I was on a conference call yesterday with about 15 other fellow investors. I didn't have that much to say for most of the call - just sorta stayed quiet most of the time....at least till the tail end of it.

The topic was - gloom doom and not being able to find deals. Lots of complaining was spoke but not too many solutions were provided. It was a bit annoying and even a bit depressing. I spoke up and asked the question, what types of problems do you like solving?

Cures for cancer exist for example - but they are expensive. Cures for hang nail also exist, but since it isn't life threatening they are not expensive. If you get good at solving more costly problems, you will be making more money. How do you figure that out? Ask where the pain is at and how much something hurts.

Folks people will still be dying, divorces are going to occur, people will Relocate, addiction will occur, people will get new jobs, and people make bad decisions. There are opportunities, if you are willing to look a bit better than the next person.

So many people think you make money during the good times in real estate, but I have a great deal more money during the bad.

When I grow apples in my yard, and it's a normal year, I'm swamped with apples in August and September. Some years, though, a late freeze or a bad wind storm in the spring will eliminate any chance of apples five or six months later. But between shipping things from the opposite side of the planet, as well as Controlled Atmosphere Storage, we're used to not only eating apples during harvest season--- we get them year round.

Real estate is kind of similar. Rather than trying to force it to operate like clockwork-- I want to buy five flipper houses for 20% of market value every month--- it's easier when things grow more organically. Sometimes it's a good time to buy. Sometimes it's a good time to solidify what you have. Sometimes it's good to just sit back and save, so that the next time opportunity arrives, we're in a good position.

That's not to say that opportunities don't arrive unexpectedly--- because we make our money when people have a problem that can be solved by selling a house they don't need, and they just want $x to do their thing, rather than waiting for someone to offer full market value. Someone dies and leaves them with a house in a state they'll never visit. Someone is wanting to follow their dream. Someone's dream has changed, and the house they thought they'd need is now a burden. Those scenarios don't care about current events, although current events can accelerate things, especially in cases like tax sales and bank foreclosures.

I'm still working my way through my project queue. Hopefully I'll get a call to go pick up my windows soon that were ordered back in January, so I can get my duplex moving forward. DH is being very kind and is ruthlessly sorting through the junk left behind at a garage apartment that used to be owned by someone who ran the local hardware store. Between those two lots, I have five units that will eventually get on their feet.

But I'm also pausing to solidify what I have. I dropped $7k on a new cha system at one place. We bought it in 2012, and installed a used system for $3k, knowing it would last about 7-8 years, but we were working on a shoestring at the time and just needed something operational. It turned out to be just under 10, so that was nice. Getting quotes on re-decking a compromised garage roof before the rottenness compromises the entire 1100-sf garage + workshop. (Last quote came in at about two years' rent... I clutched my pearls and put it off for a while to see if prices would improve. But alas, only the rot increased.)

I was looking into a new kind of deal, a home for rich people. And according to government statistics, the family making between $250,000 to $500,000 a year. Who else can afford to buy a 3500 square foot home on a 25000 lot?

These homes sales have been dropping in price because of rising interest rates. When rates were under 3%, these home were exceeding $1,500,000. Now at the higher interest rates, prices are hovering around $1,150,000 to $1,350,000 and dropping.

For the first time in years I see desperation on the owners faces. They got a jumbo loan with little to nothing down. Remodeled their little slice of heaven.

Instead of having only one entrance owners installed half round driveways with and entrance and exit gates as well as a second garage. No more Mercedes, Porsche or SUV as a send or third car. I see pick-up trucks and Tesla's.

With a 1500 square foot guess house, I can get an additional $3,200 a month income as I worry about paying the monthly $15,000 mortgage, taxes and issuance.

Of course since L.A. tenants don't have to pay rent until April 2023, even a mega huge house with a barn, pool and spa will have challenges collecting rent.

"Growth is good. But forced growth, or I-gotta-grow-or-else-my-biz-will-die is less healthy."

The folks complaining that there are no deals are the ones who haven't adjusted their mindset to current prices.

So what if the house you could buy 2 years ago for $50,000 now costs $100,000? If it's renting for $1,500 a month, that's STILL a good deal! And if it's worth $130,000 next year, what is there to complain about?

People keep saying things like:

"The market is nuts!"

"Prices are too high to find deals!"

Whatever! Your grandparents would've said the same thing 5 years ago. "Houses cost $5000 when we were growing up" is old-folks talk.

Here's the deal: prices are going up....always, with only two exceptions since the year 1900: the Great Depression and the Housing Bubble. One lasted a long time because the Fed refused to print too much money. The other one was quick relatively (2 years) and then the market rebounded because the Fed did the opposite and printed a ton of money.

Which of those two scenarios is going on today? I'll give the naysayers a hint: look at inflation.

I'm find deals in commercial more than ever. Why people won't look into it is beyond me! Just found a nearby building with excellent traffic flow (20,000 cars per day) for sale: $650,000!

Oh nooooooo.....soooooo expensive! There CAN'T be a deal here!

Well, it's 2600 square feet with a parking lot large enough for 35-40 cars.

So here's my plan:

Subdivide that building into a small used car dealership (50% of sq footage), then the other 1300 square feet I will further subdivide into mini-salons/tattoo shops/essential oil extraction sales. Each one of those single-person businesses only need about 10x13 space to cut hair or buzz a tattoo on a person's arm, so I can have a car dealership on one side and about 10 "mini-units" on the other.

Dealership will rent for about $1500 / month.

Each mini-business unit rent will be about $250 PER WEEK based on another nearby site that does the same thing or around $10,000 per month.

$11,500 per month for a building that costs $650,000 and maybe $100,000 infill to convert the units. That's 1.5% Rule on a commercial property. Yes, I'll pay some utilities, but only during the daytime when the business are open and a pittance at night. If I do a good job with the refurb/infill, probably get some good tax credits/incentives to max out the insulation, etc.

So yes, there are no deals here.... for those who refuse to look or think. It's been too easy for too long. Investors got lazy picking up houses, knocking the stink off them, and renting them all with tons of cheap money. Anyone can do that. It takes a real investor to see the potential no one else sees and profit!

Sorry, did my math wrong... small car dealership will rent for about $1500 per WEEK, not per month. So make that $16,000 per month against $750,000 "all in" costs. 2.1% Rule, baby!

I heard it said at a REIA meeting quite a while ago, and it stuck with me.

You get paid in proportion to the difficulty of the problem you can fix.