All Forum Posts by: V.G Jason

And how quickly, if at all, do we do decelerate it? Those things are going to make hard assets boom.

I think rates being high stay till top of 2024, start decelerating mid 2024 at this current point in time. Buying a house next year at 10% will likely take till 2026-2027 for me to make sense to refi. The economy's job market reports is kind of disengaging; almost 90% of jobs are non-white collar worker jobs including about 15-20% that are temp jobs. If holiday season doesn't go okay for all industries, but airlines, I presume Q1-Q2 will be suffocating.

By economic and finance norms, 5.5T% - 6.5% is a "healthy norm", so keep that in mind. It does not matter how long or how low into SUB-normal realm things got, 5.5-6.5 IS "normal".

Things look to be getting on track to land back at "normal" a lot faster then any anticipated, many indicating may land there and hover back in normal within coming 12 months.

How long do we sit at "normal", well I hope a very long time, at least 7 years, because the economy NEEDS stability and all the swings are NOT good for any kind of stability, which is needed to get things on track to get anywhere near to parity in housing demand. And fact is NEVER in history has the economy done well when housing was in any kind of struggle. A good economy requires a good housing economy, and significant shortage is NOT healthy.

But, do I see years of stability coming, NO. Hell, at this point I'd jump for joy with just 1 quarter of boring stability. We have not had stability sustained for years now, pick your chaos factor, there is too many to list. The silver lining is things have come VERY resilient to chaos, far more then years past, because were all used to it now, we get over things in light speed now compared to historical norms.

By economic & financial norms-- you're absolutely correct. But by the average investor, look here for your case studies or look at the average joe in a different asset class, they'll tell you 5.5-6.5 is high. So it's normal, but it's not expectation. There's a difference and if it's not meeting expectations, that's when the market reacts harshly.

As for stability, I think we take it 1 year at at time. Political uncertainty will be more directional than any other input that comes across and we're going to remain on course or change in approximately two years.

If a persons expectation is sub 5% mortgage financing, or especially sub 4%, they are NOT an investor nor a Real Estate Professional, there a speculator with extremely limited experience or knowledge. Name the industry, any/every industry has had GREAT years where everything was just perfect, and nobody of any professional stance then stomps there feet yelling something is wrong if "perfect" is not perpetual.

All the Non-professionals exiting REI is a GOOD thing, it means STABILITY not instability. The non-professionals make-up a drip in the overall bucket that is REI Industry. For decades countless masses seek to get in, buy programs galore to find there in, and very VERY few ever actually get-in. The vast majority of REI activity is, has been, and will remain professionals.

So for the few who will be pressed out, and yes it is a very limited few who actually would have been in but can't vs those just using it as there new excuse for still not actually doing anything, oh well. It's a non-issue.

For the many who want to get in and find a hurdle, and use there wit's, they will JV, join syndications, turn-key, or any of the various other entry options. There is a lot of very smart "noobs" out there, I have faith most will recognize when the climate has changed and level of complexity has moved above there capacity, and that it's fertile ground to ADJUST to JV-type actions.

There is no risk of sizable capital retraction from such.

In bold, you'd be surprised. Very surprised. Clearly, you're way ahead of the curve, but don't assume everyone else is. Infact, that's the reason there is a curve.

0 Votes

Dallas, Texas

Quote from @Cade Antonucci:

Quote from @V.G Jason:

Quote from @Cade Antonucci:

I am currently analyzing the purchase of 17 units from another real estate investor. Looking over the numbers, everything makes sense and I would like to go forward looking for financing. This would be the first time I would purchase multiple units at one time, Before I only have purchased single family homes one at a time. What kind of financing should I be looking into? What kind of down payment will i be looking at? What do I need to show as far as income and debt to equity ratio? I would appreciate any help this forum can offer!

Isn't that the kind of stuff that would tell you if it would make sense?

How are you able to say everything makes sense without those aspects?

I pulled an estimate out of my *** for an interest rate at basically a 20% down payment option and the cash flow was more than sufficient to cover my fake scenario. The rents are good for the price, so just looking to see if my estimate matches the reality of what I would get as far as financing to keep moving forward in the process.

