All Forum Posts by: Tom V.

Adding a patio seems like a waste of money. I would put it this way - can you search your local Craigslist ads and see that homes with patios rent for more than homes without them? If so, great, if not, why bother.

Why are you renting and not selling?

Market is better than it was 18 months ago, no?

@Justin Williams My question was, with flip margins compressing, at what point will you put your business in neutral and take some chips off the table? Would you do a 7% projected profit flip? A 5%? For my own investments I am considering about how to be thoughtful about investing in a changing market.

@Bryan L. - I agree - an investor herself will probably be the best tenant she ever has!

That argument even carries across investment categories. I am sometimes reminded that Peter Lynch who became famous for guiding Fidelity's Magellan fund during its heyday advocated that each investor own his own home before starting to invest in stocks.

If old white guys in tweed jackets are too dry, then at least younger participants can consider the wisdom of Jay Z's classic line, "I'm not a businessman, I'm a business, man." What does that mean? Each one of us is the keeper of his own balance sheet and income statement. Why not be our own best customers with AAA ratings? Save your money(!)

Microsoft Visio is the the standard project management software I have seen for projects beyond Excel.

Contact the local planning department with related questions.Souns like the obvious path is to rent out the house after fixing it. How does the lot compare to neighboring lot sizes?

@Jessica Sorensen I think if you want cashflow and you have great vision and remodeling skills then take a look at Oak Park/Tahoe Park. Still some beautiful old craftsman and victorian homes there that need love and have great bones at lower prices. Stay close to the Medical Center or near the Broadway Triangle.

Good Luck!

Please don't buy real estate, that is, unless you are really sure what you and your market are doing.

Yes, yes, you have to take the plunge and do it at some point in order to learn.

Yes there are plenty of naysayers who tell you not to buy, and you need to ignore some amount of that message. But pessimism and pragmatism are different things. Here are a few points:

The Cycle

Real Estate prices, like those of other asset classes (Stocks Bonds Commodities) move in reaction to economic trends and conditions. Often, the best time to buy those assets is when no one else is doing so. That was the case for much of 2008-2012 in the United States. Things have changed in many markets (disclosure: in my markets in Northern California prices have changed a lot and are back above peak in some cases).

In my sampling of experts and podcast guests, it seems like there are a lot of guys (aren't they mostly guys?) who began investing in the past 5 years. Again, disclosure - I started investing in real estate in the past 5 years(!) Nearly everyone of those people has met with success. And while each person worked hard and took risk, a big part of the investment success of each individual has to do with the upswing of the overall market. Whether you were buying-and-holding or flipping, a rising market was lifting all boats.

If you took the same money invested and put it in an equity mutual fund, you would have also made very good money. Because the mutual fund managers were so smart? Not really. Because the whole market was going up.

Where is your local market?

We went through a balance sheet contraction recession where weak borrowers were (and continue to be) separated from their assets. Entities in control of those assets (banks, lenders) wanted to dispose of them at the same time that they were not really lending to people. An abundance of “forced sellers” drove prices lower while credit markets were frozen.

This background of selling meant that you could basically buy almost anything between 2008 and 2012 and you would be sitting on a nice profit today. But a lot of that forced-seller/few-buyer imbalance has been squeezed out of markets. Your market may be different and prices may still be at very depressed levels. That’s great for you as a potential investor. But please keep in mind that the successes experienced by many of the heralded recent ‘experts’ here have a lot to do with the timing of the market cycle.

It can still work

Absolutely pockets of value still exist. Interest rates are low by historical standards, and we have had a whole generation of people remain as renters (delay household formation) for much longer than similar age-group people have done in the past. There is some pent-up demand. But know your house (investment), your neighborhood (local market) and broader area. Are you getting a good deal in a rising market? Or are you being handed a so-so deal with a low cap rate, or a fixer for which you have had to bid against 40 other buyers?

I am working on ways to take chips off the table and to take less Real Estate risk. Let's be careful out there.

Here's the trick - sign up with whomever you want and like, because you are apt to be paying them. At least, that was my experience going through the same process. The brokerage agency gets a cut of your commissions and you may well have to pay them a 'desk fee' or similar for facilities and to pay for errors and omissions insurance. They won't pay you to start out.

I suggest you call several and try to set up informational interviews. If you present yourself thoughtfully, most people will give you 20 minutes, especially if you could produce income for them later on. Figure out what sounds best for you. They will take you more seriously if you wait until after you have passed your classes and exams and received your license.

Good luck with the pipeline!

If you want to do it yourself, consider a thoughtful Craigslist ad. What is cool about the space? Take good pictures - should be your bag(!)

Come across as a thoughtful landlord looking for a partner - other creative types?

The fallback would be to hire a commercial re broker, but they will take a piece of the total lease value.

A cancellation agreement covers the title company's rear regarding escrow and return of your funds. You should complete a cancellation agreement and ask the seller to sign it. You have to jump through the hoops.