The rise of the out-of-state mom and pop investor: New companies seek high income coastal buyers for out-of-state investment properties.
It appears that rental Armageddon has now gone mainstream. Nearly a decade ago when the first housing bubble was taking off, cautious buyers lamented about the high prices in many coastal areas as they do today. “But real estate is the only way to get rich!â€Â Okay. Then why not buy rental properties out of state? Of course this largely fell on deaf ears since house horny people only wanted to out compete their neighbors in the race to foreclosure glory. After 7,000,000 foreclosures and with 1,000,000 of those happening in California, most people have forgotten the past. Now we’re left with wonderful selection bias where those who timed the market (either by luck or foresight) are telling others that timing the market is impossible. Some people did buy investment properties out in Nevada and Arizona during the early days of the last bubble but these were largely flippers or people who thought they were wealthy enough to have a second home. Rare was the person looking to buy-and-hold for income purposes. So it comes as no surprise that there are now companies catering to high income coastal investors who realize a bubble is occurring but still want the benefits of owning real estate.
The out-of-state mom and pop investor
It is hard to miss the house horny national anthem about owning a home. You get a long list of deductions plus you build equity. Then you get the wonderful benefit of leverage. This is part of the chorus. Of course you get this as well when you buy an investment property. Yet there is one major caveat about buying a home to live in. When you live in the place it is not an investment. Money going out of your wallet is not an investment. You see this with many Taco Tuesday baby boomers. They bought a house a couple of decades ago that is now worth $1 million. Yet they still pay property taxes, insurance, and maintenance. That $1 million isn’t generating a cent unless they sell the place. On the other hand, if you have a rental property in a good market you are getting a check every month. This niche market was largely exploited by Wall Street and big investors when the market imploded many years ago. Now companies are picking up the slack.
“(Reuters) Even with a good salary as a data scientist at a San Francisco technology firm, Yang Guo, 30, knew he couldn’t afford a home in the Bay Area, among the priciest U.S. markets.
He still wanted to own property in addition to stocks, however, and soon found a way to buy cheap rental houses in faraway cities – and to outsource the associated hassles to HomeUnion, a three-year-old startup in Irvine, California.
The firm is among a small crop of new companies, including competitors Investability and Roofstock, that offer ways to buy, renovate and manage properties in markets that command relatively strong rents compared to their low home prices.â€
I’m assuming this buyer being a data scientist might be a tiny bit more analytical than some of the folks I see buying in SoCal using lemming Hollywood calculus. The company HomeUnion is based out of Irvine, a market that recently has been dominated by foreign investor money. But even on their site they talk about household income for investment purposes:
When it comes to investment properties, local market incomes absolutely matter. In California, household incomes don’t matter according to the house humping brigade. But it definitely matters if you are trying to turn a profit for rentals. And here you see HomeUnion is using median income as one factor for determining whether a property is a good investment. Good luck doing this in San Francisco where a $1.2 million crap shack would fetch probably $4,500 in rent.
These new investors realize prices are crazy in California:
“There’s too much risk with buying property in the Bay Area,” Guo said. “As long as the cash flow is coming and hitting my bank account, I basically don’t care about seeing them in person.”
Buyers like Guo are attracted to less glamorous regions where home prices and rents have risen at modest rates in the housing recovery. They’re eyeing steady income rather than rapid home-price appreciation.â€
And this is happening in many states:
This seems like a much wiser play in my opinion for a young professional if done wisely. Say you buy an overpriced crap shack in California with a 30-year mortgage. Your end game is what you see with many of the Taco Tuesday baby boomers. They have a paid off home but are largely living in a granite countertop HGTV inspired sarcophagus. A million dollar home that isn’t generating a cent – but still takes cash out in property taxes, insurance, and maintenance. And today, the starter home is junk in many cases. Or you can take that large down payment and buy say 5 investment properties out-of-state and in 30-years you have a nice steady stream of income coming your way. These new companies seek to deal with the hiccups many encounter when buying property from afar. Plus you have the mobility to move up the career ladder which may necessitate moving around. The days of staying put in one company for 30 years are largely gone.
