patrick.net

The reason I remember things vividly because I’ve always been in the market every year for the last plus decade. I bought and/or sold real estate every year. I remember buying a 10- and a 12-unit buildings in 2018 and I went all out with my cash. I told myself what am I doing buying at the top of the market here? While Bruce insisted the market still had more room to run.

I know what numbers Bruce monitors to call the top and bottom. He was right the peak was not in based on his set of parameters, but things seemed so frothy then. In hindsight, one building turned out to be a great deal, and one is a good deal. I already got 38% of my money back on one building and 72% on the other after 3 years of ownership. The formula works. Don’t doubt it. Just rinse and repeat.

Eman says

From what you know about him, did he advise people to get out, or don’t buy in 2005-2007? Did he advise people to buy during the downturn?

He's not a real estate expert but he did advise people to sell their excess properties early 2022. His other investment advice has been pretty good also.

What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

GNL says

What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

Fed will fail to control inflation at the current rate of interest. So, it will continue to raise interest to get a handle on inflation. 6% +. Corporations will continue to fire employees, firings will accelerate. IT collapse will continue. Insider sales of stocks continue, no insider is buying stocks. Election season is not too far. How much pain can the American consumer take?

Eric Holder says

clambo says

After a certain level of wealth, you can afford fancy hotels for every day of your life; why own a castle in addition to your beach house in Malibu?

This is what Musk realized (and acted upon).

Billionaire Weirdo Nicolas Berggruen reportedly sold his homes, keeping only his clothes and his jet, and now lives carefree in 5 star hotels.
If he negotiates the price it might only be a grand or two a night and is certainly much cheaper than owning large homes.
It might be how I would play it.

Robert Sproul says

Billionaire Weirdo Nicolas Berggruen reportedly sold his homes, keeping only his clothes and his jet, and now lives carefree in 5 star hotels.
If he negotiates the price it might only be a grand or two a night and is certainly much cheaper than owning large homes.
It might be how I would play it.

I'm pretty sure I would do this exact thing. Maybe one house in a dream location so I can entertain family and friends.

GNL says

What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.

With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.

If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.

Billionaire Tod Spieker just bought/added a 224-unit apartment complex in Sunnyvale for $106M to his portfolio. He must know something the average Joe and Jane don’t. I’ve met Tod in person several times at JPM events for real estate investors. Really nice guy. He shared what he does for free too. He lives in Atherton. He has one rule though. Regardless how busy work is, he has to be home by 7pm and have dinner with his wife. John Sobrato, who owns like half of downtown Cupertino, also lives in Atherton. Nice guy too. 😂

His SIL is a commercial agent in my market. Nice guy too. I’ve done 5 deals with him.

https://www.siliconvalley.com/2023/01/23/sunnyvale-housing-home-apartment-real-estate-buy-develop-build-tech/

Eman says

GNL says

What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.

With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.

If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.

Billionaire Tod Spieker just bought/added a 224-unit apartment complex in Sunnyvale for $106M to his portfolio. He must know something the aver...

do you buy now in this market? or its just that 20% vacancy rate formula as only criteria? ive been eyeing frw properties, but cap been very low.

do you just buy full cash, or seed 30% down relying on positive cash flow less mortgage?

FortwayeAsFuckJoeBiden says

Eman says

GNL says

What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.

With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.

If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.

Billionaire Tod Spieker just bought/added a 224-...

I’m always a buyer or seller for the right price. With that said, I haven’t bought any apartment since last year as the numbers don’t pencil out. Sellers haven’t capitulated while interest rates are high. Now, I’m looking at adding new units on my oversized lots. If I can be all-in at $200k/unit, and it’s worth $275-$300k/unit, then it’s worth the efforts.

I budget $600/sqft for the building, engineering, permit costs, etc…. If I can get the cost down to $500/sqft. Voila. The reason it should cost less because I don’t have to pay for land.

I’ve never paid all cash for apartment buildings. Even with this new construction, I’ll obtain a construction loan. The lender requires I put in 45% of the equity towards new construction. They’ll lend 55%. The cash flow on the building should be able to cover the debt service of the construction loan so there’s no stress on it. Once done building, refinance it into a permanent loan aka a fixed loan rather than an adjustable construction loan.

https://www.reddit.com/r/realtors/comments/10p8ku8/buyers_want_to_make_a_ridiculously_low_ball_offer/

Buyers want to make a ridiculously low ball offer I don’t feel is justified. How to tell them without offending them? It’s low enough that I don’t think they are serious at all and may just be using me to throw a number at the wall. These people are acquaintances of mine and in our friend group.

zzyzzx says

https://www.reddit.com/r/realtors/comments/10p8ku8/buyers_want_to_make_a_ridiculously_low_ball_offer/

Buyers want to make a ridiculously low ball offer I don’t feel is justified. How to tell them without offending them? It’s low enough that I don’t think they are serious at all and may just be using me to throw a number at the wall. These people are acquaintances of mine and in our friend group.

We made an offer on a place that was 15% below ask. They all got hoes mad and huffed and puffed, saying they already had a much better counter offer. We rescinded, they took the other offer, it fell through probably during inspection, and they eventually sold a few months later just a bit below what we offered. We then proceeded to find a much better place for less a bit more rural. 80% of listings are overpriced by at least 10%-20%

mell says

They all got hoes mad and huffed and puffed, saying they already had a much better counter offer.

