All Forum Posts by: Scott Trench

Two more notes: 

1) Citing this fact (generally increasing prosperity in almost every area of life for Americans over any long period of time) is generally unpopular. So, I will probably stop mentioning it. Though, you will be foolish to bet against it.

2) I do not believe the American dream is a house, two cars, 2.5 kids, and a dog anymore. 

I believe that the new American dream is FIRE. 

Americans ARE wealthier today than in the past. They earn more relative to inflation, even at the median and lowest levels, than they did in the past. And, numerous areas of life are cheaper and higher quality than they would have been for our baby boomer, or Gen X counterparts. When one zooms FAR out, the change is absolutely staggering.

But, millennials are also having a rough go of it when it comes to homebuying, and more and more of them are choosing not to, or are simply unable to, have children. As you point out. And, there is a lot more social stratification. While this generally has the benefit of pushing more and more people into the "upper class", it also has increased the total number of people, and percentage of people, in the "lower class" (though, all "classes" earn much more, relative to inflation, in real terms, than they did at the outset of the study). 

For those interested in learning more about why it is so hard for most people to conceive of the incredible pace and march of progress in almost every conceivable area of human life that we can measure for, I encourage you to check out Factfulness and Enlightenment Now.

Obviously, not everyone is benefitting proportionately, or at all, from the march of "progress" as we define it in Western Civilization. But, the numbers, if you can believe them (depends on your political lean these days, I guess!), tell a clear story of ever increasing prosperity among Americans, on average (or on median). 

Thanks, Eric - it's really hard to tell someone how to invest, as it depends on a ton of factors. 

One useful tool for OP might be this: 

Imagine I handed you "enough" money to meet all your financial goals. The midpoint for "enough" for BP Money listeners is $2.5M, for example. Suppose I handed you that $2.5M in cash, right now. 

What kind of portfolio would you build? 

This is not an instant reaction answer for most. Most people need to sit on this for a while, go over it with their spouse, and really commit it to paper and long-term thinking. 

But, from there, we can begin to get very clear about answering questions like "what should I invest in?" and "What should I do with this large pile of cash I recently came into?" 

The answer will be clear: 

- If far away from your goal (less than 80% of the way - if the goal is $2.5M, and you have less than $2M, for example), then invest essentially all cash in the "aggressive" portion of the portfolio. Tweak this a little bit if you are nearing traditional retirement and need it to be more of a sliding scale. 

- If you are close to your goal - 80% or less than 5 years, then it's time to add most/all additional cash to the diversification positions of the portfolio. 

Tying this together - if my goal were a $2.5M portfolio by age 40 consisting of the following: 

- $1.5M in a conservative retirement portfolio allowing me the ability to withdraw 5% ($75K per year)

- $1.0M in two paid off rentals generating $50K per year in conservative approximation of cash flow

Then, I would probably be buying the two rentals early in the journey, and committing all other cash to the stock portfolio until I rounded out the $2M mark - at which point I'd consider layering in the conservative pieces of the portfolio, and then paying down the debt on the rentals. 

This is obviously a quick response, there's more to it, but should be a helpful framework to get going.

 This is a good question for BiggerPockets CEO @Ale Ayestarán - could be something for us to consider! 

I think that there are many products that are "useful" in terms of filtering properties that may be good candidates. 

But, the beauty of this business, is that it comes down to you developing this skill in a given niche. 

At the end of the day, when I gear up to buy a property, I look at basically everything that has sold in the nearby area, I look at a lot of comparable rentals, I make a qualitative assessment of the condition and location of the property against everything else, and I peg a value on it. Most of the time, I don't bother lowballing people. I offer once, at what I believe to be a fair price, and almost always win the deal, as I don't chase hot properties in bidding wars. 

It's like taking a job offer - you'd know, within a few percentage points, what the maximum salary for a role you want is. Or you should. But, there's no real shortcut to figuring it out, and if you are patient and deliberate enough, you can find the golden opportunity.

I'm not sure what is going on there, @V.G Jason, but maybe @Rene Hosman can help us out? 

It's been about a year. Here's how this played out in Austin: 

I think now is potentially go time in Austin, here in summer/fall/winter 2025. The data is not showing home prices getting crushed, but I'd be ready to bet pretty big that in income property (2-4 units or larger multifamily) are in fact seeing huge drops. I bet you will find properties that have been sitting for a year or more, with multiple price cuts, in many sections of the city that fit the income property description. 

I think that if I lived an invested in Austin, I'd be chomping at the bit. The competition and onslaught of new supply is likely just about to finish, and I could see rent growth jumping pretty meaningfully from it's current, depressed state, over the next two years.

Oh, and believe me, I spent much of the last 2-3 years talking about how terrible Austin, TX was going to be as a market. I am no perma bull on Austin, TX real estate and certainly did not make many friends among agents and investors in Austin these last few years. 

But, a growing market like Austin probably won't fall forever. I think the tides have turned, and it will be worth seriouly exploring hypotheses now through early next year. 

If I was trying to "time it perfectly", I like to go under contract after Thanksgiving, but before Christmas. This will lead to a closing date in early to mid January, which is the typical seasonal low for most markets around the country. Not sure if that is specifically true in Austin's case. 

As an outsider, I don't really know, but it's really hard for me to envision it being a bad time to invest in Austin, TX real estate if you know what you are doing. 

It's got to be a deep buyer's market, especially for investment property, with a lot of jaded investors exiting deals and just trying to get something back, if anything. 

Again, I don't know, but I imagine that there are expired listings, price drops, and sellers willing to take lowball offers all over the place.

That's how it is in Denver, it seems. I'm more active right now than I have ever been, and will buy more real estate in 2025 than I have in my entire rest of my career combined. I bought a property in January that dropped price 6 times over nearly 18 months. I'm under contract on a property that was first listed at $875K last year for $630K. 

If now is not the time to buy, when will it be? What's a "Crash"? What's the bottom? 

Maybe I buy right now and prices crater. But, if it's not the bottom and about to crash, it's certainly no longer the top. 

I'm taking my chances now, personally.

It's just sad in a lot of ways. 

I am fortunate to have the means, and to have prepared for a long time to purchase a house at this point in my life in the area we want to raise a family. 

This area, Highlands Ranch, CO, is known for being family friendly. Good schools, very safe, well maintained, with an HOA that, in my view, does a fantastic job keeping things fun, organized, and reasonable from a cost to benefit ratio. 

It's really sad, however, that a good number of folks here are empty nesters, who I believe would ordinarily move out and downsize, but can't or won't, because of their low interest rate.

These homes that would be best occupied by families, just getting started. But, instead, they are occupied by people in their late 50s, who surely would rather be at the beach, in the mountains, or in the city (someplace where happy hour does not BEGIN at 8:00 PM on weekdays...).

The lock in effect is having major negative consequences for my generation. I am one of the lucky few to have the means to overcome it.