All Forum Posts by: Sam Josh

@Diane G.

How are you coming up with the income part of that ratio? Yes there are published figures for 'average' income but we have no idea about the buying power of the people purchasing these $2M homes. Actually Few reasons why 'average' income wont be an applicable stat here. First, majority of the buyers are likely not first time home buyers. They are perhaps rolling over equity from sale of the first home into the new home, and that means a significant down payment. Second, the average income argument goes out of the window quickly given that there are many 2 income families who are buying these homes and in most cases both incomes are at the higher end of the average or above average. While I don't disagree that there will be a downturn, Its not going to be easy to time it and even if it happened, I would venture to say the impact on home prices will not be anywhere close to what we saw in 2008. The best indicator for where this is all going will come at the first month of every quarter when CEO's of major tech companies announce their earnings and give forward guidance. So when major tech companies all in succession start to give poor guidance, we will know the economy is turning for the worse.

Lotto is a very big word :) Congrats.

Diane, not all Recessions in history have killed house prices. I think that is where you are very very consistently missing the point. The recession we saw in 2008 was one of a kind. It was unique in that it was related to housing, overwhelming mortgage debt, very lose credit standards and low regulation on banks when it came to liquidity standards. Also it was not just a recession. It was the “Great Recession”, the worst economic crisis since 1939, accounting got a gap of nearly 50 years between the two events. So it was a housing led recession. The prior one in 2001, was due to speculative investments in dot com companies and eventually compounded by the 9-11 attack’s. This one had a “flirting” impact on home values. The one prior was in 1992, caused by the economic cycle (lasted only 8 months) and lingering effects of the first gulf war and problems with savings and loan institutions. Second, let’s take someone who bought in Sunnyvale in 2015 or even 2016, their homes are already up 20%. So even if they fall 20% in value, they are only back to break even. So not everyone is going to lose their shirts. So while I agree a recession will “eventually” happen, to think that it will have the same impact on home prices like it did in the last recession is likely not correct. I thus don’t think there will be very many buying opportunities even in the next recession. Not like how we had in the Great Recession.

A townhome in SV sold for 1.7M. I know this area quite well and during the downturn you could not sell these for 650k. Put it differently over the 10 years, appreciation has been 1M or nearly 80k per year.

Curious about Dayton as well. I’d love thoughts on whats driving it to be a good investment hub?

Hi Maura, I am a California resident and landlord/investor, I get to Paris often for work. Generally How is the RE appreciation in Paris as well as rental market? Also how easy would it be to exit investments (sell) in a few years or would it be best to think of a long term buy and hold?

Do any of the folks here have experience using docusign for tenant lease agreements? What are the pros and cons of doing so?

Welcome to BP. I have a finance background myself and have worked in ibanking in the past and now in tech for the last many years. Trust me your analysis is not a waste of time. But it’s best to start the buying hustle as well. Get out, checkout properties, talk to bankers etc. The analysis will help you challenge anyone who is trying to sell you stuff they think they can but stuff you don’t want. The realtors, bankers and others I have worked with in the past have only appreciated the informed and researched perspectives I have brought to the table as we have done deals.

Some rental pricing is out of whack. The condos next to Apple or many of the new condos in SF (SOMA and Mission Bay), but they adjust price quickly and come down to normal levels. It is not abnormal to try and list higher and hope for a buyer.

I have done a deal in the past with negative cash flow. It was $300 per month. The drivers were, potential appreciation, A+ location and a place to give my kids once they grow up. Plus other properties of mine were cash flowing well, so as a RE portfolio, I was doing ok. I was in due course able to raise rent and breakeven and the property had since appreciated.So worked out well given those priorities. So it depends on why you are buying and what your priorities are. How confident you are in the appreciation of values etc.