All Forum Posts by: Randy Gutierrez

Quote from @David Mathews:

I invest in C class first time homebuyer type of neighborhoods.

Well I mean, there is your answer.

The first-time homebuyer is willing to sit on the sidelines for now.

Definitely comes a point where you can only learn so much and the only next step would be to take action. I read, watched, and listened for about 3 months before I told myself that the only way to move forward is to obtain real experience. About a month later I had my first property. The education phase is important, without it you are not mitigating risks and I am not sure I would have obtained the confidence to move forward.

I have close friends and family who have been debating of investing in RE for years but never take the plunge despite me being proof to them that they can do it. In the end I just think people are hardwired differently no matter what you tell them. There is a reason the 1% are what they are right? 99% of people just don't want to take action.

Quote from @John Carbone:

Quote from @Randy Gutierrez:

Quote from @Michael Wooldridge:

Quote from @Randy Gutierrez:

Quote from @Michael Wooldridge:

Quote from @Randy Gutierrez:

Quote from @Michael Wooldridge:

@James Hamling not the best example because there was a massive Porsche shortage. But I agree 100%. And it’s not so much that people the upper class doesn’t spend disposable income it’s just that they already spend it. To your point lower class lower middle class have much less displayable. Your reasoning is the exact reason I gave the example of food stamps. There are small businesses all across the US that make a good portion of their income off of food stamps. It’s not so much a direct cash infusion to the poor but more to the businesses servicing them.



@Greg H.

Our 2 supermarkets located in NYC see about 19-25% of purchases made with SNAP benefits (EBT Food, EBT Cash, WIC). Pre-pandemic it used to be around 7-15%, a sizeable increase. In theory, if 25% of the business disappeared today we would definitely have to close up shop.

 Case in point. I know a lot of businesses rely on this and in communities people wouldn’t think. 

Which is why I brought this up in the beginning. The simple truth the wealthy buy what they want generally speaking already. There buying habits don’t necessarily change too much as income goes up or  down. Double the income of those making $18k a year or add $10k a year to those making $50k-$60k a year - you better believe they spend it on new toys. 

Truthfully not even sure why it was an argument earlier with some.

I would say one is located in a B neighborhood while the other is in a B+, so yes they are not in low-income areas per say.

Funny you mention, my wife works for one of the top 3 companies in the world and handles marketing for LVMH. She basically said what you said, the only people still buying their products today are the ones that are well off and during the times of stimulus there were crystal clear patterns indicating where and what people were spending their money on. Today those patterns have disappeared.

Not surprised by the first. I avoid politics like the plague but it’s one thing I always laugh about Republicans when they talk about reducing food stamps. It’s literally hurting small businesses more than anybody. ON the flip side dems and reducing military - sure why not lets put people on unemployment - won’t hurt anything. I’m simplifying of course the examples but in general hate when people suggest world is black and white when it’s pretty much 100% gray.

Our business benefits a lot from the program but I'm not a huge fan of it, at least in its current form. I deal with food stamp recipients all the time so I have a good grasp of who they are. A lot, and I mean a lot are entitled - 90%+ of my problems at the stores are food stamp recipients. Here are some interactions I deal with: Paying $200 worth of groceries and refusing to pay a mere .30 cents for a reusable bag (not covered by food stamps) - and then asking for delivery and not tipping the delivery driver. Trading their benefits for cash by trying to pay for another customers groceries. Asking to process non-food stamp items prohibited by law manually so food stamps can accept them. Paying for groceries and just leaving them behind for a myriad of reasons - (they don't care because it's not their money.). Not having enough in food stamps and expecting other people to cover the remaining of the purchase. Very common to see customers using more than one food stamps card indicating someone is ineligible aka fraud or there is a surplus. Purchasing groceries with EBT and reselling it to a bodega (small grocery store). My favorite one, theft which is an increasing issue here in NYC - I would say 95% if not more of the people we catch stealing are wielding an EBT card in their pockets (we know because we typically make them pay for it)

The program is so entrenched today that pulling the plug would obviously be disastrous and I do think there are people out there who genuinely do need assistance but the program today should be reformed. It should do a better job of filtering out who really needs help versus who doesn't, better job of detecting fraud and abuse, and a better job of actually lifting people out of poverty and incentivizing them to make more money.

