Venting or Rant, not sure (by Roy [AL]) Jul 29, 2021 10:45 AM|
Venting or Rant, not sure (by Gail K [GA]) Jul 29, 2021 11:07 AM
Venting or Rant, not sure (by Jasper [OH]) Jul 29, 2021 11:10 AM
Venting or Rant, not sure (by Gail K [GA]) Jul 29, 2021 11:24 AM
Venting or Rant, not sure (by RB [MI]) Jul 29, 2021 12:02 PM
Venting or Rant, not sure (by Richard [MI]) Jul 29, 2021 12:12 PM
Venting or Rant, not sure (by JB [OR]) Jul 29, 2021 12:20 PM
Venting or Rant, not sure (by MikeA [TX]) Jul 29, 2021 12:39 PM
Venting or Rant, not sure (by Robert,OntarioCanada [ON]) Jul 29, 2021 1:36 PM
Venting or Rant, not sure (by Roy [AL]) Jul 29, 2021 1:41 PM
Venting or Rant, not sure (by Allym [NJ]) Jul 29, 2021 3:18 PM
Venting or Rant, not sure (by Robin [WI]) Jul 29, 2021 3:36 PM
Venting or Rant, not sure (by dino [CA]) Jul 29, 2021 4:07 PM
Venting or Rant, not sure (by S i d [MO]) Jul 29, 2021 4:38 PM
Venting or Rant, not sure (by Sisco [MO]) Jul 29, 2021 5:22 PM
Venting or Rant, not sure (by Deanna [TX]) Jul 29, 2021 5:24 PM
Venting or Rant, not sure (by Ken [NY]) Jul 29, 2021 6:27 PM
Venting or Rant, not sure (by Barb [MO]) Jul 29, 2021 6:36 PM
Venting or Rant, not sure (by Roy [AL]) Jul 29, 2021 7:21 PM
Venting or Rant, not sure (by Ray-N-Pa [PA]) Jul 30, 2021 9:50 AM
Venting or Rant, not sure (by Roy [AL]) Jul 30, 2021 11:00 AM
Venting or Rant, not sure (by Donna [PA]) Jul 30, 2021 12:22 PM
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Venting or Rant, not sure (by Roy [AL]) Posted on: Jul 29, 2021 10:45 AM
From 2006-2018, I had no problem buying Class C and D fixer-upper type rental properties at prices ranging from $5K to $15K. Back then, when I wanted to shop for another house I would run my Handyman Ad in the newspaper and then numerous motivated house sellers would be ringing my phone with 24 hours. It seems now that my heyday or honeymoon with buying houses on the cheap has either ended or maybe I just need to change my own mindset about the way I go about making offers. In the past, I never had any competition when I made offers but I now I do and it is irritating me.
Since last January 2021, I have made offers on at least 5 houses only to be outbid by someone else who wanted that dump more than I did. And these people (who ever they are) are willing to pay at least $10K more than my highest offer. Just yesterday, I offered $25K for a house (which is a record high for me) and then some other buyer with deep pockets and no brains comes in and offers to the pay the asking price of $39,500 and steals this deal away from me. It pi$$es me off.
I do realize it is a seller's market right now but I had always assumed that was only in Class A and B markets. Today, I am going to look at another fixer-upper listed at $36,900. With these type of houses, it make no business sense to pay anymore than $25K for them. I am wondering now if it is even worth my time in making an offer on it.
Venting or Rant, not sure (by Gail K [GA]) Posted on: Jul 29, 2021 11:07 AM
It is happening here too (although I am not buying anything anymore).
Had one house up for sale in a "mill village" location. I have several in that area and some of the houses are "safe"; others are in places that you wouldn't want to be seen in not only after dark but ANYTIME.
This one was, frankly, a dump. You've got "fixer uppers" and "tearer downers" and this one was in the latter category. Hint: you know there might be a problem with property for sale when the ONLY available picture is the front of the house. It's like the real estate agent was afraid to go further (or perhaps they did and fell through the rotting porch).
