All Forum Posts by: Trevor Ewen

@Martin Scherer

I see the kind of exuberance you are talking about in urban and coastal areas. I haven't seen that kind of growth in less fashionable suburbs and sprawl markets.

As a resident of the most hyped urban region, I see people trying to hold onto a dream of ownership that encompasses their love for an area. It's true that NYC and San Francisco are vibrant places to live. Former suburban dwelling millenials and empty nesters alike are finding the lifestyle in these areas very fun and desirable.

Furthermore, the housing policies in these regions necessarily constrain stock (article from The Atlantic), so real estate is traded more like a precious metal than something manufactured. 

Eventually the economic realities catch up and this market deflates, but there are still steady, consistent medium/suburban markets where the hype is not too crazy. Make sure you own a few places in these markets when couples living a $1m two-bedroom units in San Francisco decide to have their second+ child. 

@Martin Sterling

Really enjoyed this one, not specifically about notes, but owner financing is a big topic, and goes into the psychology of the investor: Investing in Fixer-Uppers - Jay Decima

I'm with @Alexander Felice on this one. The rental option seems good for an asset that's not burning a hole in your pocket. It would be good to get started learning to be a landlord and manage property.

If you find that you have many vacancies, and the property is losing year over year, you then know you should take the sell option. If, on the other hand, you can make the money, you will learn a great deal and hold on till a better day.

@Luis Moreno

You live in a high-priced area, much like myself. In that case, I definitely recommend investing outside of your area.

I would be very careful about the hands-on degree of your purchase. 20-30k in any market will certainly require a bit of work. If you cannot trust your team, you will be left with a half finished liability. Pay for decent contractors and decent management, if you can't find that, no deal will sing.

@James Post

It is undoubtedly a ridiculous market at the moment. Rents have risen, but when you look at rent / value ratios, I still don't like what I see. New York is in a very fashionable stage right now, and that is a scenario that inevitably creates competition from owner-occupants.

After putting in an offer in the Bronx last year, we realized we had serious trouble beating the owner occupant crowd. They can always afford an extra $20,000 for the 'Perfect Home' or their 'Favorite Neighborhood.' As investors, that ship won't sail.

There are deals within the 90 minute range. Parts of NJ are still doable, and central CT has some good opportunities as well. 

One thing I do like to think (as a salary worker and business owner in NYC): Taking money made in the high-wage & high-cost-of-living market like NYC, and then moving it out to the (lower cost) midwest or sun belt is a classic form of arbitrage. It's injecting value right back into the hard earned currency of the east coast. That may not give you huge respite, but it's a time honored way to invest throughout all asset classes. 

If nothing else, the landlord laws are way better just about everywhere else.

@Stephen Brown

You are in an enviable position for many starting out on the forums. We have a saying in my business (Software Consulting): The amount of money you make sets the bar you must exceed. If you take a lower percentage, you'll have much more room for error. I would not take a 50/50 deal in your bosses position. Even the experienced fundraisers I know do 60/40 with the investors on the high side. I say go a little lower, but give yourself to learn and fail at a few things. 

Good luck.

@Account Closed

Has got the right idea, i.e. Price is what you pay, value is what you get.

@Andriana Babikian

In my life, my mentors have come from completely personal relationships that turned into some professional mentoring. My Uncle has been my tech mentor for my entire life. My best friend from high-school is a personal mentor. A good friend's father-in-law recently became a casual business mentor. 

These things really happened/mattered because I had another relationship with these folks. In that sense, the only thing I brought to the table was our mutual friendship. This is the way I would have it. "Don't have anyone who knows about REI?", I imagine you do and haven't thought about it, maybe in years.

@Nick Noon

Our perception is always colored so heavily by where we live. 

As for NYC, there is definitely an urban hype going on that is a little shocking at times. When it happens in areas like Dallas or Portland (areas that you can argue were under-valued before 2008) it makes a bit more sense, but New York has never been known for being cheap.

I do think low interest rates are contributing to a great deal of investor activity. Investors love multi-families for the obvious reasons, so I think there is a lot of competition. The US rental market is really dense right now, so I don't think owner occupants are in the market quite as much as they were in the past.

@Kevin Bynum

You can find financing for numbers like that, although typically it's a lender who works with a lot of 'fill-and-kill' type investments. You typically want a nice match, I would look into a credit union (in the area) or something along those lines. They have an interest in the community, and want to help out local occupants, landlords, and investors. 

My lender in NYC, for instance, will not touch anything under $200,000. It's not because he's too good for it (he actually encourages me to buy in the Midwest). It's just that he can take calls from $1,000,000+ buyers on a regular basis.

Keep in mind any repair cost(s) you may have for that low of a price, because that money definitely has to come from somewhere as well. Best of luck.