All Forum Posts by: Rich Weese

run the other direction! I owned as many as six condos across the bay from Isla for over 30 years. There is not enough paper on BP to give you all the reason to stay away. Let me just start with the first problem. Preconstruction or currently during construction? The developer takes 25% from a lot of different buyers with the promise to deliver a unit. After he over sells the number of properties available,  mysteriously, he runs out of money and requires each buyer to put in additional funds. The construction stops and waits until enough new money is added to the property. My building was originally built to the third floor before construction stopped. It took three years before there was more money available. The   devaluation of the peso happened at the same time which made the money worth even less and required more. It was a nightmare getting it to the finish line.

I'm speaking as someone that was a licensed real estate broker in two states as well as someone that spoke Spanish and was a very successful businessman. Hurricane Gilbert and hurricane Wilma also didn't help. My location was the very best in all Cancun, across from senior frogs and nearly next door to Carlos and Charlie's. Run the other way if you're smart, in my opinion.

Jared and Jessica,

I was happy to receive your board mail also. I'm surprised you didn't get more responses than you did. I appreciate you reminding me that Jessica's father is my nephew Rick! I remember well having discussions with him starting when he was five years old! I'm sure he told you about the time he and his sister were in my Camaro with my soon to be wife and I speeding down a California freeway and I got arrested!! Not a good example for my nephew and niece. 

There are many posters here on bigger pockets that post the same type of information that you did. I always refer to that information as a snapshot in time. It only gives very limited information and doesn't show what is going on outside the range of the picture. I compare that to a video which shows everything in the area as well as the portion of the picture that was the snapshot.

This is the same way as real estate and investing. You have stated only one or two things that are pertinent to your strategy and plans and current status. It is a lot like a snapshot. There are so many other questions that should be considered before anyone gives you their thoughts, suggestions or ideas- like a more complete video.

If you Google my name, it will lead you to a book I wrote about real estate and my contact information.

 Great to hear I have another relative following in my same footsteps and path to real estate riches!!!!

R. Mike Weese

I thought there would be more input and attacks with this subject. I think I'll just let it die. I did almost purchase a retirement home in Summerlin 25 years ago and know how expensive it is and would assume lake Oswego, Oregon is the same thing. I have never invested in the expensive areas such as those.

I know it's working well for you.

Rich

@Jay Hinrichs

Okay, here we go again. I believe we have opposite viewpoints in regard to college and this is going to be another area where we have differing viewpoints.

1. Brain-dead if you rent rather than own. This is not 100% accurate. You would still have that down payment to use for some other purpose: start a new business make a different type of investment etc. The money wouldn't just disappear because it was not used to purchase a home. In many areas and at many different times, it was not advantageous to buy a home and people actually lost money. You are aware of that.

2. I am aware of the turnkey operators in Japan. That still doesn't explain why there are so many vacant homes available for free or nearly free in 10% of Tokyo is vacant. Evidently, the investors are not sold on the prospect for those would not be sitting vacant and increasing annually. I'm not sure I understand whether the 1% rule makes any sense are not in Japan currently. You would still need to materialize prospective tenants out of thin air. They must be living somewhere currently and would create that they can see if they moved into one of the already vacant homes.

3. You will never get an argument from me on the difference between respect of authority in Japan compared to our current situation in the United States.

I have no problem with the current investment atmosphere but if we continue to suffer many of the same foreign problems and increase those problems with reduction of tax write off or exceedingly high values of homes, I don't see it getting fixed.

Rich

@Jay Hinrichs

It seems like many of those Uber millennial's not only don't want to own a car but do not want to own a house either. They seem to prefer the freedom of movement with as few attachments as possible. There is also no corner store, corner pub or local hardware store or any of the other places we used to frequent and our kids got their first jobs. Now much of that is being replaced by AI with more to come in the near future. I personally see an oversupply of property and under supply of qualified buyers.

@Ricardo Lopez

I think your arrows were very well pointed! Here are some thoughts point by point of your five points.

1. Maybe this is an area thing. I have bought and sold a lot of real estate and I have not seen a great deal of millennial's interested in buying a home. I have not seen the large change that you have.

2. I think the reason more single individuals are pursuing homeownership is because there are so many single individuals. In my younger days, it was get a job or go to college and get a degree, find a woman to marry and buy a house and start a family. I'm not sure those are the norm today.

3. I'll bet you know many more people whose kids have fewer children than the parents then vice versa. I agree it varies in cultural/ethnic groups as I am a member of one of the largest providers. ( Mormon or LDS)

4. Excellent point and many of those immigrants believe in larger families.

5. The study I read about Japan showed the the older people were no longer living in their houses. I live in the number one retirement community in the world (The Villages) with over 125,000 retirees making it their home. However, I have not seen a study recently of how many of those are living in care centers and other types of housing for older population. I can assure you there is tons of that type of housing being built within our area.

I appreciated your arrows and feel they were explained very well and all are Extremely relevant.

I have been involved in real estate for nearly 50 years and have always been very positive about the future. I started at a very young age buying real estate and investing in more and more as decades went by. If I was young and starting out today, I would not have the same positive outlook that I had previously. Still heavily invested in real estate and not acquiring more at the present time for various reasons.

I hope I'm wrong for the future sake of generations to come but here is my reasoning currently. Please feel free to join in the discussion and state your arguments as to why I am wrong.

