All Forum Posts by: Michael Lucero

at the end of the day the answer is, it depends. It can be very accurate or off by 40%. Its an algorithm so it all depends on the quality of the input data, such as how comparable the comparables really are that are being used. If there are a ton of cookie cutter houses as comparables and a lot of recent sales then you will probably get a more accurate representation of true value than if there are fewer sales and comps being used not really comps. 

Because of this, you should never use it as an actual input for your due diligence on value. Look up recent sales on redfin, have an agent pull comps, and if you want, have an appraisal done.

Unless you desperate for a tenant and think you need to take an agent's person to fill the spot, then I would not pay an agent anything. You're doing all the work and did not hire this agent. The people moving in can pay the agent if they want help to find them a place to live.

Hey Karl, why don't you look at the agoura hills/calabasas area right outside of LA. There are tons of plots of land, lots of hiking, views or the ocean or very close to the ocean. Decent sized lots are 300-600K. It doesnt have the forest, but it is very open and outdoorsy.

You can find tons of info on cash flow calculators on google and BP. It's really just common sense plus a few assumptions. What do you take in as rental income less expenses such as mortgage, insurance, repairs, maintenance, property management (if applicable), vacancy expectations, etc. then you have your cash flow, a positive or negative number. 

Most people don't want to be a burden on someone else, but there is a huge difference in thinking you are a burden and actually being one. Once you become one, you will know it based on the other person's response, not your own.

You have to understand, just as he agent does, that buying a house is a process, sometimes a long one. If the agent is willing to continue showing you places, they've already determined you are not wasting their time. At the point you are wasting their time, they will tell you and you should expect this of them. Dont let your mind create fear where it doesnt exist. At first i would trust your judgment in your process when looking for a house, but maybe after 3-5 agents stop the relationship, then you may want to look at what you are doing, cuz maybe you are just wasting time or dont have a focused enough strategy.

Just be clear with the agent upfront so they can set expectations and fairly decide if they want to work with you. If you are just casually looking, don't act like you know what you are looking for and are willing/able to pull the trigger soon. Only feel bad if you lie or put up a front, otherwise dont worry.

Totally agree, given the numbers, the foreign purchases have gotten to a level where you could consider them a hindrance to the local population's home ownership ability and it is a definite possibility that government intervenes. However, until something actually happens, this is speculation and without gvt intervention, demand is demand and prices should stay strong. So it seems this entire thing hinges on whether the gvt does something or not, which is something that investors have to speculate on when making purchase decisions.

 I agree, i was going to mention rich parents as well. Its sort of the only way for a situation like this to exist, rich people buying, since the regular population cant afford to buy, on the average. As well as people stretching themselves too thin, but i would argue this isnt at levels to justify calling it a bubble. 

Sure foreign money was really coming in 4/5 years ago but in no way has it gone a it still exists in a large way. I have several chinese acquaintances in the LA area and helping the chinese buy is still going strong.

Lucas it doesnt sound like becoming an agent would be a benefit to you on your own projects. This is based on my assumption that you are new and not soing a large number of deals. The rehab stuff that was mentioned is more for a systemized business where you have a lot of activity otherwise the time and cost may not outweigh the benefits. Otherwise an agent can do most of the work, just have to find the right one. Of course you can succeed as a part time agent, and it may work out to sell friends/family houses. Just run some numbers.

The demand in LA is significantly built up by foreign money, as opposed to the people living their. Chinese in particular having been locking up their capital in LA real estate by the billions, which is one of the reasons for the disparity in income and housing prices. Heck, with the eb-5 visa, there are entire luxury condo complexes going up in downtown with hardly anyone living in them. Once this foreign money dries up And interest rates creep up, you should hopefully see prices drop, but i dont think it will be a burst.