 I knew a guy that drove a 100k car and rich family, somehow he was eligible for food stamps. This guy lives in Minneapolis so maybe it’s local, but he would only buy the top tier steaks with them as a joke. This was 10 years ago so maybe things changed, but I doubt it.

I've seen one guy drive off in a 85k bmw once, I was floored to say the least. A few times I have seen people drive off in the 30k-45k range of vehicles.

Quote from @Michael Wooldridge:

Quote from @Randy Gutierrez:

Quote from @Michael Wooldridge:

Quote from @Randy Gutierrez:

Quote from @Michael Wooldridge:

@James Hamling not the best example because there was a massive Porsche shortage. But I agree 100%. And it’s not so much that people the upper class doesn’t spend disposable income it’s just that they already spend it. To your point lower class lower middle class have much less displayable. Your reasoning is the exact reason I gave the example of food stamps. There are small businesses all across the US that make a good portion of their income off of food stamps. It’s not so much a direct cash infusion to the poor but more to the businesses servicing them.



@Greg H.

Our 2 supermarkets located in NYC see about 19-25% of purchases made with SNAP benefits (EBT Food, EBT Cash, WIC). Pre-pandemic it used to be around 7-15%, a sizeable increase. In theory, if 25% of the business disappeared today we would definitely have to close up shop.

 Case in point. I know a lot of businesses rely on this and in communities people wouldn’t think. 

Which is why I brought this up in the beginning. The simple truth the wealthy buy what they want generally speaking already. There buying habits don’t necessarily change too much as income goes up or  down. Double the income of those making $18k a year or add $10k a year to those making $50k-$60k a year - you better believe they spend it on new toys. 

Truthfully not even sure why it was an argument earlier with some.

I would say one is located in a B neighborhood while the other is in a B+, so yes they are not in low-income areas per say.

Funny you mention, my wife works for one of the top 3 companies in the world and handles marketing for LVMH. She basically said what you said, the only people still buying their products today are the ones that are well off and during the times of stimulus there were crystal clear patterns indicating where and what people were spending their money on. Today those patterns have disappeared.

Not surprised by the first. I avoid politics like the plague but it’s one thing I always laugh about Republicans when they talk about reducing food stamps. It’s literally hurting small businesses more than anybody. ON the flip side dems and reducing military - sure why not lets put people on unemployment - won’t hurt anything. I’m simplifying of course the examples but in general hate when people suggest world is black and white when it’s pretty much 100% gray.

Our business benefits a lot from the program but I'm not a huge fan of it, at least in its current form. I deal with food stamp recipients all the time so I have a good grasp of who they are. A lot, and I mean a lot are entitled - 90%+ of my problems at the stores are food stamp recipients. Here are some interactions I deal with: Paying $200 worth of groceries and refusing to pay a mere .30 cents for a reusable bag (not covered by food stamps) - and then asking for delivery and not tipping the delivery driver. Trading their benefits for cash by trying to pay for another customers groceries. Asking to process non-food stamp items prohibited by law manually so food stamps can accept them. Paying for groceries and just leaving them behind for a myriad of reasons - (they don't care because it's not their money.). Not having enough in food stamps and expecting other people to cover the remaining of the purchase. Very common to see customers using more than one food stamps card indicating someone is ineligible aka fraud or there is a surplus. Purchasing groceries with EBT and reselling it to a bodega (small grocery store). My favorite one, theft which is an increasing issue here in NYC - I would say 95% if not more of the people we catch stealing are wielding an EBT card in their pockets (we know because we typically make them pay for it)

The program is so entrenched today that pulling the plug would obviously be disastrous and I do think there are people out there who genuinely do need assistance but the program today should be reformed. It should do a better job of filtering out who really needs help versus who doesn't, better job of detecting fraud and abuse, and a better job of actually lifting people out of poverty and incentivizing them to make more money.