Fair enough

0 Votes

Quote from @Eliott Elias:

Utilize seller finance

Have you done this before? I'm looking at options of these. I have some different ways I'd like to structure it, I am just am unsure if that's mitigated at the state level or if it would be legal. One of them would be a tiered rate structure. Do you usually put the same down and ask the seller to beat the lender's rate?

0 Votes

Charlotte, North Carolina

Quote from @Patrick Drury:

@Nate Saenz
If you can work remotely you should consider Columbus OH. The cost of living will be cheaper, which will help you save more money and build your portfolio faster. From an investing standpoint, the city is a hybrid market of cash flow and appreciation. There are lots of job opportunities and population growth in Columbus OH.

No offense going from Austin to Columbus would be awful. If you're doing it strictly to house hack, sure whatever do it for a year I guess. But don't think the wife would be happy, nor you. Regardless, Ohio is an intriguing place to invest for sure.

What's your target price range for each of these houses, are you looking for cash flow & appreciation, one of the two? How much liquid capital do you have? Are you planning to self manage or property manage? Are you taking personal loans or going the LLC route?

2 Votes

Colorado Springs, Colorado

Quote from @Cade Antonucci:

Isn't that the kind of stuff that would tell you if it would make sense?

How are you able to say everything makes sense without those aspects?

0 Votes

Quote from @Jewel B.:

Quote from @V.G Jason:

Quote from @Jewel B.:

Quote from @V.G Jason:

It'll be a myriad of reasons. It's either priced too high, in an unsafe area, some damage is on the seller's disclosure list that you need to look at, they are being prohibitive to prospective buyers(no photos & only showings after accepted contract), current tenants could be an issue, really anything. You should run the numbers, for the sake of grasping it. If you're an out of state investor, or trying to be like me, you'll have to get varying property tax rates, laws, etc., that change how you approach certain type of housing prospects.

Oh wow, lots of options I see. Would a realtor in the area know why? I'm not sure what exactly realtors see about a property or its showing / offer history. I will run the numbers then, at worst for practice, at best to find a deal. For the types of properties I'm considering, would it be wise to go in with a contractor during the showing who can take notes and provide rehab estimates? I've never house hunted or worked with a realtor before so I'm not entirely sure of the process. Suppose to talk to one next week.

For tax rates and laws, there are government websites with ordinances or county assessors right? Or where would I go to find that info?

I wouldn't worry about a contractor during showing. Get the inspection and know the issues or if you have the seller's disclosure, you can ask local contractors for guesstimates(then add 10-15% to it time and money wise). In this market, almost nothing is intrinsic there's multiple reasons for that one strong carry component of it is you have people still pricing and hoping for some early 2022/2021 relevance in price which is just a far cry given rates are up 4% from that(more than double). They see past 6-12 month comps, don't factor into it rate changes, and price "around" those. Lot of clueless price composers here. You need to make it intrinsic, there's a variety of ways to do that. One would be a lower offer, yes, but plenty more.

What are some other factors to consider in negotiations besides simply price?

Condition incl recent capex improvements, location, appliances, rent rolls if it's leased, HOA policies, etc.

0 Votes

Quote from @Austin Fowler:

Quote from @V.G Jason:

Quote from @Austin Fowler:

Quote from @V.G Jason:

Quote from @Austin Fowler:

Quote from @V.G Jason:

Quote from @Austin Fowler:

Quote from @Nicholas L.:

@Austin Fowler

thanks for the explanation, I was confused as applied to single properties, but I think what you're saying is that you take money from investors and invest it in a portfolio of SFHs. you don't say "i need $X for a down payment for house A, and i'll pay you back strictly out of the cash flow of house A." instead, you invest the aggregated funds. is that accurate?

and you said most investors don't want a monthly payment - so when do they exit? say, 5 years - and they get their principal back plus the interest?

That's correct, investor funds are pooled and used buy a portfolio of assets. A Stairway 8% savings account isn't an investment that you exit. It's where you put cash that is not currently committed to a better deal. People use it as such. Maybe someone builds up their balance to $50k-$100k then makes a significant drawdown to purchase an asset. Maybe someone uses it as a place to store funds set aside for a rainy day. It's a tool. And a tool that comes with total access to all of the details of all the assets that back the fund, education on how to acquire similar assets, and all the infrastructure and legals to enable you to build a similar pool of clients and raise capital for yourself.