However cap rates are getting inflated so deals are harder to find. In California, the mania is out of control and prices are now fully out of whack. Only the diehard house horny try to justify current prices and the easy default answer is “well look at the foreign money! They don’t care about math and will buy anything at any price. Incomes don’t matter when you have suitcases of cash.â€Â In their minds they somehow feel that foreign money likes to burn cash for fun. Money is coming in so long as appreciation continues. We are already seeing appreciation slow and guess what? The foreign money inflows are also slowing. I’ve talked with some of these wealthy foreign buyers and let me tell you something: at least those I have talked with, they absolutely care about making money.
Just like any apex in stocks, bonds, or housing the mom and pop investor is last to get in. Frothy signs are all over the place now. However, if you have the itch to buy it makes way more sense to buy a rental property that cash flows versus buying an overpriced crap shack that can run you $700,000 to $1.2 million. And guess what? Buying a rental property meets all the marketing points from the real estate industry. Clogged toilets in the middle of the night? Get a property manager. It seems like these companies are simply meeting a new market demand.
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71 Responses to “The rise of the out-of-state mom and pop investor: New companies seek high income coastal buyers for out-of-state investment properties.”
Here we go again. Case-Shiller 20 city home prices rise to 2006 record highs !
http://www.zerohedge.com/news/2016-10-25/case-shiller-home-prices-rise-2006-record-highs
This is nothing new, absentee landlording has been around forever.
This is mostly unwitting Millennials believing they’ve discovered some never before known market. Fly by night companies are selling the idea of something old as something new, what a surprise. There are no shortcuts, the government ensures it.
Just ask all of the accidental landlords created from the fallout of 2008.
Landlording is always first a business, the investment part being subject to the volatility of the former. Problem is that inexperienced people tend to think of it the other way around.
What’s being pushed on the radio here in the Bay Area is investing in multiple-family dwellings like apartment buildings (like are being built on every piece of vacant land here; they’re sprouting up like mushrooms) or some sort of scam where you’re supposed to invest with some screwball “rich uncles” – you know, like that “funny uncle” you had as a kid who always insisted on going through the Boy Scouts’ Haunted House with you and felt you up) and rent to “major tenants” like Sears and so on, because they always pay the rent … until they don’t, I guess, and the Rich Uncles have certainly felt up your wallet.
Plus, one of the big tract house builders, not Kaufman & Broad but one of those biggies, is running ads on the radio for a “house sale” they’re having, shades of 2005! Buy now before the price goes up! Etc. etc.
For the first time since 2012, the Richmond Fed business survey has been in contraction (below 0) for 3 straight months (and 4 of the last 5). Worse still, the six-month average of the business survey has not deteriorated this fast since Q2 2008. While the underlying components were mixed, inventory levels dropped (bad for GDP), average workweek tumbled (bad for incomes), and new orders re-plunged.
This is the worst drop in the six-month average of the Richmond Fed survey since Q2 2008…
But that cannot be right… Obama, Hillary, and Donna Brazile all said everything was awesome (in public). Anyone wants to buy a house as an investment at current prices under current awesome conditions????…
Y U attacking a good christian woman like Donna? She aint gonna stand fo’ dat! As a christian she knows all about persecution!
The problem with the out-of-state investment thesis is that America has bifurcated into the halves and halve nots. States like California and Washington are/were seeing massive real estate assset price inflation and respectable job growth. On the other hand, the low cost states in the middle of America are losing jobs, seeing declining incomes and no real estate appreciation. Does this sound like a better investment?
I do agree that owning a fair number of well selected rental properties for 30 years does build substantial equity over the years. But there is a lot of risk right now that the tier 3 cities will collapse over that time frame. I would buy in strong Tier 1/2 cities with low prices, like Chicago, Phoenix, Houston (after oil price bubble settles down) and maybe NC research triangle.
I would avoid anything midwest, New Mexico, and south east (other than Atlanta) like West Virginia or South Carolina and most of Florida.