Quote from @Michael Wooldridge:

Quote from @Randy Gutierrez:

Quote from @Michael Wooldridge:

@James Hamling not the best example because there was a massive Porsche shortage. But I agree 100%. And it’s not so much that people the upper class doesn’t spend disposable income it’s just that they already spend it. To your point lower class lower middle class have much less displayable. Your reasoning is the exact reason I gave the example of food stamps. There are small businesses all across the US that make a good portion of their income off of food stamps. It’s not so much a direct cash infusion to the poor but more to the businesses servicing them.



@Greg H.

Our 2 supermarkets located in NYC see about 19-25% of purchases made with SNAP benefits (EBT Food, EBT Cash, WIC). Pre-pandemic it used to be around 7-15%, a sizeable increase. In theory, if 25% of the business disappeared today we would definitely have to close up shop.

 Case in point. I know a lot of businesses rely on this and in communities people wouldn’t think. 

Which is why I brought this up in the beginning. The simple truth the wealthy buy what they want generally speaking already. There buying habits don’t necessarily change too much as income goes up or  down. Double the income of those making $18k a year or add $10k a year to those making $50k-$60k a year - you better believe they spend it on new toys. 

Truthfully not even sure why it was an argument earlier with some.

I would say one is located in a B neighborhood while the other is in a B+, so yes they are not in low-income areas per say.

Funny you mention, my wife works for one of the top 3 companies in the world and handles marketing for LVMH. She basically said what you said, the only people still buying their products today are the ones that are well off and during the times of stimulus there were crystal clear patterns indicating where and what people were spending their money on. Today those patterns have disappeared.

Quote from @Michael Wooldridge:

@James Hamling not the best example because there was a massive Porsche shortage. But I agree 100%. And it’s not so much that people the upper class doesn’t spend disposable income it’s just that they already spend it. To your point lower class lower middle class have much less displayable. Your reasoning is the exact reason I gave the example of food stamps. There are small businesses all across the US that make a good portion of their income off of food stamps. It’s not so much a direct cash infusion to the poor but more to the businesses servicing them.



@Greg H.

Our 2 supermarkets located in NYC see about 19-25% of purchases made with SNAP benefits (EBT Food, EBT Cash, WIC) depending on the week. Pre-pandemic it used to be around 7-15%, a sizeable increase. In theory, if 25% of the business disappeared today we would definitely have to close up shop.

Quote from @Ryan Friend:

@Randy Gutierrez ohhh ok 2.5-3x their income. Sounds like having credit score above 600 + those income requirements is a good model for tenant success. Wow, started investing peri-pandemic! What made you choose the Allentown area?

A bunch of factors...proximity to NYC, landlord friendly, positive economic factors such as job growth, wage growth, new developments etc. and real estate factors such housing price, price to rent ratio, cap rates etc. 

The only thing with refinancing is I would try to maintain the same timeline and not reset the clock. If you lock in a 30 yr mortgage and by the 10th year interest rates drop by half, try to acquire a 20 yr mortgage at that point. Refinancing is a great tool for investors because that cash is redeployed again to acquire more properties but for your average typical homeowner it's usually a trap. Their timeline is being reset and that cash isn't being deployed to net a return or produce income.

Quote from @Ryan Friend:

@Randy Gutierrez 2.5-3x monthly rent? 

I was on crimegrade yesterday! Is a cool site. The grade of center city was exactly my question! Good to have a “D” reference. Sounds like you know Allentown well. How long have you been investing there? 

 Yes so if rent is $1500 I'm looking for a monthly income of $3,750-$4,500 from the potential candidates. I've been investing since 2020. 

Definitely buy especially if you are thinking long term. I wouldn't be surprised if interest rates hit 10% next year. There are no benefits to renting apart from flexibility and offloading some of the responsibility in regards to maintenance.