If you are interested in learning more, or leveraging the infrastructure I have built, please message me.

What? It's not an investment that you exit? It's for a rainy day fund or a significant draw down to buy an asset--that's an exit, no?

If your investors all wanted their money back today, what's stopping them?

Nothing stops all investors withdrawing all their money at once. I have sufficient cash, credit, and liquid stocks to satisfy such an event without selling a single house. Fractional reserve banking has existed for over 350 years. It's a sound business model I didn't invent.

You're not a bank. Fractional reserve banking doesn't apply for you. I think that's what you're missing here.

How much of the investors initial capital covers the 33 houses you bought?

Fractional reserve banking is a mathematical technique, any business can make use of it. Currently I have a total client balance of $1.2M. The equity in my 33 SFR rentals as calculated using the appraisals obtained at time of purchase is $1.87M. It will have grown substantially since time of purchase. I have $150k cash in bank, $350k unused credit, and $800k in liquid stocks. Plus another $300k equity in my primary home, and all the usual incidentals such as cars etc. that are all collectively used to secure client funds. Not to mention I have a $625k W-2. Trust me, I run my business very conservatively. In comparison to my income and assets, the business is at a test stage. I have done my market research, bought 15 REI Nation properties, 12 SDIRA wealth properties, and 6 properties directly through a real estate agent. While I'm happy with the performance of the 33 properties overall, the REI Nation properties of the best performers and where I will focus expansion future.

That wouldn't hold in court. Good luck saying I was using fractional reserves, therefore, I was short liquidity when my investors wanted all their money back & thanks for understanding why you're not kept whole.

I bolded the $150k in bank, I assume the bank for your investors that you're paying back to not personal bank. I bolded the $1.2m, this is where it's all off. You need to keep these investments private, too.

I don't care about $800k liquid stocks--that's personal. $350k in unused credit--that's still a loan. You'd be loaning to pay off a loan? $300k equity in primary home--that's personal. $625k in W2---that's personal.

You're comingling your investor funds and your personal funds. This is an issue, too. You're basically stating I'll keep my investors whole on the 1.2mil by extracting from my personal account, I'm not sure if you fully understand the law here. I'd delete this posts and clean up the act.

As mentioned many times, this has all gone through a securities lawyer, so the legality is not in question. It is important you understand that when you borrow money my way you back it with everything you've got. You don't get to separate out an entity and say only that entity is liable to repay. If you did, you could let that entity go bankrupt and potentially hurt investors without being on the hook yourself.

The terms and conditions are on this thread. Investors know where they stand if there is a liquidity issue, they get paid more interest until the issue is resolved. In 20 years of operation I've never need to activate the penalty interest clause. Feel free to DM me if you'd like to delve deeper.

That is why you do create an entity. You can't combine an investment account with customer liability into your personal account. Your securities lawyer probably wasn't told that aspect. He probably just said, sure you can raise funds to buy houses and pay a monthly distribution. Not yeah go for it, and let's back it with your personal stuff. Or the law firm is completely incompetent and inept.

0 Votes

Quote from @Leo R.:

@Engelo Rumora sorry to hear you were affected by the FTX debacle.

This is an interesting topic, and I think it's especially interesting on a real estate-focused platform like BP...

The reason being: in my mind, real estate and crypto are opposites in so many ways. For instance, they're opposites in terms of liquidity, physicality, age of the business model, volatility, etc., etc. ...and, my impression is that they're also opposites in terms of the mindsets of the investors (e.g.; many RE investors have comparatively longer time horizons, and I would assume that most RE investors have a lower tolerance for risk).

I'm a RE investor, and don't have any crypto, but I have plenty of friends who hold a lot of crypto, and we've discussed crypto endlessly...

At the risk of sounding like a luddite, even after years of discussions and reading countless articles, I still don't feel like I have a good understanding of crypto. ...and frankly, I'm skeptical of people who claim to have a thorough understanding of it (yet, there are no shortage of self-proclaimed "experts" who describe crypto with the confidence of someone predicting a sunrise!)

...RE, on the other hand, is comparatively simple to me--I can wrap my mind around what makes a property valuable, what factors affect the market, the advantages/disadvantages of various RE investment strategies, etc.

