Real Estate

[F32Fleet]

Originally Posted by NEfan508

Somerville MA a part of Boston was nicknamed "SLumerville" less than 10 years ago now I can't afford anything here

I literally got priced out of Boston year(s) ago and I've been making OVER 6 figures consistently for 15 years +

For all you west coasters, Boston area is similarly priced to SF California but with shitty weather and ugly women


I'm not 40 yet, kids 2/3 of kids already @ university little guy few more years, Sell all my assets and move to NC? Definitely considering

ROFL. . That "Georgia" house exists. It is one of my favorites and is worth about $3MM. Basically all of the homes along Paces Ferry Rd are $2MM+.

520 Paces Ferry Rd, Atlanta.

[F32Fleet]

Originally from WNC and still have family there.

Word of caution to those who want to retire there. What happens quite frequently is that newly retired couples build a big or well appointed house and then leave after about 10 yrs so they can be closer to their children/grandkids. Sometimes an age related health issue or death is the impetus.

To an outsider land in WNC is generally viewed as inexpensive. Building costs are a little high because builders, for decades, have known that out-of-state retirees generally have a lot of $.

So with land being relatively cheap and plentiful it can be difficult to sell ones "unique" retirement home when outsiders have their own designs for their "retirement home".

Hope this makes sense.

[kscarrol]

Originally Posted by F32Fleet

Originally from WNC and still have family there.

Word of caution to those who want to retire there. What happens quite frequently is that newly retired couples build a big or well appointed house and then leave after about 10 yrs so they can be closer to their children/grandkids. Sometimes an age related health issue or death is the impetus.

To an outsider land in WNC is generally viewed as inexpensive. Building costs are a little high because builders, for decades, have known that out-of-state retirees generally have a lot of $.

So with land being relatively cheap and plentiful it can be difficult to sell ones "unique" retirement home when outsiders have their own designs for their "retirement home".

Hope this makes sense.

Totally fair observation! The moving closer to kids/grandkids is of course not unique to WNC but definitely a issue as we age.

As for the house, yes we see many large homes in the area we own and it is definitely not what we want! We will keep it reasonable/similar size to our current home which is 2,600 sq ft.

[Mardio]

I bought my first Duplex in Seattle in the early 90s. Back then it was easy to leverage and buy more properties. Sure interest rates were much higher but lender standards were also much less stringent. I bought most of my properties through word of mouth and with my ear to the ground. Back then the internet was just getting started and did not have much of a presence in the Real Estate market. As the internet grew over the years it made finding good deals almost impossible. Obviously sellers wanted maximum exposure so the under the table deals started to disappear.

Fast forward to today and multi-family properties in the major metropolitan areas are crazy expensive... you have to put down huge amounts of money just to break even. I couldn't even imagine trying to get started in today's investment market.

[NEfan508]

Originally Posted by F32Fleet

Originally from WNC and still have family there.

Word of caution to those who want to retire there. What happens quite frequently is that newly retired couples build a big or well appointed house and then leave after about 10 yrs so they can be closer to their children/grandkids. Sometimes an age related health issue or death is the impetus.

To an outsider land in WNC is generally viewed as inexpensive. Building costs are a little high because builders, for decades, have known that out-of-state retirees generally have a lot of $.

So with land being relatively cheap and plentiful it can be difficult to sell ones "unique" retirement home when outsiders have their own designs for their "retirement home".

Hope this makes sense.

So your saying don't build a sex dungeon and no custom basement replica of "cheers show bar" because a possible new owner likely not care about Boston tv nostalgia and look poorly @ my whips and chains

Paint in neutral earth tones not Celtic green dining room with parquet floors
Good advice

[F32Fleet]

Originally Posted by NEfan508

So your saying don't build a sex dungeon and no custom basement replica of "cheers show bar" because a possible new owner likely not care about Boston tv nostalgia and look poorly @ my whips and chains

Paint in neutral earth tones not Celtic green dining room with parquet floors
Good advice

As long as the dungeon contains a lot of neutral tones you're gtg.

