All Forum Posts by: Tom Kastorff

Glen I think this paragraph is where you get hung up - "12 months down the road... plus has 12 months of rental income" 

That is pretty generous and positive thinking right there. OP is considering trading into a higher end property in PS - as many have noted, especially the last response from the attorney, it is a bad time to own a rental in that town. It is uncertain when they will reopen STR's. Even if they re-opened tomorrow, you need to get a listing active, get eyeballs, get bookings, then income typically trails after that from fees or your PM. OP could be underwater anywhere from 1-12 months in this scenario. She has not made it clear that she has any cash or reserve funds (that I have seen, not many responses from her) to carry during this time, merely that she has $400k in equity to roll forward. She has to be careful with what move she makes. In a perfect world I agree with your statements, but this is a very uncertain time right now to own rentals, especially in supremely regulated vacation towns like PS/Riverside.

I live in this area. Don't know a single person supporting this nor have I heard rumors of such a movement. What friends are these and where do they live? In fact if you turn on the news there is coverage of protesters organizing 400+ person walk-outs to open things up and let us free claiming 2nd amendment and all that. Not sure where your info is coming from. 

To my earlier posts - yes I am a buyer in the upper range, potentially to live not rent. I imagine the upper ranges are hit the hardest - the pit boss and folks making six figures for years on the strip who are now out of a job and get no stimulus bonus and unemployment doesn't come near matching their income. That tier will struggle. Who will buy those homes now? I haven't seen a single one sold, while several of you have confirmed that there are still deals happening at $300k. 

As noted earlier, I fully understand NV is cheaper, any modern investor knows that, don't need wild Bill to tell me. Nevada tourism board has been advertising in our papers for a decade.  But also as noted, nearly anyone making $15+ an hour dual income can afford that, the Costco guy the Amazon worker the airport mechanic. Even if they lose their jobs, the stimulus bonus and higher unemployment checks will more than cover. The average restaurant server in my hood is making far more from unemployment right now than they normally would on a Friday night. How many of those folks will really need to sell? Maybe if this drags out for months and months and the gov ends the stimulus payments, but I doubt that. 

It will be interesting how this shakes out for the Strip returning to business and how RE shakes out at all tiers... 

Thanks Fay. I'm a sales guy, I can be blunt. But that is what you need in RE. There are literally 1000s of ways "to do real estate" so one has to be specific often to get helpful responses. I am still not sure what the OP wants us to help him with, he didn't even list a budget or target purchase price. 

@Cindy OBrien welcome neighbor (I am across mission bay)

Dan's replies are always spot on, and I would adhere to what he says. Coastal properties will hold value - God only created so many 70 degree beach towns, period. You can't enjoy a cocktail up top of Shore Club while listening to a DJ staring at the Pacific beach sunset ... from Ohio. Most of the folks that can afford to buy in PB / MB / LJ and so on can probably weather the COVID storm, but that could change if this drags out, folks lose their jobs, and STR owners are dying on the vine and need to get out. If inventory stays low then prices won't drop too much. But it doesn't mean there won't be a desperate seller or three once crap really hits the fan (every 1st of the month that lockdown passes, folks aren't paying rents or mortgages and so on, debts pile up, foreclosures start to become reality). You just have to be ready to jump before someone else does. No property goes unnoticed around here. As a local, I am bullish on RE here for short and long term, my family personally has made tons over the decades, so this is first hand knowledge. I own my residence, but don't invest otherwise here, prefer OOS or CA vacation towns (think ski, pool-desert).

To look at historical home values, or comps, you can use Zillow to do so up to 10 years ago, I believe. A good agent should also be able to do this for you, frankly, that is what you pay them for (their 3% buyers commission). Make them work for you. I am not sure any dataset can bo back to '08 though, might be tougher (>10yrs).

You are smart to educate, seek advice, and WAIT. IMO only two logical things can happen over the next 6+ months: things stagnate / move little, or go down (depending on how long this COVID / quarantine lasts, which I think will be 6-18 months in some form of social distancing and reduced group activities). As you said, none of us have a crystal ball, but it is unlikely prices go up anytime soon barring a miracle. Many folks on here preach DONT WAIT INVEST NOW GET YOUR FEET WET, but patience is a virtue. I had some "deals" in front of me in two short term rental markets in Jan/Feb and boy am I glad I did not jump on them! They will be at least 20% cheaper to buy or more in the coming months. (not that coastal SD will go this way, but just an example of waiting). I would also be losing my shorts, like Dan, as all STR's are essentially shut down in CA through May 31, meaning we are bleeding money in that market.

Be patient! It will pay off. Good luck.

@Cindy OBrien

@Jeremy Tews 

* wife and I are looking to purchase property in California
* fully expecting prices to fall within the next year [based on what? most of Socal, especially coastal, should hold pretty strong. God only created so many 70 degree weather beach towns]
* I'm on board with what everyone here keeps saying about thinking long-term [what exactly do you mean by this?]
* We currently live in California (southern California) and are considering moving to Menifee or thereabouts [as Richard noted, very competitive place to buy]
* Not at all tied to California specifically and willing to entertain other states (esp within a few states from us) that have solid services and you think are likely to grow substantially. [need to be more specific, you could name 100s of towns by this generic wording, you want us to do your homework for you? you mention nothing about size of home, your budget, type of home, what solid services you require, desert vs coast, etc etc]
* We're a little wary of California's great investment opportunities as the market seems inflated and the percentages seem lower [what does this mean? wary of what? what percentages are lower and lower than what?]
* money will most likely be tight and if it were a solid 4-plex in California there is no way we'd have 20% but obviously the 3.5 is more manageable. [have you done research on what a fourplex costs in CA? I have no idea what it might cost in Menifee but in SD/LA it would be over $1M in any half decent area. going in at 3.5% down would be a huge PITI payment with PMI and annual capex/maintenance costs]
* distance rental property in removed states etc.[everything you wrote above is about buying a home to live in, in Menifee, what exactly did this comment relate to?]