I don’t agree with that. I believe the very expensive cities have the most risk. Think about! You put down $150,000-200,000 for the “privilege” to have a MillStone around your neck for 30 years and live the life a slave for the rest of your life.
Any financial earthquake and you lose the whole investment. You confuse DEBT with WEALTH. Having a mill stone around your neck is not WEALTH – it is a sure way to the financial abyss.
If you are in an expensive city and you bought decades ago when the interest was high and the prices low (by now most likely the house is paid off), then I would say you are safe. Buying now when the interest is at the lowest level and the prices at the historic peak is the path a of fool – the fool and his money are soon to be separated.
Better to buy with cash in a smaller town in flyover america that the first course of action.
I’m all for the flyover assuming you can get over the basic problem of there being NO jobs out there.
Set up a mail-order business, sell stuff on Ebay or something, and then yes you can make flyover country work.
For big cities, I can’t believe Chicago and Detroit can’t come back, and in spades. They have good land, water, are not going to become unbearable due to global warming, etc. The main problem is er, um, hostile tribes. You’re not going to re-settle affordable parts of these cities alone.
Those are big cities though. There are a myriad of small towns and smaller cities. I have soft spots for Davenport, Iowa (home of Bix Beiderbecke) and Alton, Illinois (home of Brad Carter AKA RedBoxChiliPepper and founder of the Phone Losers Of America) and there are tons of places with good land, good water, and good climate.
Good climate does not mean 70 degrees year around. Good weather these days means a winter where there’s snow and you get out the X-country skis and the kids have fun driving to the local drive-in with their snow machines. 4-seasons are great. I grew up with “no seaons” (Hawaii) and even there, the increased heat is making it uncomfortable.
Anyplace “sexy” like Austin, TX or New Orleans, I’d stay away from. Too many people also think they’re good places to buy in.
“Anyplace “sexy†like Austin, TX or New Orleans, I’d stay away from. Too many people also think they’re good places to buy in.”
Although I basically agree, the truly insane thing about Austin is that Texas is mostly 100% flat, build-able land in every direction – go 15 to 20 miles in any direction from downtown Austin and you are in the middle of raw, cheap, endless land.
(The Austin metro does have one hiccup – CA-style enviro restrictions to the west – but that still leaves miles and miles (and miles) to the N/S/E).
So the question is – where the hell are the builders targeting the informed, non-insane buyer market?
(Actually this question should be asked in 80% of the metros in the US – non-land limited, yet still seeing stupid levels of annual home price inflation).
I suppose the answer is that builders much prefer to pick the price-ignorant suckers off first – then when non-ZIRP interest rates destroy demand (and resale prices) among the central metro suckers – the builders can move on to rational prices/buyers in the suburbs/exurbs – no reason not to seize upon the stupid money while they can.
Still a bit premature to pull the trigger on those other cities in my opinion. The unravel is only getting started, even in markets like Houston where the oil bust has definitely softened things up. The giant problem staring at any real estate investor right now is that every unit of housing has been artificially inflated. If you find a quality property and a motivated seller, the numbers may work in your favor. Unfortunately we’re a long way from seeing significant selling momentum, the kind that will occur when the floor once again drops out of the equity markets and/or bond market. I think we may have low rates for quite some time, but it will be interesting to see how much liquidity remains when stock prices revert to the mean. The Fed has created another giant bubble, and there aren’t many accessible escape hatches…
http://aaronlayman.com/2016/10/texas-housing-market-meets-feds-game-thrones-economy/
I agree. Housing won’t be a leading indicator, this time, but I think think equities will be in real trouble after this election, no matter who wins, so next year will probably be the unraveling.
Selling momentum?
Good luck with that, even last time that dried up really quick… in 2010 there were excellent choices and decent inventory… by 2012 inventory was sparse.
During the next recession there won’t even be a foreclosure wave like last time.
“Investing” in real estate without getting your hand dirty? We all know how that tends to work out.