In past times this beauty would be advertised for no more than 15K. It was now up for 69K. I sent the information to my real estate agent for a chuckle. The joke was on us. That thing had a contract on it within a week.
Venting or Rant, not sure (by Jasper [OH]) Posted on: Jul 29, 2021 11:10 AM
Same in my area now. Houses that would sell for $35,000 in good neighborhoods just 3 years ago are now going for $100,000. I am in my 70's, mostly retired from the rental business, but continue to do flips with a partner. That has been profitable even at the higher prices we are seeing. It's been a mind adjustment for sure. --71.30.xx.xx
Venting or Rant, not sure (by Gail K [GA]) Posted on: Jul 29, 2021 11:24 AM
The same thing is happening with rents. Last week one posted on Zillow for a 2 bedroom 1 bath at $750 rent.
This is very low rent right now but again, there were only 3 pictures of the place and two were of the bathroom (and even those were AWFUL). If you're only good room is a bathroom with mildew, peeling paint, what looked like a broken towel rack and a regular outlet immediately above the sink you might question the rest of the house. In addition the house was located way downtown in a very rough area.
Today the ad is gone; checking with the PM group that handles this stunner it is noted as "rented". --73.108.xxx.xxx
Venting or Rant, not sure (by RB [MI]) Posted on: Jul 29, 2021 12:02 PM
Just sold a 1- bedroom, SFH, for $185.000
Bought it for $22.000,
Stuck $6000 into it,
had rented it for 11- years at $800.
" I must be down in the front row". --199.192.xxx.xxx
Venting or Rant, not sure (by Richard [MI]) Posted on: Jul 29, 2021 12:12 PM
Yup, Prices are up here as well and supply is short. If you offer a place for sale it usually gets multiple offers inside 2 days. Rentals are non existent and rental prices are way up.
Let them bid for how much they will pay. It is a definite seller's market.
Since we know the real estate market is cyclical, NOW is the time to sell, especially any marginal or too far away properties. We can always buy more when the market shifts to a buyer's market. --24.180.xx.xx
Venting or Rant, not sure (by JB [OR]) Posted on: Jul 29, 2021 12:20 PM
Here I could expect to pay $250k+ for a teardown...and there might be over a dozen offers in on it. I'll trade ya Roy. --73.25.xx.xxx
Venting or Rant, not sure (by MikeA [TX]) Posted on: Jul 29, 2021 12:39 PM
Roy, in the C neighborhood I focus on I could buy a 2/1 WWII bungalow for about $25K all day long about 4 years ago. Put about $5K in it and rent it for $700. Today those houses are going for $75K and rents are up to $1100. Since the house prices tripled I would be fine with it if the rents also tripled but it's not happening. While it has been good for the ones I own, I can't justify buying more at the current prices so I sit on the sidelines and wait. I refuse to buy a house that has a negative cash flow. I'm sure it will turn around I just don't know when. --209.16.xx.xxx
Venting or Rant, not sure (by Robert,OntarioCanada [ON]) Posted on: Jul 29, 2021 1:36 PM
It maybe time to consider a multi residential building in a better area where if numbers are good then make changes. Here on this street a basic house costs around $750,000 and more depending on condition. Further south in the Greater Toronto Area a million plus for a similar house. Low interest rates along with increased immigration where the number of houses or condominiums stays the same but there more people buying where the laws of supply and demand come in. Suppose sold out all the houses then bought one larger multi residential building in a better area. Nothing stays the same where things change. Usually multi residential work out to price per unit where then the total price or divide by the number of rental units. --99.236.xxx.xxx
Venting or Rant, not sure (by Roy [AL]) Posted on: Jul 29, 2021 1:41 PM
With any Class C rental house purchase, my overall objective is to receive a min. 2% rent to value ratio. To do this, I always work the numbers backwards which gives me the most I will offer for a house.
I just looked at a house listed for $36,900 that is located in the same neighborhood where most of my rentals are located. To my surprise, this house was in great condition in that it did not reek of dog/cat urine and it appeared to have been just recently painted inside/out too. It appeared to be 'move in ready' but looks and fresh paint can be deceiving.
