All Forum Posts by: Robert Steele

Eliza Blue I think you are missing Tom Goans point. It doesn't matter what the comps say if the market participants cannot afford it. The market can often fool itself. Look at all the markets that blew up after the last bubble. It doesn't help you much when you are upside down 30% by saying "but the comps said it was a fair price".

If demographics say that in any given local market the median house price is $500K but the median income is $25K and the recent sales comps support the $500K asking price (because people making $25K a year are using 0% down NINJA loans) would you still feel confident that it's a good buy because the comps say so?

With blood, sweat, tears, perseverance and a little bit of luck.

Roberta Langford this is a little off topic but I'd have to agree. The property tax kills me. It's almost as much as the mortgage payment in some cases. It's depressing because even when the house is paid off almost 1/3rd of the rent will go straight to the County Tax Collector.

Not only are homes going under contract in the blink of the eye but so are rentals. A friend of mine has been trying to find a $1600 rental and every place they look at is dirty, smells like dog and is outdated. The few that are nice are gone before driving back to the office to write up the app.

You've probably already heard that the S&P/Case-Schiller Home Price Index came out today showing a 12.05% year over year increase. This is great for those of us who are already positioned but I have to worry about some of the cities with the highest increases.

What could go wrong?

Thanks Reginald Vickers. This is the kind of information I was trying to get from the original two faceted post. That and to stimulate conversation on the topic. I'd like to return the favor by providing some contrast from when I got into the game in 2000.

There were much fewer "gurus". The one that got me all excited (before I found out the advice that worked in the 80's didn't work so well today) was Carlton Sheets.

I didn't personally experience this but I never really trusted the stock market to begin with and seeing the tech bubble crash just cemented that distrust for me. So I had to seek an alternate investment vehicle for my road to financial independence.

I don't think there were any reality RE shows? Although watching them when they did appear did give me that extra shot in the arm.

BP didn't exist either nor anything like it that I was aware of.

In the beginning mortgage rates were much higher and rentals in less demand due to everyone becoming a home owner. I'd look at 100 properties in a 6 month period and sometimes not even find one that cash flowed decently. Descent at the time was $100/month.

For a while now (right up until this year) I was amazed with the contrast of how easy it was to find cash flowing properties, what with the low rates and high rent. Like shooting fish in a barrel.

Another leg up you newbies have on us. Information was harder to come by on the Internet. For instance, title searches online today as apposed to sitting at the county clerks office then.

If you go into it with the mindset that this is a get rich slow scheme and you have the necessary patience, commitment and perseverance you will do just fine. The good news is that it only gets easier with time. Eventually one day everything just falls into place and you're a millionaire.

Edwin E. Yes! Quit buying all my houses! ;)

Be that as it may I am still confident that prices here in Texas will return to normal once the builders play catch-up. Historically Texas as a very elastic housing supply.

So I am still comfortable selling my lemons into this run up in prices and buying cheaper diamonds in the rough in the future, Assuming interest rates don't reverse their multi-decade decline.

Yes this has been at the back of my mind for a while now: what happens when all the hedgies decide its time to get out?

Surely they have an exit plan and I'm betting it's not to be a landlord for the next 20 years. As I recall the public/private partnership said they had to hold for a minimum of 3 years or was it 5? Either way I am banking on a flood of supply sometime in the next few years.

That's why I've felt comfortable selling some of my income producing property, that has not been performing as well as I'd like, into this run up in prices. With the expectation to buy back in in the near future at lower prices.

Tyrus S. I got into REI for pretty much the same reasons. Yes we were all newbies once . The purpose of this post is not to bash newbies but trying to discern if there has been a disproportionate increase recently and if so why.

Plus it is more interesting than reading a "should I use a LLC" or "how do I screen tenants" post for the millionth time. :)

Yes I thought of that. But then the number of new member introductions should be the same ratio to regular posts as it was a few years ago. It's not.

So why are you getting into the game Patrick G. ?