Yep it’s Saturday night and the toilet clogs, they call you states away and you call your go-to plumber, well, it’s Sat. night so they’re gonna charge a bit extra … that $250 you get billed you could have “earned” on your own just going over and fixing it. Those can and will add up.
alex, How many rental properties do you own (or make payments on) ?
Be Honest.
I thought so.
None! Which puts me out of the kind of risk your parents are in, in whose basement you live.
But I’ve been a renter, and unlike 99.9% of ’em I actually take care of the place I live in. I’ve seen how most renters treat their places and the thought that you can own property absentee and just rake in the dough without getting your hands dirty or running a slight loss because all your profit and more are going to a (typically shoddy, and hated by the tenants) management company is dubious.
“They have a paid off home but are largely living in a granite countertop HGTV inspired sarcophagus.”
Great line, it made me laugh.
I liked that too!
Housing To Tank Hard in 2016!!
It describes the people I work for to a T. Big house on a tiny lot, “snout house” configuration of course, although the garage is full of junk so the fleet of cars (4) typically park 3 on the 2-car driveway and one on the street. Lots of housekeeping and maintenance, so there are periodic multiples-of-10-grand repairs, like the functioning-museum early 1970s kitchen needed rebuilding, and the side fence finally finished falling down. Next is exterior paint and hiding cracks and dry rot under spackle first, that ought to dispose of about 20 grand.
The house is huge because you need a big house to keep all the tchotkes! There are two people who buy “collectible” art; rich people and stupid people, and these are not rich people. They have “collections” – rocks and minerals, little porcelain figurines, etc. Tons and tons of sewing/craft stuff. A room full of books. The piano that’s never played.
Plus there’s the time-share, the other time-share, the property out in the boonies, and the “necessary” vacations. This is how you barely keep your head above water on $150k in the Bay Area.
Its not all their fault. Sometimes you can’t stop your wife from buying useless decorative crap and hanging, storing or placing it all over the house. They have this insatiable, instinctive, avian need to constantly enhance and tend their nest. For instance, I have a stack of 20 wool rugs, but apparently I was going to be brutally murdered in my sleep if I didn’t pay for another $1000 wool rug, since the other 20 were “old an dirty”.
Slim – no f’n kidding. A couple-few vacations a year are a necessity (the wife is a part-time travel agent, optimistically may make enough to cover ’em but probably not) the timeshare is a necessity, buying new cars is necessary, etc. Plus the place is full of years of magazines amassed through subscriptions, who can turn those down?
The wife (of Mexican heritage) thinks Trump’s the answer because he’ll keep “those brown people, those Serbians” out. Also, if you ask her, the BART extension will enable people to go right to their house – bypassing hundreds of others – to burgle it.
Money-panic is continual. Every day’s mail holds horrors in the form of bills. One bill was hard to trace; it turned out to be $600 “donation” to that weird bakery that refused to bake a “gay” wedding cake and put out the word online for donations – as good right-wing whackos they donated. I laughed when I heard the bakery lost their lawsuit.
Exercise consists of walking to the mail box but only when the mail’s not picked up when walking in from parking the car. The live-at-home 40-something son got a mail-order bicycle and went out for a ride of a few blocks and came home dripping with sweat – whut? The bike weighs less than a sneeze.
It’s a very weird, distinct culture; that of deepest Suburbia. We all got talking about those very few who actually make the kind of money that’s talked about hi-tech workers making out here, over $100k a year. The sole proof that someone is doing well is they “drive a fast car”. This guy, that guy, they “drive a fast car”. That’s how you can tell they’re doing well.
I guess if I went to Joe Blanco’s “Start Again” program and bought a mustang with a loud muffler at 29% interest I’d be a sudden success; after all, it’s a fast car.
