All Forum Posts by: V.G Jason
V.G Jason has started 15 posts and replied 3397 times.
Post: Frustrated with Unrealistic Expectations
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Quote from @Charlene Livers:
Sorry, but let me rant for a minute. I’ve been talking to a lot of people lately who want to break into real estate with zero experience. Most of them just took a class from some random ‘guru’ and now expect 100% financing on the purchase and 100% on the rehab. Then when I give them realistic numbers, they call me a scammer. Honestly, it’s frustrating and feels like a waste of time.
For context, I manage an ALF, broker money, and also do fix and flips. My most recent deal actually fell through, but that’s just how business goes sometimes. I’ve been in real estate for quite a while, and I know firsthand it’s not easy. This business takes skin in the game, experience, and realistic expectations.
What’s going on with this mindset? What do you all think is driving this trend?
2020-2021 happened. Life was easy.
This is all asset classes, almost. The mindset was easy money, easy go. Now it's reverting to the mean. That's all it is.
Fast solutions have slow problems.
Post: Who determines the price of a house?
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The first party in the transaction usually dictates the price. That's usually the seller via the realtor.
The seller has the right to list at whatever price they want. The market may not respond to it, but that's the market. Not the price.
Speaking past theory, and in the real world 99% of buyers have no idea what the price is and the realtor's abilities to seize the emotional disarray is what actually makes it sell. Right now, the banks are the actual stopping point-- less approvals, less closings, stricter terms.
Post: Looking for STR markets in US
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Quote from @Chris Watson:
Quote from @Andrew Steffens:
Be careful not to put too much on a "hot" market you've read online. An example would be a couple years ago AirDNA said Weeki Wachi FL was a top market. About an hour North of Tampa this is a small town with some beautiful springs and manatee/dolphin viewing places. Real Estate is cheap, which is why the numbers looked great. Once it made the list on AirDNA a bunch of people bought up properties and saturated the market. Demand was nowhere near the supply.
Que @Collin Hays but I think it is, in bold. You may be the top 7-10% there, but from everything I am seeing this is straight falling knife. Live bidder on properties there and it's just a game of chicken. Who boks first?
Post: First Steps With a Tight Budget
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Your first step with a tight budget is to get into a position of strength financially. Then, if you're overwhelmed you should consider settling down and figure things out first.
Post: Financial Freedom and Advice for a young man in his early 20s.
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Nothing will work until you change your perception.
Post: The Opportunity That No One is Talking About in Short Term Rentals...
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Quote from @Gregory Schwartz:
Quote from @V.G Jason:
"you're buying barely-desirable property(likely above market rate)"
This is a bold assumption and a big dump on his parade. I don't think Blake said anything about "barely-desirable properties" or what he paid. Plenty of great, very desirable homes within 30 minutes of Austin.
Nothing bold about it. If he paid $550k on the outskirts, it's a definitely over market value and the best parts of Austin are in Austin-- and that's in correction territory. He's optimizing it, good for him.
But STRs are just hospitality on top of RE. The crux is still going to be the quality of the location you bought and the price you paid. Both of which appear to be subpar on this one.
This is like my STR in the outskirts of Raleigh; it's doing excellent, but it's not a better asset or investment than any of my primo Raleigh or Durham one's. But I sure as hell did not pay above market value for it.
Post: Would You Buy Rentals Out of State Without Visiting First?
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I walk every property I buy, and I buy in a bunch of different states.
Saving a trip for such a costly endeavor will cost you later far more.
Post: If you had $10M, how would you invest it?
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Quote from @Becca F.:
Quote from @Jules Aton:
50% lump sum into VTSAX & 50% HYSA
Quit my jobs, my sell properties, give to charity and live my best life on $500,000+ a year.
I like this answer. Out of courtesy, I'd give employer 2 week notice. If I got a $10 million check out of the blue, I'm not even going to stress out doing real estate deals and trying to scale. I like the donating to charity too. If you asked your average person in the USA who can't even cover a $1000 emergency expense what they would do with $10m, they'd thrilled (as long as they invest it and don't buy stupid expensive things), the people on BP are a privileged group.
I've cut down on my posting and commenting to BP - I've been doing a lot of reflecting and it's not my mission in life to constantly chase money, try to find properties to buy, and do all this extra stuff which is adding to unhappiness in my life (nothing wrong with that for others if they want to scale and build a real estate empire but that's not me). I literally spent 2 years of my life losing money and looking for Class C properties to "cash flow on paper" - I won't ever get my time back even if I recoup some of the money. (Sorry for the digression but just my thoughts).
I live well below my means and lead a pretty simple life but just happen to live in a VHCOL area. I could live a pretty comfortable life on index funds and HYSA.
You'd get wiped out quick and you're totally tied to the fed funds(your HYSA will lose power) and market correction. We all are to some degree but living off say 80% index/20% HYSA would be rougher than alternate routes.
Don't confuse your gross yield against CPI. Your true CPI is way higher, your yield is net not gross, and fixed rate is on the decline.
Post: If you had $10M, how would you invest it?
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Quote from @John McKee:
Here are the returns I'm getting: Keep in mind these are conservative investments with very little risk. The goal of this portfolio is not scale or leverage but income. Here is how I would divide up the 10 Million.
12% mortgage notes. 2,000,000. or 240K a year (3 separate note funds)
10% Private Credit. 2,000,000 or 200K a year (3 separate note funds)
7%. NNN lease property 5,000,000 or $350K a year (corporate standalone, or small strip center in a dense neighborhood)
4% Money Market $1,000,000 or 40K a year
Total Income for the year: $830,000
About 1/2 the income would be rolled back into the current investments and I would live on the other 1/2.
$830k gross, not taxed. That'd be likely $500k after taxes(5% return), and no real assets besides the NNN one. And the 12% notes inherently carry more risk.
Outside of your leases, you're growing in dollars. Need to grow in assets. You're doing the inverse. You want (hard) asset backed revenue streams.
This is good cash flow today though. The game is
Cash->(hard) assets with some leverage-> return some cash-> recycle into more (hard) assets with some leverage-> return more cash return. Do that 2-3 cycles over, depending on age, then take some returns or trim and pay off debt.
You don't want the same outputs without the asset. That's wealth destruction. You need to bet against the dollar not be neutral, which is inherently net negative. Hard asset with 20-40% leverage, can do more for RE but nothing crazy.
Post: The Opportunity That No One is Talking About in Short Term Rentals...
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Net income is $25k? That's the number you need to include in the first post.
We're not missing anything, you're buying barely-desirable property(likely above market rate) and optimizing it. Good for you on the latter, but the former is what we focus on and it has a lot more downside than upside. Real estate's emphasis on location cannot be overlooked.