[spazzyfry123]

Originally Posted by mecheng77

Anyone living in an area where you can buy a detached home for less than $350k run don't walk to your real estate agent. The world is a tumultuous place, home many countries have safety, security, good job prospects and are open to new comers. Not many. I can only think of USA, Canada and maybe select parts of Europe but Europe has high taxes and doesn't always welcome foreigners.

Unless the area is economically depressed, values will rise. We bought our home in 2012 at what we thought was a very high amount and my wife and I make good money. Our home has doubled in value and I only wish I kept my condo as well downtown Toronto. It was a nice boutique condo but small, I thought it would never really appreciate, how I was wrong. Well, I used the money for a good down payment in the suburbs and love it.

I plan to buy an investment property in the US that I can use for retirement, thinking of somewhere hot like Florida but I just need some motivation/help to start looking. Something modest we can rent out or put on Airbnb with a property manager.

The <$350k deal seems to be too much to me still. No one has the crystal ball, I get it. But the prices in my area have absolutely been sent to space at an extreme rate. Homes are selling for $400k that sold for $175k a couple years ago. Sure, they tossed some granite and stainless steel around. But that $175k was just the going rate, not some dump that got brought up to speed. Again, this is specific to my area, but I just don't feel comfortable buying. I feel like I'm buying something in 2007 to watch it crumble to half a couple years later.

[spazzyfry123]

Originally Posted by DETRoadster

On piece of advice: Buy a property that already has a structure on it. If it's lake front, buy one that also has a dock. Environmental and zoning laws can and do change. You could find yourself with a lovely lakefront piece of land and prohibited from building on it because after your purchased it was deemed a "wetland" or a breeding habitat for some endangered critter. Most of the time if you already have a structure you are grandfathered in and can still build, renovate, etc.

I have a buddy that bought land overlooking Puget Sound, just to the east of Seattle. It was their "retirement" property bought 20 years ago. He's now F'd because of land use changes that prevent him from building on it. he cant sell the land because who wants to buy property they cant do anything with.

Similar situation with my step brother who has a house in Kirkland on Lake Washington. Only 1950's house that's been in his family for years. It's surrounded by mega mansions that are prohibited from building docks. He has a dock dating back to the 50's so he's golden. Grandfathered in.

Excellent point. Some of the lake lots we've been looking at don't have the docks, but the permits are deeded. Even more already have utilities ran for the home to build. We've found some good ones in northern Tennessee that I really like. Even more so the price. We'll see!

[Kelse92]

Originally Posted by spazzyfry123

How do we feel about the current market and its somewhat-immediate future? Prices in Tallahassee seem to have skyrocketed in the past few years for example - selling for 50% more than they did just a couple years ago in some instances - makes a current buyer uneasy.

Certainly welcome any feedback, but what have others done? What has been your recipe? What mistakes have you learned from?

I live and sell Real Estate in the DFW metroplex, mostly Dallas County. I almost exclusively sell homes for 250k and under that have been flipped by an investor I work with, and they tend to FLY off the market. I also work with buyers in higher price points and I'm constantly getting them deals because the market is slower, especially above 500k.
I personally own a condo, but will probably be selling it end of the year and moving to more of a townhome style place where I can have a garage and small yard for my dog. I like the low maintenance of the condo/townhome.
Next year will then start the search to acquire some rental properties and maybe do a couple flips. Trying to get into something for myself, like others have said, while interest rates are as low as possible. Refinance was a consideration, but I don't love the place I'm in now enough to stay there.

All that said, I agree that prices have skyrocketed. 2015 in particular being INSANE in the market around here. But I think it's corrected quite a bit and things are steady, with the more affordable houses of course still the hot items.

I will say I made the mistake of settling for the current condo I'm in and not finding the right place to move after selling my previous condo when I saw the opportunity in the market a couple years back to make a big return on it. Oh well, going to take my time with the next one. And while the return was very good on the last condo, part of me regrets not keeping it and renting it as I start to look for rental properties now.