Alex is mostly right. But the house I grew up in (built in 1972) has a perfectly functioning kitchen and aside from looking a bit dated is in perfect condition. The original quality of construction determines if you’ll need major rebuilds after the initial 20-30 years following construction. A new kitchen won’t make your food taste any better. My own kitchen (in a house built in 1985) is perfect, aside from a small chip here and there in the tile. Dry rot can be hidden. But unless you have a very large house, painting the outside of your house (as my dad used to do) is pretty easy. For inside it’s best to hire a pro. Probably the only real scam when it comes to home maintenance is dual pane windows. Most codes now require double pane. The best only come with 20 year warranties. So at some point in 20 years you’ll need to replace them AGAIN, unlike single pane. Most home maintenance costed out over 30+ years is pretty reasonable on a per month basis as long as your family isn’t destructive.
“….might be a tiny bit more analytical than some of the folks I see buying in SoCal using lemming Hollywood calculus. ”
Dr’s Humor is same as mine, I Always get at least one laugh a post!
Shhhhh! This is my investment strategy. I own 4 houses and live in an apartment!
Haha that’s the way to do it …. something busts in an apartment *they* fix it, you have less housekeeping to do, etc. For the average person or childless couple, an apartment makes a lot more sense.
Exactly my situation. I own four rental in DC area and live in a rented apart in Florida. Currently (as we speak) selling two of the four and moving the money down to Georgia (where my daughter lives) in a 1031 transaction. Much bigger rental bang for the buck in Georgia…… Probably twice as much rent as I get in DC for the same investment. Cheers.
“”Investing” in real estate without getting your hand dirty?” The “investor” pays for property management, repairs, and maintenance, in addition to taxes and insurance, which reduces the bottom line. In 2005-2006, I spoke with people who were purchasing out of state property, and later wondered how that worked out for them. This is one more component of a euphoric/bubble market.
My point is referring to these “RE Investment” funds/clubs/groups/scams noted in the Dr’s post and all over the radio. You give them money, they invest in RE and you get a return? Perhaps, but it isn’t going to be much. Better off sticking the money into an index fund and letting it sit.
The only people making real money off these things are the people running these things, not the bag-holding investors.
A friend is invested out of state, in Memphis, through a company. They also offer Texas properties. I’m interested in both because my brother lives in Memphis and told me the cap rate is really good. And i lived in Houston 2001-2006. 4th Largest city in america isn’t going anywhere. there are definitely some deals to be had there.
The memphis investing friend bought the house outright through the company who manage it. He says the cap rate is 16% . Let’s pretend he can’t read a statement and it’s only 1/2. Still! And Nashville looks like a great cap rate too. My friend who lives here and owns investments says it’s around 8-10%
Which companies are ripping off the investors?
Bubble Pop – That’s exactly the scam, er, scheme they put forth. They say right up front that they make it easy to get your money back out “when you’re ready” which means when you’ve lost enough of it.
Ive been looking in the real estate in North Orange County (Anaheim Hills, Yorba Linda, Brea) for a couple years. I have not seen so many standing inventory in the past few years. Im generally looking at higher priced homes so perhaps the higher end is super slow? I wonder if anyone else has noticed the same or is it just me having some biased view???
Someone over in China is going to want a place that’s “turn key” and as for cost, it’s much less of an object than for a US working person, after all, this is money embezzled from the local Communist collective farm etc. The main thing is they want a place that’s in good shape, looks good, and has lots of 8’s in the price. A red door is a bonus.
So the place that needs a little work, that’s gonna sit. If you’re local, that’s the place to look for, and keep in mind always the golden rule: buy now because it’s that or be priced out forever! This time it’s different!
Hey Alex, check out these articles about the Corvallis Red Door landlord:
http://www.corvallisadvocate.com/2015/red-door-landlords-change-color-little-else/
http://www.gazettetimes.com/news/local/red-door-landlord-tries-going-high-end/article_63d35cda-8d7d-11df-b02f-001cc4c002e0.html
Sleaziest landlord in the whole state.
Joe R. – Apparently their own home is valued at only $500k so we should feel sorry for them, they’re probably living in a converted chicken coop.
In Corvallis Oregon, $500K buys a lot more than in San Jose. Crapshacks can be had for a lot less. The home of these scam artists is a lot less interesting than their business practices.
The Corvallis GT has had it out for the Schonings for almost 10 years now. The Great Recession and the wrath of an entire college town (and its small town news reporters) hasn’t been enough to run them outta town. Gotta give props… even if just to the strength of the Corvallis rental market!
