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Dark clouds are forming over the market

14,260 Views | 84 Replies | Last: 5 yr ago by quailpro
vette
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mwp02ag said:

Check out Old Capital Podcast for some fantastic multifamily syndication discussions. They have a huge event coming up in September in Dallas where you can go meet and start networking with leaders in the apartment world. I unfortunately have a commitment that is keeping me from attending. I'd love to meet up sometime to discuss real estate and goals. Never know what might happen from that.

I have some big things to get wrapped up this year and then I will likely join the Brad Sumrok or Lifestyles Unlimited groups to get rolling.


Going to this conference... looks to be awesome
Harkrider 93
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My link probably won't work. Basically says we aren't anywhere near a 2008 debt problem. Does admit that we have a big government debt issue and are in unprecedented waters.



https://www.nationalreview.com/2018/08/george-will-prediction-of-economic-collapse-wrong-conditions-different-from-2008/
mwp02ag
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scrap said:

fdt00 said:

Don't join a group....do it yourself


Ditto!!!! Not a big fan of Lifestyle Unlimited, but to each their own.
What do you have against them if I may ask? Specifics from interactions or just from a passing glance?
mwp02ag
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Awesome!! You'll have to report back and let us know how it went.
scrap
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mwp02ag said:

scrap said:

fdt00 said:

Don't join a group....do it yourself


Ditto!!!! Not a big fan of Lifestyle Unlimited, but to each their own.
What do you have against them if I may ask? Specifics from interactions or just from a passing glance?
For me a passing glance. I went to one of their recruiting seminars. Very gimmick sales presentation with the sense of urgency to sign up for their education....NOW. Maybe I am jaded but I consider myself very experienced to begin with and what I saw was the focus on the newbie and over sale the dream for a fairly large commitment.

Since I love real estate investing and I love to give advice as well, I mentor friends and even strangers and I do it without compensation. I see young sales people pushing their education system and in reality I wonder just how much experience do they really possess.

Lastly, there are so many free resources, without any conflict of interest that my recommendation for newbies is to research it on your own, find a mentor who has done it and willing to share. There are a lot people out there willing to do that.

However, to each their own.

Cheers.
mwp02ag
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Oh I don't like the hard sell/call to action either and I wouldn't consider it for SFR, but the jump to apartment syndication is a a completely different deal and believe it will fast track that....if your goal is to be a lead.

That said I've got a lead on a 18 unit distressed property that I think will be a great deal if I can find the right group to work with on it.
Nutmegger
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Where exactly are there any duplexes that aren't located in sketchy, unsafe areas of BCS that are also under $200k?

And I actually moved out of a duplex and into an apartment just to feel safe walking my dog, and to also not hear people ALL the time (yes, the apartment was actual much quieter). There are no "luxury" duplexes or nicer duplex communities with HOAs that I know of, so wouldn't they simply continue to attract the wrong crowds and thus lose value (or in the case of an explosive market - raise value at a much, much slower rate than a nice SFH)?
scrap
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Nutmegger said:

Where exactly are there any duplexes that aren't located in sketchy, unsafe areas of BCS that are also under $200k?

And I actually moved out of a duplex and into an apartment just to feel safe walking my dog, and to also not hear people ALL the time (yes, the apartment was actual much quieter). There are no "luxury" duplexes or nicer duplex communities with HOAs that I know of, so wouldn't they simply continue to attract the wrong crowds and thus lose value (or in the case of an explosive market - raise value at a much, much slower rate than a nice SFH)?

There are a lot of duplex areas that are predominantly student housing and very safe. More so in College Station than Bryan but some in Bryan as well. You put a qualifier on price 200k but when you compare it to apartment living your comparing buying to renting, I don't get your point. If you allude to capital appreciation it can be debated which asset class (Duplex vs SFH) appreciate better, but for most investors that is missing the point. The focus of duplex investing is the positive cash flow that is generated monthly, which is more important than the capital appreciation which becomes the icing on the cake.

The primary buyer of a duplex is an investor. Therefore the overall driver in the purchase is the POSITIVE CASH FLOW generated. Emotions are more in play in a singe family home (SFH) especially if owner occupied, where as emotions play a reduce role when considering a duplex. As such, most if not all duplex areas in the Bryan College Station are occupied by renters and not owners (although you will find a few owner occupants).

As been pointed out on this board, and accepted by me, is that I am pro duplex ownership regardless of age. However, some of my friends misconstrued that stand to mean you should spend your entire life LIVING in a Duplex. Duplex ownership serves the investor and can be a very effective tool to acquiring real wealth and certainly enable one to produce Predicable and Sustainable Income, especially for retirement, from which people have few sources of Predicable/Sustainable income.