[spazzyfry123]

Originally Posted by Kelse92

All that said, I agree that prices have skyrocketed. 2015 in particular being INSANE in the market around here. But I think it's corrected quite a bit and things are steady, with the more affordable houses of course still the hot items.

I feel like the market here should be $250k for the average home in suburbia. I don’t consider that unreasonable. These are lower middle class, cookie cutter homes. Neighborhoods consist of mirrored floor plans with house A having blue siding and house A.1 being the same but with a 2 ft stone on the street face. That $250k home is $350k. I’m no expert (far from it at best), but how do people feel about another correction? The economy seems strong. The consumer seems stronger. Am I unrealistic in thinking the good times have a shift on the horizon with the election coming up?

(Election just being a factor, not a sole driver)

[chassis]

Asset prices don't seem expensive or overbought. This is what will signal a significant shift imo.

The economy is strong. The consumer is healthy.

Bulding permits and housing starts have flatlined. Population never stops growing (more housing always needed), and with the tempo in the real estate market, it might be time for construction to shift to the next higher gear.

[eluded]

Recession is coming.

[PoorLurker]

Originally Posted by F32Fleet

ROFL. . That "Georgia" house exists. It is one of my favorites and is worth about $3MM. Basically all of the homes along Paces Ferry Rd are $2MM+.

520 Paces Ferry Rd, Atlanta.

Thanks for the address! I enjoyed driving through that neighborhood on street view! Some pretty houses out there (for the few that I can see from the road, haha) I feel like I'd be too scared living in such a place. GRowing up where we literally live on top of each other, all that "acreage" seems spooky, haha

Originally Posted by Mardio

Fast forward to today and multi-family properties in the major metropolitan areas are crazy expensive... you have to put down huge amounts of money just to break even. I couldn't even imagine trying to get started in today's investment market.

Look at Cap Rates in So. Cal. I see these real estate investor blogs talking about X number of doors that they've own because of leveraging with 10% cap rates or higher. I look at cap rates for rentals around here and am like... hmm.... Is appreciation what investors are using vs. cap rate?

Originally Posted by JohnSnow

Winter is coming.

UncleWede Pops sounds like he did some wise investing! Like you, I have too many emotional issues dealing with extending myself to manage properties. I feel like I should just rent a guest/pool house from some rich person. Seems like that might be cheaper than apartments around here. I cannot believe the price of some apartments in non sought after areas!

[Mardio]

Look at Cap Rates in So. Cal. I see these real estate investor blogs talking about X number of doors that they've own because of leveraging with 10% cap rates or higher. I look at cap rates for rentals around here and am like... hmm.... Is appreciation what investors are using vs. cap rate?



A true way to evaluate any multi family is the cap rate. On a side note sellers can easily fudge the numbers to make the cap rate seem higher. Are all the expenses included? Are these real vacancy numbers? In my experience you have to do your own personal investigation in order to find out the true performance of the property.

So Cal has average cape rates of 4-6%, therefore yes... in my opinion investors are banking on appreciation (and rising rents) because the low cap rates make zero sense as an investment. You're looking at putting down anywhere from 30 to 60% just to break even. So you are parking a huge chunk of money for the long haul. It's not exactly the best way to leverage your money imo.

You probably noticed on your real estate investor blogs that most of them are out of state investors. To find 8 to 10% cap rates they have to look outside of the major metropolitan areas. It's not a bad plan because with those rates you can expect immediate cash flow if the property is in good shape. The downside is you have to rely on (and pay) a property management company and vacancy rates tend to be higher in these areas. That being said if I were just starting in multi family investing I would go this route. The key obviously is to find areas that have potential for future growth.

[roastbeef]

i've listened to a lot of podcasts on rentals (marco santarelli, dan lane) and most of the time the content just isn't applicable to my local market. some good tips and tricks, but the buy, rehab, refinance, repeat method isn't realistic over here in california.