SoCal — The damage they did in some of the smaller rural communities in the surrounding areas was real. But those houses mostly were foreclosed during the crash. In one town I’m familiar with, locals bought up the foreclosures for pennies on the dollar and did some fix-up. Also, the new landlords won’t rent to the folks that Bula would because they have to live with the tenants as neighbors (Mrs S’ family is from that town, i’ve heard). The strength of the Corvallis market drops off about 10 to 12 miles outside of town. I am only too familiar with that!
West LA is sloooow too. Rental signs sitting forever, properties flip flopping between sale and lease offering…..haven’t seen this since 2008.
your old crap shack figure of 700k should now be 800k.
Housing continues to be an absolutely horrible investment for most people. Sure you can make some money but after you factor in time spent with repairs and other crap, you would be better off getting a second job.
Furthermore with companies getting bought up left and right, who knows where you will end up. You either follow the work or you will end up working crap jobs forever.
First, you keep a notebook. Are you spending $300 a month at Starbucks/Fartawaybux? Keeping track of every penny will tell you this. I believe owning and renting out one house ideally gets you about $300 a month so there you go.
Working a 2nd job or hobby can bring in a grand a month. If it’s all cash, well, be sure to declare it all….
Let’s say your second job is for any kind of eatery, you may get low pay but eat for free.
Or say you wash windows for a 2nd job and now you can write off your vehicle (minivan) costs.
Anna, are you saying that the house you live in is a bad investment, or that buying homes to be a landlord is a bad investment?
I was intrigued by these services, so I decided to check one out. I had Investability run a report of available investment properties in a area of the IE am very familiar with and in fact currently own rental property there. From what I can tell they pull properties straight from the MLS and give you estimated monthly rental price, gross, and net yields. (There are no great deals or unicorns here) One of the properties they pulled I was very familiar with, in fact I had toured it a couple weeks ago. According to their reports, they are grossly over-estimating rents by 20-25% thus over-estimating the yields. Also their management fees are approximately double of any professional management company I have dealt with. All this being said I will pass. But I can see how someone who knows nothing about RE, doesn’t want to learn or get their hands dirty, and is not worried about maximizing the yield on their investment, might be interested in such a service.
Roofstock appears to sell properties with tenants already in place. I am always skeptical of properties with tenants already in place. I tend to feel like I am buying someone else’s problem. Rarely do I see a good rental investment property for sale with a good tenant in place. It’s usually some entrenched problem tenant who needs a lot of attention and is paying far less than market value.
I think the safe low crrime areas are going to go much higher if Crooked becomes president. She will let tons of illegals in the country and that will destroy every non-white area in SoCal. Those 1.5M starter homes in nice safe low crime areas are going to double fast. Even triple.
“Those 1.5M starter homes in nice safe low crime areas are going to double fast. Even triple.”
Jt, that would happen ONLY short term. By the end of her term, they will collapse because everyone will run for their lives. It reaches a point that even those areas become overwhelmed by the number of illegals.
Walls will get built, just not at the border but around communities keeping the 3rd world hordes out. What a bizarre, sick place this country has become, all thanks to the criminal leftists and their enablers on the right, all chasing the $$$ while cannibalizing the future.
No more “illegals” will enter than already do. Build a wall and they’ll get dropped off by a drone at Golden Gate Bridge. In any case- the racism, class-ism and fear-based hatred could definitely lead to a Johannesburg, South Africa style situation. Gated communities have prison level barbed wire securing the perimeter. We’re going backwards. Every Latin and South American I know, especially any without a passport, are especially law ABIDING by the way. Pay taxes, err on the side of stealing nothing, ever….because they are grateful to be here and contribute. Federal taxes too…..
Ideology doesn’t matter so much as surplus humanity and the ever-present tendency of humans, when resources are short, to divide up into tribes and try to kill off the other tribe.
Add in laws making it uncool to not kill off the competing tribe, and you get big problems.