Fictitious other offers are always a problem.

I know Patneters are skeptical of “real” offers, but we believe the agents we work with are honest with them.

Recently, there’s a 10-unit building listed for $2.85M. The agent contacted us. We said price is high and in a fringe area, not interested. Seller got an offer for $2.5M shortly after, but declined. We thought the offer was reasonable given the high borrowing cost and its location. We told him to convince the seller to accept it.

No other offers came in for a couple months. The agent reached out to us and begged to write up an offer that we’re comfortable with. We said $2-$2.2M at most. He wrote it up. Next day, a $2.65M offer came in from some agent. The seller accepted it. That’s how it goes sometimes. We trust the agents we work with. We don’t believe in ghost or fake offers

For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.

https://www.reddit.com/r/RealEstate/comments/10qcqxb/would_you_buy_a_house_where_someone_committed/

Would you buy a house where someone committed suicide?

zzyzzx says

Would you buy a house where someone committed suicide?

If it was the real estate agent, it'd be a gimme.

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

zzyzzx says

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

What does that mean?

GNL says

zzyzzx says

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

What does that mean?

Means that people want to get out of real estate, but can't because the fund limits redemptions to avoid a free fall.

zzyzzx says

GNL says

zzyzzx says

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

What does that mean?

Means that people want to get out of real estate, but can't because the fund limits redemptions to avoid a free fall.

"Redemption", meaning they can't sell their stock/interest in the fund once a limited amount of real estate inside the fund has been sold?

Eman says

For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.

I assume you are going, maybe you can give us a brief report?

For every 1% increase in the 30 yr mortgage rate, there is a 10% drop in price.

Peak housing prices were set at around a 3.25% to 3.5% rate. So if the 30 year mortgage rate settles around 5.5%, then housing needs to at least drop 20% to 25% from peak pricing levels.

Also, the home price to household income ratio should be around 4 for a 30 year mortgage rate of 4.5% to 5.5%.

The ratio is 5 for a rate of 3%, based on my own experience securing a VA mortgage in late summer 2016 and what the regional bank mortgage broker stated, in addition to total monthly payments (principal+interest+insurance+taxes+HOA quarterly assessment) not being more than 37% of household income.

The mortgage broker reminded me I was foremost buying monthly payments as the bank owned the home until the loan was paid off.

A $400,000 mortgage would correspond to an annual household income of $100,000 to $133,000. Granted, a buyer may make a 20% down payment for a $400,000 home given they may have proceeds from a previous home sale, stock sale, etc.

Median household income was around $72,000 in 2022.

Median sales price is around $467,000 in last quarter of 2022. It was $329,000 during first quarter of 2020 :-/

I knew I should have bought a home in Kindergarten and not wait until First Grade. I blame the teacher.

cisTits says

zzyzzx says

...and now we get to hear some bullshit Housing Expert story that flies into the face of data.

What about falling prices?

cisTits says

The average 30-year fixed mortgage rate spiked to 6.39% today, according to Mortgage News Daily, having bounced by 40 basis points in two days off the low of 5.99% on Thursday, giving up a month worth of declines in two days.

Good. Mortgages need to go up to 7.5% to 8%.

Eman says

For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.

I did attend his meetings years ago.
I like his academic style presentation with supporting research.
He is a very good motivator.

Home-Buying Companies Stuck With Hundreds of Houses as Demand Slows

https://archive.is/BXokx

The boomers are sick and dying thanks the the vax and being old. Give it a couple years and the mass glut of boomer property on the market will swamp potential buyers with cheap housing.

https://finance.yahoo.com/news/biden-one-size-fits-plan-150000623.html

Looks like Biden is trying to put a lot of smaller landlords out of business. They will sell their housing stock.

https://www.reddit.com/r/RealEstate/comments/10vq9a8/do_hoa_dues_ever_go_down/

Do HOA dues ever go down?

zzyzzx says

https://www.reddit.com/r/RealEstate/comments/10vq9a8/do_hoa_dues_ever_go_down/

Do HOA dues ever go down?

Does Pope shit in the woods?

https://www.reddit.com/r/FirstTimeHomeBuyer/comments/10x4qxg/hold_your_ground_when_the_listing_agent_comes/

Yesterday morning, our offer $13k under asking was accepted. Yesterday afternoon, they “received a full price bid” and were going to be so kind as to let us match the full price if we really wanted the house. We “regretfully declined” to increase our offer at 5:00pm

This morning, at 8:57am, our offer was accepted again.

Rent is going down. This will help as far as government reported inflation (i.e., CPI). Stocks should fare better with a lower inflation report this month. Silver and gold may not fare as well unless dollar index (DXY) significantly retreats.

https://www.msn.com/en-us/money/realestate/us-asking-rent-cools-to-near-one-year-low-in-january-as-demand-wanes-supply-grows/ar-AA17kH1C

,

ad says

This will help as far as government reported inflation (i.e., CPI).

It's the perceptions of those polled regarding owner equivalent rent that is used in the CPI. Don't expect much in terms of accuracy from the sheeple.