All Forum Posts by: Nahal Beckam

Take some equity out buy some stuff out of state. Good stuff that's qulity and numbers work....not cheap stuff you've seen amazing marketing material and spreadsheets for that won't perform.

You could easily get to a point where the out of state properties supplement the other expenses and you increase your networth...while keeping a bay area asset.

You'd have to figure out what you need $ money wise to cover and then a market that fits your budget. Unlike a 1031 though times on your side to do due diligence and be picky....

At worse you "lose" some money and learn something... Probably won't be any worse off then had you sold and paid taxes.

Best case you make money and learn something and find another BETTER property and snowball it til you hit your goal/magic number.

It's not unrealistic to be able to hit about 400/door with 25% down (including taxes, insurance, and mortage, maybe a HOA or prop mgmt). It'd be more with no note or you could leverage and buy more and taken on more debt.

Leave some cash in an acct as reserve fund to cover unplanned expenses and repairs...

 I couldn't tell you definitively what is the best course of action without knowing more about your individual situation/goals, however what I can say is that if you are going to sell, now is a phenomenal time. If it were me, I would likely sell that property and immediately reinvest. If you do not already own your primary residence, you may want to look in to house hacking as it is in my opinion the single greatest wealth generating tactic in real estate for new investors. Let me know if you have any more questions!

 Hi Nahal,

Guessing a crash is going to come and selling should not be your main reason unless you know something we all don't?   Has the market softened since 06/18? Yes.  The market has stabilized in the last 2 months. Does this mean a crash in the future?  I don't know.  I think we will see ups and down and flat pricing.

I think a more important metric to look at is your rental.  How is it performing?  I'm pretty sure I already know.  $1.3m house in South Bay is not performing well as a cash flow property. Just doesn't happen in the Bay Area unless you bought 6yrs ago.  If you did kudos to you but now it just means that you have all this equity generating like 2%ish return.  You need to review your rental and see what your plan B will be if you sold. 

Correction: 4.25% ish 30 year fixed rate. That was a typo. Sorry.

You can get a good rate again fed isn't going to be raising rates....and sales are slow. If you wanted to (and assuming you have e enough) you could always play around with equity....but I'd keep it.

Home prices tanking was a fluke and doesn't follow traditional trends of a recession. I wouldn't bank on ithappening again as some argue that was a once in a generation event.

On flip side I wouldn't bank on uncapped rapid appreciation either....and me personally I'd probably consider some other markets depending on my income/goals.

There's always good deals if you have the capital to aquire them..and the time to wait/find them.

Assuming you can absorb the higher cost pull some equity out and go shopping.

All depends on the locality and price range. Some instant millionaires will cash out their options. But this time it is not Google or Facebook company. Everyone knows these new ipo taxi models need to be profitable quickly or lose appeal to investors. 

Some are getting hit by retrenchment just experienced at Oracle(10%), MSFT etc.  Many non-profitable public companies will experience shortage in cash and need to tighten their belts. In 2019 companies do not buy back their stocks much so they have to tap into their assets- talents to do with less.

Where on earth are you getting the idea about mortgage interest rate hikes?  It is very low right now at ~3.41% 30 year fixed. 

The next 3-5 months it will be active with such lower interest rate. Buyers now have some say so what they like and have more choices. People do not overbid that much like before.  As for later part of 2019 it is hard to predict. Key is employment or lack of employment opportunities because of job loss. Home prices then will reflect that change after ~1 quarter or so.  

If you sell this spring it is likely you already missed the 2018 peak but will do just fine in 2019.

Sam Shueh

Cupertino, CA

 Hey Nahal,

So you're definitely on to something in identifying the different metrics you specified (falling prices, rising interest rates), however that information is now a bit out of date. Over the course of the nine months from April 2018 to January 2019 the average sale price of a single family home in Santa Clara county fell from $1.7 million to $1.4 million. The average sale price has risen since then to just over $1.5 million this month (March 2019). This information all comes directly from the MLS as I am an active real estate agent in Santa Clara county and I would be happy to provide graphs, tables, etc if you like. As for the interest rate, it's true that we did expect them to rise through 2019 however there has been a new development quite recently on that subject as well. Short term and long term yields have become inverted (google inverted yield curve for more info), which is a rare occurrence but is an indicator of a coming recession. This basically means that the expected yield from a long term investment is now lower than the expected yield from a short term investment, which makes for a wonky economic environment as you might imagine. As a result of this, the Fed is unlikely to raise rates for the foreseeable future. Let me know if you have any more questions on this topic! Good luck and happy investing!

@Nahal Beckam refer to this thread :

https://www.biggerpockets.com/forums/55/topics/687...

Refer to responses from Dan Heuschele.

Hi Nahal, I am not an export but been in a business as an investor for several years. My call is I will sell it and wait until market to come down. When the market is down cash in hand is a win. 

Thanks 

Gelbu