Dropped off by a drone at golden gate? Every illegal you know follows the law – save for the one where they are in the country ILLEGALLY? Do you know how dumb you sound?
jt,
I sure don’t like the Crooked One, but she is a shoe-in to be the next president.
One thing is for sure. Those in the top 10 to 15% of the population (large investments on Wall St. and own RE on the coasts) are going to be the real winners here. Everybody else will lose…plain and simple. If there has ever been a time to vote with your wallet, this is it!
Agree with your assessment, Hillary will further blight urban areas with floods of refugees and third worlders who refuse to contribute in a meaningful way to the American fabric. This isn’t xenophobic it is simply reality. Where I own buildings in urban areas of CA they have changed dramatically in ten years, and not for the better. If Trump happens to win you can expect a lot of looting and destruction of property immediately after by violent urban dwellers. Make sure you have good property insurance, and an AR with high cap mags most importantly.
And goddamnit don’t waste ammo! That shit never grew on trees, and it sure doesn’t lately. What’s it now, like a buck a round? Get some training in, go out varmint shooting, learn to make each round count and not only when it’s calm and quiet and you’re laying 150 yards away from a prairie dog mound but in a more dynamic, almost “rifle IPSC” situation.
What happens if/when interest rates go up? I get spam email from realtors pushing commercial buildings with tenants/leases all the time. Most show a cap rate of 4.5 to 8%, depending on the quality of the tenant.
Just 10 years ago, you could get 4.5 to 6% on a CD from your local bank. No risk, no work etc. If/When interest rates go up, what will happen to all of these investment properties? Used to be no one looked at RE unless they felt that the cap rate would be in the double digits.
So you have an investment that produces a small return at great risk, if / when interest rates go up, you will have an investment that produces a small return at great risk. It will be valued vs. investments with similar returns and less risk (CDs, etc.)
Just want to thank you all and the Doctor.
I recently moved to a cheap part of the UK based on what people have said on here. Very pretty, higher standard of living and the prices are much better than the Cotswolds and Cheshire.
Anyway really enjoy your comments and I am planning on buying in April when Article 50 is started and house prices fall.
Election of Clinton all but assures homeowner ship goes away and large apt complexes go up even faster. That is what Socialist/Democrats always wanted public dependent on Gov. in return you get to live in a Cabrini Greens.
I know on a housing blog to post politics can get rough but I think this is the most important election as far as the economy. Trump, swallow hard folks but he is a mover and shaker, and if he fails fire him like the Apprentice in 4 years,
CLINTON we all should know after 26 years she is a second division manager, electing her assures another 4 years of losing seasons?
No worries, She is out now after the FBI opened investigation again. No way would they announce this if it was not an issue…
The elitist knew she was losing in the real polls, thus they decided to dump the corrupt bee with an itch. Now expect a tank in the market, maybe after inaugaration, maybe before
Housing bubble fears have returned:
http://money.cnn.com/2016/10/26/investing/housing-market-problems/index.html
JT you know I’d vote for der Drumpfenfuehrer if I thought it was going to do what he ways, but instead insta-citizenship will be available for $1000 check payable to his personal account, and he’ll wreck whatever he can, if it’s profitable. The last money in the hands of the middle class is in the hands of the white middle class so guess who he’s gonna work on sucking dry?
At least Hill’s got some old fashioned Joe Lunchpail union types hovering around, like Bernie.
I think in the one in a million chance Trump wins, he’ll screw over the American working class at least as badly as his hero screwed over the German working class in the 1940s.
You know why your life sucks? Look in the mirror. Your brain is so full of fail its not even funny. I’m sure you havent read any of the wikileaks because your confirmation bias would get destroyed and that bitter safe space of yours is just about the only thing you’ve got to your name.
Centuries ago you probably would have been sacrificing virgins to appease the volcano god – you have no ability to link cause and effect.
No reason to bring personal insults into a political topic that likely shouldn’t be discussed here, anyways.