Originally Posted by roastbeef

i've listened to a lot of podcasts on rentals (marco santarelli, dan lane) and most of the time the content just isn't applicable to my local market. some good tips and tricks, but the buy, rehab, refinance, repeat method isn't realistic over here in california.

Your girl Christina Anstead figured it out...she got them deep pockets though.

[roastbeef]

Originally Posted by FCobra94

Your girl Christina Anstead figured it out...she got them deep pockets though.

yea... its still tough with deep pockets. i have two friends that partnered to flip a beach house and they each made about $9k after six months of headaches. the house was a couple mill.

i'm a bit more reluctant. i'm just a blue collar worker that has made some wise decisions with the guidance of people smarter than me, combined with the internet.
i don't know much about construction, and you really have to know what you're looking at when it comes to rehabs. you can't trust a contractor to give a damn.

[Zara]

Located around the Chicagoland area, I'm currently only 25 years old but I'm looking to buy a small condo just to have a place to sleep and what not. Not a big fan of paying rent and just throwing that money away when I can just buy and if I decide to move out then I can just rent out that condo to pay off the rest of my mortgage. Prices from what I've been looking at are insanely high from what the prices were years ago and not to mention the property taxes in our state are no joke.. Even though I can afford a more nicer and bigger place for myself, I just don't see the logic in it since I'm rarely ever home because I'm always working. Plus I'd rather save that extra money to buy investment properties in the near future. I work with a lot of general contractors and developers on a daily basis and even they're telling me from their own experience (and connections that they have) that the market has peaked around our area and that they're beginning to sell off many of their rental properties now so that they can buy twice as many in the future once the next dip in the market happens. Of course no one really "knows" when the next dip will be or what the future holds, but looking at the current state of the market I also am saving at the moment to buy a couple of duplexes or a fourplex when the time is right and hold them as rentals and eventually flip them to buy more. The question also is do I want to buy these properties in IL or another state.. I've been starting to look into Texas/Arizona for rentals as more and more people are moving there within the last few years and not to mention the taxes are muuuuch better than here.

[spazzyfry123]

Bit more on the finance side, but who opts out of escrow for their mortgage? If you do, what do you do with the money until tax day? Are there specific investments that you use year after year? Do you let the interest off bigger accounts just pay for it?

[chassis]

We never escrowed in over 25 years of homeownership. I don't like the idea of someone else holding my money, when I can hold it myself. Tax money went into a bank account, either checking or savings, it varied through the years. Then it went to the tax collector when it was due. We never used investments to park cash earmarked for property tax.

[hybrid_eg]

Originally Posted by roastbeef

yea... its still tough with deep pockets. i have two friends that partnered to flip a beach house and they each made about $9k after six months of headaches. the house was a couple mill.

i'm a bit more reluctant. i'm just a blue collar worker that has made some wise decisions with the guidance of people smarter than me, combined with the internet.
i don't know much about construction, and you really have to know what you're looking at when it comes to rehabs. you can't trust a contractor to give a damn.

Yes, for those looking at residential RE investments may that be remos or even full tear downs its not rocket science as GC's like to make it sound. If you don't know about construction yourself but have a trustworthy GC who will not rip you off there is still money to be made even with RE market on the downturn.. more to be made in owner builder scenario. The challenge here in socal with present market condition is that most properties including tear downs are way overpriced and whats even worst the sub-contractor prices for same work performed back in 2015 had jumped some 30+% in the last few years. However, on the positive side if you do careful market research (location specific) and what finished properties are going for there is still room for profits.. the biggest challenge of course is coming up with the capital and i believe market wise we are on the definite tail end of things so timing may not be the best at the moment as any drastic changes in the market may leave you with a loss.

[Kelse92]

I think the key in the market and the trend I’m seeing where the big money is being spent (ie Hedge Funds) is in the Single Family Rental (SFR) market. Suburbs around here you can buy new construction for as low as around 205-215k for the average 3/2 1600sqft single story and it will bring in $2000-2100/mo. They also are going for 1980-newer properties with similar numbers. I think with market prices likely generally stabilizing over the next few years this will be a good model