Don't get me wrong--I'm not trying to knock crypto. I've long said that my crypto friends will probably have the last laugh when we're all 80, and they have quadruple my net worth from cyrpto investments. Plus, it's not like RE isn't also getting hit right now--many people holding RE will probably take a significant hit to their net worth this year. ...but, at the end of the day, I don't feel like I have a thorough enough understanding of crypto to go in on it at any significant level... ...but, it will be interesting to watch it evolve in the coming years!

Crypto or bitcoin, which do you not understand?

It's a shame this happened, but it's happened many a time before. If you didn't have your stuff in a cold storage, it's your fault at this point. It'll happen again.

0 Votes

Toledo, Ohio

Quote from @Chris Martin:

I don't see much movement over the past three decades or more. Nothing alarming at least. After the GR homeownership dropped in every age bracket, but each age bracket is within the 30+ year norms. I was a little surprised that the 25 and younger bracket was above 20% in 2006 timeframe. I'm not that surprised this age bracket is almost at 20% again. Percentage wise, the under 25 YO group is most volatile, but again the overall picture is "normal". Having trouble with the 'at' thing...

@V.G Jason

Who cares about history?

That doesn't mean anything about what will happen. Stop using backdated trends to determine the future. There's one common theme here, your dollar will be worth less. If you agree with that, you'll get on the same page.

The rate of which assets will go up, will be significantly higher than the rate your dollar yields. If that gap keeps widening, what allocation of your daily dollar now has to provide basic necessities? I don't know an exact number, but I'd say safely a higher allocation. If you have a higher allocation to basic necessities, you have a lesser allocation to disposable & savings. Do you get why as this process accumulates you will have primarily a renter nation?

People have less money to save/hold for assets, while assets are widening from the value of a dollar. They're chasing a moving goal post, but keep getting tripped up.

0 Votes

Quote from @James Hamling:

Quote from @V.G Jason:

Questions are how long do we stay at this high rate environment(relatively speaking to last 15 years)?

By economic and finance norms, 5.5T% - 6.5% is a "healthy norm", so keep that in mind. It does not matter how long or how low into SUB-normal realm things got, 5.5-6.5 IS "normal".

Things look to be getting on track to land back at "normal" a lot faster then any anticipated, many indicating may land there and hover back in normal within coming 12 months.

0 Votes

Dallas, Texas

All Forum Posts by: V.G Jason

V.G Jason has started 15 posts and replied 3176 times.

Post: Housing crash deniers ???

Post: Looking at purchasing a portfolio of 17 units

Post: Creative ways to get first rental

Post: New, serious, self-educating & want 3-4 rentals buy end of 2023.

Post: Looking at purchasing a portfolio of 17 units

Post: Reasons Properties Stay "on the Market"

Post: Property 8, 100% financed

Post: FTX Disaster! What Next?

Post: JPMorgan is about to spend $1 billion, hundreds of homes to rent

Post: Housing crash deniers ???

V.G Jason has started 15 posts and replied 3176 times.

Biggerpockets Logo Post: Housing crash deniers ???

Biggerpockets Logo Post: Looking at purchasing a portfolio of 17 units

Biggerpockets Logo Post: Creative ways to get first rental

Biggerpockets Logo Post: New, serious, self-educating & want 3-4 rentals buy end of 2023.

Biggerpockets Logo Post: Looking at purchasing a portfolio of 17 units

Biggerpockets Logo Post: Reasons Properties Stay "on the Market"

Biggerpockets Logo Post: Property 8, 100% financed

Biggerpockets Logo Post: FTX Disaster! What Next?

Biggerpockets Logo Post: JPMorgan is about to spend $1 billion, hundreds of homes to rent

Biggerpockets Logo Post: Housing crash deniers ???

Post: Housing crash deniers ???

Post: Looking at purchasing a portfolio of 17 units

Post: Creative ways to get first rental

Post: New, serious, self-educating & want 3-4 rentals buy end of 2023.

Post: Looking at purchasing a portfolio of 17 units

Post: Reasons Properties Stay "on the Market"

Post: Property 8, 100% financed

Post: FTX Disaster! What Next?

Post: JPMorgan is about to spend $1 billion, hundreds of homes to rent

Post: Housing crash deniers ???