Anyone here into real estate investing?

#51
#51
Big Orange#1 said:
Strong correction especially in extremely overheated markets like Phoenix, Boise, Nashville etc. My MIL is a realtor in middle TN she said it’s scary right now. Nervousness in the air as inventory has skyrocketed just over the last month. She said it’s ground to a halt and her brokerage only has 4 active buyer clients. In the 7 years she’s been there it’s never been below 15 buyers at any given time. The logical next step would be price reductions to bring back buyers with these skyrocketing rates.
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It needs to be corrected. The cost of homes has skyrocketed past average earnings increases.
 
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#52
#52
It is amazng what people from other states will pay to move to the middle Tennessee area. Some surrounding counties arround Nashville have had over35% growth the past decade. While things have slowed down, it's still very difficult for first time buyers.
 
#53
#53
CPA said:
It is amazng what people from other states will pay to move to the middle Tennessee area. Some surrounding counties arround Nashville have had over35% growth the past decade. While things have slowed down, it's still very difficult for first time buyers.
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This is why people waiting for this mysterious housing crash before they buy is going to get it **** on. Tennessee is still cheap compared to most of the country so the increases we’ve witnessed so far are not going back down. Meanwhile rates have doubled.
 
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#54
#54
BAJAvol said:
This is why people waiting for this mysterious housing crash before they buy is going to get it **** on. Tennessee is still cheap compared to most of the country so the increases we’ve witnessed so far are not going back down. Meanwhile rates have doubled.
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Prices are going down currently, but not crashing. The crazy bidding above asking price of the past couple years appears to have stopped. Will be interesting to see where it goes from here, especially if the prices of lumber and other building materials that have doubled or more in the past 2 years start to come back down to earth. If they do and it becomes cheaper to build new then existing homes will be forced to adjust down their pricing. IMHO
 
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#55
#55
walkenvol said:
Prices are going down currently, but not crashing. The crazy bidding above asking price of the past couple years appears to have stopped. Will be interesting to see where it goes from here, especially if the prices of lumber and other building materials that have doubled or more in the past 2 years start to come back down to earth. If they do and it becomes cheaper to build new then existing homes will be forced to adjust down their pricing. IMHO
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In just a week as we get ready to put our house on the market Thursday we have already changed our proposed listing price by 10K. I think still a good time To sell. I think a lot of people will come back to the market because finally you feel like you can actually get a house and not be outbid and I think for a few months that surge will keep pricing more steady. But then I think we see some of the 500k houses that were sole 4 years ago for 220 start to fall maybe 6 figures. That’s what I’m hoping for atleast. Get my money out then buy everything I can in the downturn
 
#56
#56
BAJAvol said:
My main strategy is the BRRRR. I love finding a piece of **** and doing a full Reno, and pulling the majority of my investment back out when I’m done. Then renting it at a $400 minimum cash flow. Hard to find these right now but my website ranks #1 for motivated sellers. I do flip as well if it’s a bigger house or there is too much money to be made.
I use a private lender now, but I use companies that use DSCR loans to do my refinances. Rates are higher but as long as I hit my cash flow target I don’t care. You just have to know your ARVs, Rents, and construction costs before you buy. You make your money when you buy. I am loving this market correction because people call me every day wanting me to buy their piece of **** house. For flips, look into a reputable hard money lender like Kiavi and Longhorn if they service your area. I also used 401k loans. Paid like 4% on the 401 loans to profit 72k on my last flip.

I own 4 rentals right now that average $425 per month in cash flow. All have been refinanced and I have left a total of $8,700 in all 4 deal combined. That’s like investing $8,700 for a 234% return. Real estate is king

Read BRRRR by David Greene. Also read the book on flipping houses by J Scott as well.
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I'm currently on part 3 the rehab process of BRRRR. Great info so far and since the wife just got her real estate license a couple months ago and the market seems to be slowing some, we're hoping and praying that we find a good deal or two to get started. I also have a background in construction so I can save quite a bit by doing some of the reno work myself. Thanks for the heads up about the book BRRRR!
 
#57
#57


Great video with all kinds of data. And it all points to one thing to me. The new homes supply increase is absolutely insane. Parabolic.
 
#58
#58
Big Orange#1 said:


Great video with all kinds of data. And it all points to one thing to me. The new homes supply increase is absolutely insane. Parabolic.
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You post a lot of future real estate gloom and doom...which is fine. Caveat emptor and all that.

A 2008 magnitude crash has only happened twice in America. There will be an inevitable cooling of the market, maybe even a correction of over-priced homes. But a crash on the scale of 2008 is highly unlikely.

As an investor, I would love another crash and/or once-in-a-lifetime low rates. Dubious I'll see those again in my lifetime.
 