1. It was very easy to purchase real estate when I was young especially using FHA and VA methods. These homes were also fully assumable and led to easy transfer ability for residents and investors. That has changed considerably now.

2. Young people were going to college for degrees and graduating with unlimited opportunities for job placement. They were also graduating for the most part with no debt, making a payment for a home mortgage much easier. That has also changed now removing many buyers from the pool of potential homeowners or investors. Financial institutions and government regulations have also made acquiring multiple homes more difficult. It was easy for me to acquire tens of homes and then hundreds of homes but now that would be nearly impossible. It also seemed much easier to find a starting job position with ability to grow in that trade or occupation. Much of that has now been replaced or will be replaced by AI.

3. Young people were also getting married with the possibility of both people working and qualifying for a mortgage at still relatively low price real estate. That has also changed now, with a large percentage of occupants being a single individual and also waiting longer to have children or deciding not to have children at all. I have six children and the most any of them have is three. ( see next item)

4. Re- population rate has continued to drop. Due to infant mortality, the necessary reproduction rate to replace the population is 2.08. The United States rate has continued to drop and is currently at 1.73. It doesn't take high education math to determine there will be a surplus of properties available to live in with this continuation in population reduction. Just take a look at Japan. There are now 8.5 million vacant homes in Japan and more than one in 10 vacant in the city of Tokyo. A simple Google search will show there are actually homes being given away for free in live in condition. Their birth rate has dropped to 1.44 over the past several decades and that is compounding their problem exponentially.

5. Rental rates may be less than paying your own mortgage now. Rather than just comparing the rent to the mortgage, it becomes necessary to add property taxes, insurance, maintenance, landscaping etc. The renter does not have these expenses to add to the rental rate and it is much easier to qualify for as a single individual or to share a home without major qualification necessary.

I'm sure I am leaving out many additional items that should be of concern. I have not even discussed the extreme increase in prices to purchase or construct a home with no stop in sight.

I'm well aware this is an investment site with tremendous interest in the real estate area. I'm probably one of the older posters on bigger pockets and have seen many ups and downs and changes in particular areas. I have lived in seven different states and have purchased real estate in even more that I guess I am just suggesting caution currently. As the government runs out of options for tax seen the population, the mortgage interest deduction will be looked at more and more seriously. If you did not have that deduction, would you still purchase real estate investment property?

Bring on the discussion and shoot your arrows!

Rich Weese

I spoke at the convention in Denver but I don't think they had podcasts way back in the dark ages.

@Joe Splitrock

I moved to heaven (The Villages, Florida) a few years ago to basically retire. There are over 3000 clubs and organizations – one for every interest you could possibly have! I was regularly playing softball (240 teams with try-outs required), pickle ball, and golf. I didn't spend much time posting on bigger pockets or even paying attention to it. After having a stroke, I started having dizziness and that made it difficult to go down for a ground ball or a low return in pickle ball. I find I have more time now to check various websites and travel. It is always interesting to see the new group of posters on bigger pockets – many who think they already know everything but have yet to do anything! I still have trouble managing all the changes on the website. I will never be a big techie.

Do you really live in South Dakota or are you a fake resident? I was a fake South Dakota resident for 10 years. My wife and I were full time RVers and could claim domicile anywhere we wanted. South Dakota loves RVers and only requires one night residency (Hotel) every five years when it is time to renew your driver's license. I just needed to take them the hotel receipt and I was South Dakotan for an additional five years. No state income tax, cheap auto and medical insurance and other benefits.

Other than slowing down, I guess I'm doing fine for middle age! We just returned from our 56th cruise up the coast of Norway on what they call the mail boat. It was fantastic and did 66 ports in 12 days. The winter excursions I took were truly one-of-a-kind.

Good luck always.

Rich Weese

Texas! With the particulars that you mentioned ( cash flow etc.) you will have a very difficult time in California. It is also questionable what the bureaucracy will bring to the investor next. It is not a positive business growth area and I've lived in many of those cities. Many of your replies were from real estate sales people or property management people in the areas they were touting. They would be the best at knowing what is going on there, but also may have some ulterior motive......

@Joe Splitrock

I would never say college degrees are less valuable because more and more people have them. I would argue that the value you are receiving with your degree may depend on which degree you are obtaining. It is too easy at this period of time to earn a degree in a field that may have completely changed by the time you earn the degree or is no longer as valuable as when you started your education in that field.

I agree that someone with a college degree has a better chance at getting a job with your fortune 200 company. I have always felt that college does a very good job of teaching someone the skills they need to go to work for someone else.

I think we have been in a previous thread taking the same viewpoints that we are taking in this one. We are both speaking from a position of experience that generated the beliefs that we have now. I'm sure I would have been successful in a career based on international law if I had stuck with it. It would be impossible to determine whether that would have given me a more successful result since the definition of success varies from person to person.

I'm less a fan of college today than I was 40 years ago due to the cost and the number of degree holders that were not able to enter the field they had so diligently pursued for one reason or another. I realize that real estate may be cyclical but so are job opportunities at companies when the economy is on the downtrend. We have both seen that problem also with companies downsizing or disappearing.

I think it is great for Alan to receive different viewpoints and make his own decision. There are a lot of additional things he mentioned that I think are important to his decision. He is still young, single, with his entire life ahead of him. That is enough time to try a field like real estate and possibly find success. I was one that did exactly that and my history is on bigger pockets in different threads from years ago.

Good luck Allan.