In this Class C- hood, this basic no-frills 2/1 house would rent for $600.00/month. That tells me the most I could offer for this house is $30K to achieve my usual 2% RTV ratio. My first offer will be $18K which is half of the asking price and most likely will be rejected or laughed at by the seller. --68.63.xxx.xxx
Venting or Rant, not sure (by Allym [NJ]) Posted on: Jul 29, 2021 3:18 PM
Uncle Sam has dumped a lot of money in for downpayments. People don't look at the work that has to go into them to live in it. --108.24.xx.xx
Venting or Rant, not sure (by Robin [WI]) Posted on: Jul 29, 2021 3:36 PM
Roy, I think the way the buyers are making those properties cash flow is through leverage. I started out paying cash, but now our choices are to either use leverage to achieve the same returns, or accept much lower returns. We've chosen neither and have invested in a couple of short-term rentals. We're also looking at industrial properties. I think a lot of people are sitting on the sidelines, waiting for a correction. Time to get creative! --104.230.xxx.xx
Venting or Rant, not sure (by dino [CA]) Posted on: Jul 29, 2021 4:07 PM
Sometimes people will accept a negative cash flow with the expectation of making up the negative cash flow and making their profit on the appreciation at the time of sale.
I believe that has been more realistic on the high end. I have not seen that very often at the lower end.
Of course, if we're in a bubble of sorts which I don't know, people don't always make what turns out to be the smart choice.
Venting or Rant, not sure (by S i d [MO]) Posted on: Jul 29, 2021 4:38 PM
Roy, welcome to "the new normal."
Rents are up. Houses are up. Meat is up. Fuel is up. Building supplies are up. The good news? Chicago Bears tickets are still down.... HAHAHAHAHA!
The point being, ranting is irrelevant. Venting is fine. You're among friends here.
I think the days of the $5,000 houses are over. You had a good run while it lasted. And you can continue to have a good run.
You now OWN a bunch of houses that were bought at dump prices and can be sold today for 3-4x what you paid for them and put into them. That's the other side of the coin. Sure, you can't find $5000 hosues any more, but I bet you can sell a house that last year would've fetched $50,000 for almost $100,000.
You're in good shape, my friend. Enjoy the benefit of the appreciation on your existing inventory.
I know you want to expand. Time to think about markets that haven't been going nuts. Commercial is still pretty beat up in my area, but it's starting to come back. Not all commercial. Retail space is still overbuilt and too pricy. But automotive shops, self-storage units, light manufacturing, etc? That's where the "cheap" stuff is. No, you probably won't get it for $5,000 because....well...it's commercial. But you weren't planning on buying and fixing $5000 dumps the rest of your life. If you were...bad strategy. You can't stay still. Gotta try something new.
I'm looking at nightly rentals. Specific, Lake-front ones. More info on that later, but the returns are amazing. I'm about done with residential SFHs. They're good bread and butter, but I'm ready for a turkey sandwich with gravy and apple pie!
Venting or Rant, not sure (by Sisco [MO]) Posted on: Jul 29, 2021 5:22 PM
I think that a good case can be made for falling prices in the future (I don't see a lot of new households being formed, I don't see new technologies making us more productive, I don't see a capable workforce, I do see a decline birthrate).
Or, if the Fed wins the battle against deflation, the price will double and double and double.
In the not to distant future, todays prices may look like a bargain, or a fools errand. --149.76.xxx.xxx
Venting or Rant, not sure (by Deanna [TX]) Posted on: Jul 29, 2021 5:24 PM
There are a lot of people who are trying to invest in my area because they can't compete in their areas. (Like, 100-400 miles away out-of-towners.) But they have no clue about my area. I suspect that the difference with (ignorant? desperate?) investors is even more stark as they try and break into the biz in some of the towns and cities of the above ll's--- since they're buying up all the wrong stuff that normal people wouldn't want during normal times.