I’m a Hoosier-born white male with a small business who’s health insurance is going through the roof. I also read news and blogs from all over the spectrum, from Marketwatch to Zero Hedge, and I’m not voting for Trump, either. People have different beliefs, ideas, and expectations, so cut the ridiculous vitriol.
Say it ain’t so. “Flip or Flop” Stars Tarek and Christina El Moussa under fire after complaints about flipping classes.
You just can’t make this stuff up!
http://www.ocregister.com/articles/classes-733381-zurixx-company.html
HA! I went to HS with her, I saw them once this year and twice at weddings last year. She is besties with friends. They are nice in person but like everyone else, they are cashing in on their fame.
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IMO if your dumb enough to fall for Trump University, Tarek & Christina flipping classes, or whatever other get rich quick BS is out there, you should NOT get your money back, but in fact should be stripped of any money you have left and forced to where a dunce cap while living the remainder of your life in shame. When are people going to stop looking for the “easy way” and “quick buck”? In order to be successful in RE or anything else for that matter you need to learn, research, do your homework, and a little luck doesn’t hurt. Problem is, just like the last housing crash, America can’t have “losers”. Now days the government bails you out or you sue on the grounds of your own stupidity. No one takes responsibility for their own actions. It’s like we have become a society of big babies.
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That was a hilarious article, thanks for posting!
If flipping houses was soooo lucrative they wouldn’t be on TV making $$$ and giving away their secrets to make $$$. They would be too busy making money hand over fist with their house flipping.
What no one ever talks about is the financing. Now that guy does nothing, sits on his butt and if they don’t pay him/her back they get a house at a huge discount! That’s the guy i want to be!
I wonder if Tarek is still replying to the talkirvine messaging boards. I felt as soon as the flipping shows returned to HGTV we were about 3-5 years from the sound of another bubble popping
Back in the Denver area, talked to someone in real estate yesterday who said there is still a lot of cash out there looking for a place to invest, so I’m not surprised by the point of this article! My primary residence is still in Denver, which is now a mini-L.A. sprawl, while my peaceful getaway home is in a part of the west just now beginning to boom! Point is, there is no place that has some attraction that won’t or isn’t being exploited! There will be a Starbucks on every corner and someone living in another city, state, or country, will be your landlord!
At one point in my life I was a lost millennial soul who was convinced i had to buy a rental property. I even convinced a few friends, one who already owns 2 properties at age 26.
As I toured places in my previous city (Milwaukee) I found a common theme, the cash flow was not what I required. I wanted 15% cash flow from operations. You put down a down payment you better be getting something out of it. I put in a few offers and basically got laughed at. THAT is when I REALIZED that I had already missed the boat on buying a rental property. What ever happened to having expectations or requirements for ourselves? Why buy a rental property just to have one? Overpaying will break your land lording business.
My friends are busy dealing with threats of legal action against them and becoming tool man Tim. Me, I come home from work a crack a beer and sit in my 1 bedroom WEHO apartment with no cares in the world. How are my stocks doing? Pretty good, they don’t call me at 2AM and I don’t have to show up to court to evict them.
The insanity is still going strong I see.
https://www.redfin.com/CA/Los-Angeles/13061-Hartsook-St-91423/home/5217625
Bought in May for $815,000, selling in October for $1,465,000. It’s on a street where a friend of ours lives. An older woman passed away and the house has been gutted and completely remodeled. Looks nice, but come on…it’s only 1,854 sf. Who is their right mind would pay that?
It’s Sherman Oaks, a desirable area. But still, it’s north of Ventura Blvd, north of the 101. For that price, I’d expect to be south of Ventura, up in the hills.
Sherman Oaks, Studio City, Valley Village…I grew up in that area, and it floors me that a post WWII modest cottage is going for these prices. We sold our luxury home on a hill in Ventura County for $1.XM and it was 4,000 sq ft, with a view to die for.
The one thing the east SFV has is tree canopy tress and some nice areas, but man, prices are ridiculous.
Home prices and sales up over last year and still rising in LA, but luxury market is softening:
http://la.curbed.com/2016/10/27/13437436/housing-sales-prices-los-angeles
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