumber crashes, people are petrified the world is ending. By 2024, even if prices come down, labor will almost certainly be up. I have written about this before, but the labor shortage is real, and shows no sign of improving.

Originally posted by @Krystle Khoo:

So what do you think of this assessment...

2020-2021:

-Lumber supply squeeze and demand spike pushes prices through the roof.

-Builders delay building due to uncertainty and high lumber prices.

-High demand for housing and lack of new housing supply pushes DOM down and housing prices go up nationwide

-Lumber mills react to price increases and expand production capacity. Building that new sawmill starts next year, won't be finished until end 2022/2023.

So...

-Price to build new homes will continue to stay high until mid 2023, which means those won't be coming on the market until late 2023/early 2024.

-Sometime in 2023-2024 we should expect to see much more sawmill and treating capacity than we had pre-covid. This will eventually lead to a supply glut and much lower lumber prices.

-Cost to build new construction compared to the "new-norm" level of housing prices in 2024 will be cheap.

-This will lead to a rapid growth in housing starts in 2024, which will stagnate home prices for some time.

Do we have any builders here who can add some insight here?

1 Vote

Talk to a locally owned bank, and explain it all. They have heard this story before. Anyone who comes in with that low of a dti is a pretty safe risk

0 Votes

Low rates, immense labor shortage, high materials cost, increased equity means fewer foreclosures, increased money supply...lots of tailwinds, a few of these need to change for the market to gave a meaningful drop. Just had a potential client ask about my schedule, I'm booked out a year, so he is asking about spring 2022. The demand is solid

8 Votes

Narrow the focus. You can't be great at all of it at the same time. Selling houses on the side, day trading, rentals, etc. Pick 1, become proficient, then add later if you decide.

1 Vote

Originally posted by @Kate Barry:

@David A Lisowski For sure! We have an extreme inventory problem where I live and why I've only made 2 offers. Town of 11,000 people, and there are I think 3 active multi families on MLS right now? Its bare bones to start but I'm not giving up!

I live in a town smaller than you, vacation Hotspot, competitive market. Stop looking for what you need, and look at what you have. I'm a gc, so have somewhat of an advantage. I look for stuff no one wants, and then make it what I want. We changed zoning on a property to put 3 duplexes on 1 lot. There is no multi for sale, so we built it. Just got an offer accepted last week for a former office building, that has been on the market for 6 months. Small rehab, and it will be a str. The obvious "turn key-ish" str's are easily another 80 to 100k. We scored a deal by looking where no one else is.

1 Vote

@Joe Villeneuve love the idea of the story problem first.

My wife is a teacher. I can see math. I did well, went through calculus. People could never understand how I could do the story problems, and struggle more with the concept. This makes sense

1 Vote

@Michael Plante you could just refi and keep them. Cash in hand, tax free, and you still own the properties.

1 Vote

@Steve Morris you can only sell at the high, and buy at the low, if you live in your car in the meantime.....more or less

0 Votes

Buy the book "Profit First".

0 Votes

All Forum Posts by: Matt Groth

Matt Groth has started 1 posts and replied 242 times.

Post: Why is Lumber so Expensive?

Post: Why is Lumber so Expensive?

Post: Utilizing HELOC for downpayment on new property questions

Post: Are we in a bubble or is this market permanently changed

Post: Which path for First investment?

Post: Keeping the faith after multiple rejections...

Post: Are there any math impaired RE investors here? :)

Post: 1031 alternative or how to avoid/delay tax on profits

Post: Are Baby Boomers to Blame for Low Housing Inventory?

Post: There has got to be a way...