The people I'm seeing aren't casual mom-and-pops looking for a place to get better than 0.5% in a savings account. They're actual investment firms. It makes it a little harder to grasp what their motivation is, to spend so recklessly just for the sake of acquiring something, even if the thing isn't sensible or desirable to acquire.
Those of us who build our business on acquiring the non-sensible and un-desirable... well... it's a good thing I've got a project queue, is all I can say. :P It will keep me occupied while this gets sorted out on a big scale.
I'm curious as to whether the people who have been through the cycle multiple times are able to see this as a normal part of the cycle, or if this is weird to them, also. --137.118.xx.xxx
Venting or Rant, not sure (by Ken [NY]) Posted on: Jul 29, 2021 6:27 PM
Deanna,this my 4th time through this cycle in my area.It is normal to me,maybe a little crazier than before but not a lot.My dad always told me buy when noone wants them and sell when everyone wants them so that is what i try to do,just gets frustrating now when i cant find anything at good enough prices to flip and keep guys working.Roy, $5000 houses are still around,you just need to keep buying stuff from people selling it themselves who are not concerned with making a profit,harder now since most know they can list it and get more than ever before.A couple years from now there will be plenty to choose from.Sid,took a ride around a couple lakes today that are summer rentals just to see the lakes but i am getting interested in vacation rentals.Young guy i am teaching the business who wants to be a property manager says he doesnt understand why anyone would want to do regular rentals when vacation rentals are so profitable. --72.231.xxx.xxx
Venting or Rant, not sure (by Barb [MO]) Posted on: Jul 29, 2021 6:36 PM
In my community, it is out of town investors dumping money and driving up prices.
I'm considering dumping one of mine that is outside of my target location and type. I've not decided yet. I calculated what I expect to net as profit if I sell it for what I think it will go for.
I'm not sure if I should sell now or not. I'm going to sleep on it. If I want to sell it, now is a good time. I wish I could sell it to the resident, but she can't get herself together well enough to get a mortgage. That said, she pays consistently. She had lost her job last year, and would fall behind, then catch up, then fall behind, then catch up. Currently back at work and paying reliably.
No matter what, she will get a rent bump in the spring when her lease renews. I didn't increase her this year, it went up a little bit the prevous year. She moved in the summer of 2017.
I'll have to really look closely next spring to see what market rents are. They will obviously go up. The out of town investors will be driving up rents. --149.76.xxx.xx
Venting or Rant, not sure (by Roy [AL]) Posted on: Jul 29, 2021 7:21 PM
I maybe in denial but I am not ready to accept this as the 'new normal'. There will have to be a 'correction' in the market before a new normal can be realized.
Not long ago, I made a post here where I mentioned not seeing any bandit signs or FSBO signs anymore. In retrospect, all of my past 'killer deals' where made with FSBO sellers and not through the RE agents that I am stuck with now. --68.63.xxx.xxx
Venting or Rant, not sure (by Ray-N-Pa [PA]) Posted on: Jul 30, 2021 9:50 AM
Money can be made by stepping the chain typically into a class C place. But this market place is plain old crazy.
Once a place goes vacant, I am getting them turned and sold instead of re-rented. I am not retiring, I am just right sizing --24.101.xxx.xxx
Venting or Rant, not sure (by Roy [AL]) Posted on: Jul 30, 2021 11:00 AM
Ray in PA,
Since I get a 20% plus return, my rentals are much more valuable as rentals. I sold 2 houses last year and now I realize just how stupid that was. I miss that monthly cash flow from those 2 houses and this is what is motivating me to replace those 2 cash cows. --68.63.xxx.xxx
Venting or Rant, not sure (by Donna [PA]) Posted on: Jul 30, 2021 12:22 PM
In my area we have transplants from other areas who come in an buy one house. That house is the dividend into as many rooms as possible with added bunks and rented out for 450 to 550 a month per room. A basement first floor and second floor generates quite a bit each month.
Then another house is purchased for cash and renovated. And so on. Houses here arent even on the market 24 hours and are bought for 30k over the asking for cash in a bag and remodeled in a matter of weeks.
Problem is its turning into a lot of undesirables in the town. --172.58.xxx.xxx
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