I listed some bullet point quotes above of your details in your words, in parenthesis some questions. You are all over the place. I suggest responding to the above with some thoughtful, specific, details so we can try to help you. As it stands, I honestly have no idea what you created the thread to have folks respond with. You basically at the core wrote you live in CA today and want to purchase property in CA. Then a myriad of conflicting and unclear datapoints. So you want to buy a SFH or MF in Menifee? Ok, go do it? Rethink and formulate exactly what you are asking the forum members to help you with.

This is meant to be constructive. So many newbies come on here with vague details when this is a business with incredible variables and options that require specifics to get anywhere. We are here to help you narrow down, but we will not do your homework for you. There are 100000s of threads on BP to help with that, books, webinars, etc.

@Phillip Dwyer That is fair, I suppose we are all driven by specific goals and ideas, and I have specifically been looking at Summerlin homes. Fully realize that is a subset of the market, so point taken and I redact any harshness to my commentary. Appreciate your feedback. 

Appreciate the additional data points @Phillip Dwyer. I would be curious what level Jay's daughters listings were at. IMO, $300k listings sure are nice (as a salesperson who needs deals and revenue), but is a $1400 PITI customer really indicative of anything in the current market turbulence? Two people working at Costco for $18/hr can afford that mortgage, so that really tells us nothing about the broader Vegas market and affects the Strip closure will have on RE. I am no expert on RE in the area, just speculating, and @Guy Bouchard's responses pretty much speak to this. How will the strip staying closed affect the $500k - $1.5M range - the pit boss making $200k+ or the Omnia / Wet Republic bartender making $200k cash in tips and all the related workers who have been balling out the last few years, now being dead in the water. Again, IMO, that is what this thread is about. Not the $1400 mortgages, honestly, those are dime a dozen, any essential worker in LV can afford to buy that yesterday, tells us little. Obviously the answer(s) probably won't play out for a while, but if we could hear from high end dollar value RE agents (or prop managers with $4000-5000+/mo rentals), that would tell us more. As I noted above, I have been monitoring the higher limits for a while, have a dozen or two props earmarked on Zillow, and not a single one has moved an inch. Time will tell ...

@Guy anything new in the rumor mill?

Agree with @Dan H.. Homes that have been on the market, are stagnating or dropping. But inventory is low. My neighborhood moves quickly, and the only props sitting are really high end. I am a local but not a local investor, I am looking OOS or in CA vacation towns, and I am hoarding cash and waiting. Probably at least a few months, as this will take a while to really shake out. And as Dan mentioned, do you really want to try and acquire a prop right now and find a renter or STR with COVID mess? Too much risk. Patience will pay off.

Thanks Jay. I've been in contact with her, thanks again. I guess my question is - wrote 2 deals on what? $200k starter homes or $1M Toll Bros new builds? Are they in escrow? Did they close? I've been tracking at least a dozen homes in/around Summerlin the last 30-45 days and not a single one has even gone pending/escrow never the less closed/sold. Market has frozen, at least on the higher end above $700k. Context would be helpful to understand what she is seeing as an active agent in this region. 

And gambling / partying is literally what keeps the strip going. If they cannot reopen much of it, most jobs won't return, most revenue won't return. I would love to go blow a few grand right now (and had July guys trip planned) but there is no chance to do so for months, maybe not until next summer (assuming pools and clubs reopen in 12 mos). I have no clue why I would ever go back to Vegas if the "entire scene" didn't return. You can gamble almost anywhere now in CA, and same with high end restaurants. It will be interesting to see how this plays out indeed. 

Get what you're saying @Jay Hinrichs, but I am in two of the major target markets for this statement:

"I think it was mentioned above that 60% of tourist coming to Vegas Drive in from CA UT ID AZ and other states. ??? I think i heard that somewhere .. And conventions are being booked for the fall.. I see that on TV right now."

I can drive to LV (but only fly, no one wants to drive 4 hours each way to vegas to party, the drive home is brutal).

I am in tech, and I can tell you no one is going to plan conventions there anytime soon. What conventions did you see mentioned on TV?

Let's see what happens with AWS re:Invent 2020 - if that returns to the Venetian end of year, then there is hope. If they pull out, bad sign.

Ditto CES next Q1'21. Don't see how they're shoving 100s of 1000s into the halls 9 months from now.

I have been going to LV for 20+ years to gamble and party. That is in peril.

• How can you play craps 30 people deep now?

• How can you play proper NL holdem poker 9 people at a table now?

• How can you party inside - no way Omnia or Hakkasan reopen with 4000 raging partiers anytime soon

• How can you party outside - no way Wet Republic or Encore Beach reopen with 4000 half naked ragers anytime soon

Most of the $$$$$ - partiers, bachelor or bachelorette parties, are toast for a while. You may still get some high rollers, but who wants to gamble at empty tables? It won't be enough to keep any of these places afloat or many of the jobs in the fold.

Everything that @Guy Bouchard has said makes sense. There is a long road to get LV back to any normalcy. This will have ripple affects across LV RE for a long time.