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#59
#59
McDad said:
You post a lot of future real estate gloom and doom...which is fine. Caveat emptor and all that.

A 2008 magnitude crash has only happened twice in America. There will be an inevitable cooling of the market, maybe even a correction of over-priced homes. But a crash on the scale of 2008 is highly unlikely.

As an investor, I would love another crash and/or once-in-a-lifetime low rates. Dubious I'll see those again in my lifetime.
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It depends on layoffs. If Powell is truly going to restrictive policy for an extended period of time and aiming for a weakening of the labor market like he says he is. I.e layoffs and unemployment back up to the 5% + range, then a 20% decline is definitely possible. Looks like We’re currently at about -5% median home sales price from the peak as of this month. Gotta wait until the official data is out obviously. But no full crash will happen without mass layoffs for sure.
 
#60
#60
Big Orange#1 said:
It depends on layoffs. If Powell is truly going to restrictive policy for an extended period of time and aiming for a weakening of the labor market like he says he is. I.e layoffs and unemployment back up to the 5% + range, then a 20% decline is definitely possible. Looks like We’re currently at about -5% median home sales price from the peak as of this month. Gotta wait until the official data is out obviously. But no full crash will happen without mass layoffs for sure.
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5% UE is essentially zero unemployment. That was the conventional wisdom for years.
 
#61
#61
McDad said:
5% UE is essentially zero unemployment. That was the conventional wisdom for years.
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historical data: Unemployment Rate we're now at 3.5% so even going back up to 5.5% would be a pretty decent downturn. Looks like a typical recession is about 2-3% rise in unemployment. So going back to 5.5% UE would be an average recession.
 
#63
#63
@McDad, if you don't mind me asking what type of real estate are you invested in? Like single family rentals, multi-family, air bnb/vacation rental etc. We are looking at getting into single family and possibly an air bnb/vacation rental.
 
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#64
#64
Vol since 77 said:
@McDad, if you don't mind me asking what type of real estate are you invested in? Like single family rentals, multi-family, air bnb/vacation rental etc. We are looking at getting into single family and possibly an air bnb/vacation rental.
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Single family, 1 multi (duplex), commercial lease/purchase, and commercial development.
 
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#65
#65
Vol since 77 said:
I'm currently on part 3 the rehab process of BRRRR. Great info so far and since the wife just got her real estate license a couple months ago and the market seems to be slowing some, we're hoping and praying that we find a good deal or two to get started. I also have a background in construction so I can save quite a bit by doing some of the reno work myself. Thanks for the heads up about the book BRRRR!
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Awesome! That BRRRR book is a game changer.
 
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#66
#66
Vol since 77 said:
@McDad, if you don't mind me asking what type of real estate are you invested in? Like single family rentals, multi-family, air bnb/vacation rental etc. We are looking at getting into single family and possibly an air bnb/vacation rental.
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Storage units aren't bad either. You don't get the property appreciation but it's one hell of a monthly cash flow...
 
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#68
#68
@McDad, nice. Storage units are great cash flow but here in middle tennessee it takes a lot of upfront money to build and they're very hard to get approved through planning commissions. Of course you could purchase one already built but not many come up for sale here
 
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#70
#70
TheDeeble said:
I've half seriously talked to my brother about storage units. Although neither of us would have any idea of how to go about it.
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I bought two separate sets in 2010 and 2012. These are both lower end units (not climate controlled, not gated). Upside of buying existing units is you already have a customer base.

There are some issues occasionally with zoning. Zoning tends to be much easier in rural areas as compared to suburban or urban areas. I'm in a unique position as the two other people in the town with them are extremely well connected politically so that's a nice plus since something like a Public Storage won't get approval.
 
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#72
#72
Does anybody have experience with tax sales by municipalities? How are mortgage balances researched and handled before the auctions?
 
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#73
#73
https://www.realtor.com/news/trends/housing-inventory-report-2022-august/

"From July to August, national prices dropped from $449,000 to $435,000, their most significant month-to-month plunge in data history dating back to 2016, according to a new report by Realtor.com®. "
-3% home price decline in a month. Good deals may be coming up soon, if the downtrend continues throughout the year. Average monthly decline during the 08 crash was 1.1%
 
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#74
#74
Picked up another little house I’m going to BRRRR. Here is the number breakdowns.
purchase: $60,000
Rehab: $60,000
ARV: 185,000
Will do a cash out refi at 75% ARV
Rent:$1,400

This will be property #5. I’m retiring when I hit 20
 
#75
#75
Thunder Good-Oil said:
Does anybody have experience with tax sales by municipalities? How are mortgage balances researched and handled before the auctions?
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Not much experience here but you can use a software called propstream to get an accurate mortgage balance. They always have to be paid typically as a result of the due on sale clause
 
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