You won't find as many "Luxury" duplexes because duplexes have been used to target low income housing solutions, and for investors that usually means a larger pool of renters to keep your property occupied. The craze of luxury student housing in College Station IMHO has been extremely over built and prices to rent by the room have come down putting more pressure on the lower income solutions like duplexes.

Your experience having better living conditions in an apartment vs a duplex is unusual unless your paying more for an apartment. Equivelant rents usually between the type properties favor a duplex over an apartment if you don't value the added pool, fitness room, ect. Parking at your door, possibly with a garage, private yard and usually more sqft give the nod to better conditions for which to live. Usually not climbing several sets of stairs and having someone live above/below you also favors duplex living. Exceptions to rule always apply. I find more duplexes in Austin that certainly give the nod over apartment living. In BCS I do see where some apartments may offer better conditions as you have indicated.

Cheers.
vette
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mwp02ag said:

Oh I don't like the hard sell/call to action either and I wouldn't consider it for SFR, but the jump to apartment syndication is a a completely different deal and believe it will fast track that....if your goal is to be a lead.

That said I've got a lead on a 18 unit distressed property that I think will be a great deal if I can find the right group to work with on it.


I am interested. Can you email me the details?

Vette587100@yahoo.com
mwp02ag
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sent!
SteveBott
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I get market updates from lenders and here is one of the latest


The major economic data released this week was roughly neutral for mortgage rates, and a speech by Fed Chair Powell contained no surprises. As a result, it was a quiet week, and mortgage rates ended a little lower.



The housing market data has been somewhat disappointing this year, and the reports released this week did little to improve the outlook. In July, both new and existing home sales decreased a little from June. For existing home sales, which make up roughly 90% of the market, this was the fifth straight month of declines, and they were lower than a year ago.

The inventory of existing homes available for sale fell slightly from June to a 4.3-month supply. A 6-month supply is considered a healthy balance between buyers and sellers. Sales of new homes fell to the lowest level since October 2017.

A number of factors have contributed to the loss of upward momentum in home sales this year. One big reason is a lack of inventory in many regions, especially for lower priced homes. Single-family home construction is essentially flat from a year ago, and it is not meeting the demand at the lower end of the market. Builders say that rising land, material, and labor costs are obstacles to a faster pace of construction and make adding entry-level homes less desirable due to lower profit margins. For decades, single-family housing starts averaged about 1.1 million per year. Following the financial crisis in 2008, however, this figure fell to a low of 350,000 in 2009, and now is holding steady at levels around 850,000.

Demographic changes are another cause for slowing home sales. Younger people today often place a higher emphasis on mobility than they did in the past. They acknowledge the possibility of quick job changes and value the option for living in different cities, which favors renting over owning. They also tend to want to live closer to downtown or other popular neighborhoods, which often are more expensive. Surveys indicate that millennials today are more likely to wait until they get married or have children to settle down and buy a home.

The takeaway is that home sales may have stalled for a while, but this does not mean that the underlying housing market is weakening. Knowing that buyer demand is there, home builders are diligently trying to ramp up production. The economy and the labor market remain quite healthy. Younger people may be waiting longer on average to purchase homes, but this is simply postponing demand to the future. In short, current economic conditions may have combined to temporarily dampen home sales, but there are plenty of reasons to be optimistic going forward.



Looking ahead, the second estimate of second quarter gross domestic product (GDP), the broadest measure of economic growth, and Pending Home Sales will be released on Wednesday. The core PCE price index, the inflation indicator favored by the Fed, will come out on Thursday. In addition, Treasury auctions on Tuesday and Wednesday could influence mortgage rates.
scrap
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Steve, thanks for that nice report and I do think your analysis is solid. I certainly like it and hope the outcome rings true.

Although most sectors of the housing market the last 8 years have been very strong, this report bodes especially well for those either buying on the low end of the market for occupancy or investment. Low end rental risk remain low and predicability of rents steady.....just the way I like it!!!!

You should be proud of me, I didn't even use the "D" word.

SteveBott
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Yea but you probably thought of the D word twenty times reading that update.
scrap
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SteveBott said:

Yea but you probably thought of the D word twenty times reading that update.
Probably more than that!!!! LOL!
SteveBott
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Seriously though this economy update is provided by a very big mortgage lender so it is legit as these go. It does not predict the future. It does provide good data and identifies the coming weeks reports that could impact short term rates.

It is truly macro data and has limited value to a specific property in Texas
quailpro
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Ranch real estate has slowed as well. Stock market has a lot of money tied up. Usually, August-Sept. sees a lot of action in ranches, due to the hunting season, but not this year.
 
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