Speculators Chase ‘Buy & Flip Schemes’ In ‘Tertiary Cities’
This San Francisco Chronicle report shows why the housing bubble is spreading. “For nearly 2 1/2 hours one night recently in Mill Valley, a capacity crowd of 300 people looking for the next hot real estate deal listened raptly as an insider revealed the best cities to buy bargain houses. None was in California. The back-to-back programs weren’t isolated efforts to woo investors and homeowners into taking money out of California’s pricey residential market.”
“‘The economic numbers don’t readily work here anymore,’ explained Michael Morrongiello, program director for a Sonoma investment club. ‘It’s tough for the average investor to acquire rental homes (or) multiple units, here in California and particularly the Bay Area.’”
“Not only will individual and institutional investors look beyond the Bay Area, according to the reports, they will even rummage through largely ignored tertiary cities. ‘I’m going to places the average investor doesn’t, such as South Carolina,’ said Mike Sarwri. ‘In California, you’re spending $600,000 or $700,000 for an average property..and you could take that money and buy four or five’ houses in Dallas or Oklahoma City.”
“But investing out-of-state is not without peril. Some late-to-the-game investors got singed last year when housing prices tumbled in Las Vegas’ torrid housing market. Last year’s condo craze also may have hit the wall. Preconstruction condo sales, one of the riskiest gambits for investors, left some speculative buyers with heartburn in Florida and Las Vegas. So did a glut of condo conversion projects in Miami and San Diego.”
“Other investors turn to facilitators such as Adiel Gorel, president a firm that matches investors with new-home builders. Gorel initially concentrated his efforts in Las Vegas, Phoenix and Orlando as California buyers sought refuge from the state’s sky- high prices. In the last year or two, those once inexpensive secondary regions have become ‘little bubble markets’ themselves and no longer offer good investment opportunities, he said.”
“‘Now I see a migration to the third type of market, which is a no-bubble market. Those markets did not participate in the bubble, and they’re the ones poised for appreciation,’ said Gorel. Gorel said his best bets include Austin, Houston and Dallas in Texas; Oklahoma City; Nashville; Montgomery, Ala.; and Charlotte, N.C. ‘You’re investing in the right market when you hear the name of a city and you feel utter and intense boredom,’ Gorel told the crowded room.”
“Two years ago, condominiums also started to catch the attention of investors, especially after word got out about the huge windfalls some received through preconstruction purchases. That preconstruction scenario attracted some three dozen people to the Walnut Creek meeting. The curious group saw picture- postcard scenes of warm Florida beaches and a mockup of a 15-story condo in downtown Clearwater; prices at the development; ranged from $406,000 to $1.1 million.”
“‘We have about 15 left’ to pre-sell, said realty agent Karin Udolf, representing the developer. The developer already has announced plans to raise prices by 15 percent once the construction loan closes, she said, with ‘instant equity for the investor of 15 percent.’”
“Both Emerging Trends and Marcus and Millichap’s 2006 apartment forecast urged investors to keep a close eye on the condomania, especially in regions where overdevelopment has produced an excess of properties. Almost 150,000 apartments were sold nationally for conversion into condos last year, according to the Marcus and Millichap report. The brokerage firm called condo conversions ’something of a wild card,’ because thousand of units could return to the rental market if buyer demand, and consequently prices, decline.”
“But the Emerging Trends report was less sanguine. While ‘Orlando and Tampa have lower-grade condo conversion fever than South Florida markets,’ the report said, ‘South Florida and Las Vegas may be disasters waiting to happen.’ Such downturns could hurt short-term condo investors who expected to sell quickly. And rental owners could see an increase in empty apartments and lower rents.”
“Emerging Trends also offered another word to the wise: 2006 is not the year for speculators and their ‘buy and flip schemes.’ ‘Tune out those infomercials,’ the report said. ‘Buyers should bypass neighborhoods and projects where speculators have been active until prices settle or bottom out.’”
‘We have about 15 left’ to pre-sell, said realty agent Karin Udolf, representing the developer. The developer already has announced plans to raise prices by 15 percent once the construction loan closes, she said, with ‘instant equity for the investor of 15 percent.’
I’m curious to know if folks in California can’t tell they are being ripped-off when hustlers are promising free-money?
Just wait until they try to rent them, like the Cali idiot advertising continuously on Craigslist trying to rent out a crackerbox in EULESS TX for $1,900 month! Can you imagine paying that to live in Euless TX? I’d pay that to NOT live there!
I believe it’s spelled USELESS, TX.
Man, these people make me sick. Give it up already! It’s over!!
‘You’re investing in the right market when you hear the name of a city and you feel utter and intense boredom,” Gorel told the crowded room.’
What he is implying is that the local oaffs don’t know there is money laying on the ground. I can just see the eyes of the crowd thinking they are on to something other know nothing about.
‘Elmer Hebert, 67, who operates a Newark, N.J., auto wrecking yard, has purchased a number of properties in less-than-glamorous locations over the last several years. His portfolio includes a 44-unit apartment complex in Snyder, Texas’
That’s right; it said Snyder. They have that statue of the albino buffalo going for them, and the burgeoning meth industry.
This is like the “100 million Chinese are clamoring to get on the internet” BS you used to hear pimping cruddy stocks.
1 billion Chinese, and 1 billion Indians.
I am a bit familiar with that region. Yes, You hear that figure constantly! All those between 9 month to 90 years will drive the market up.
Actualy still anywhere between 30-45% of the people have less than $2 /day.
It is the upper class and bit of middle class corening the new wealth.
We in USA has still some more time to get our act together, IMHO.
‘You’re investing in the right market when you hear the name of a city and you feel utter and intense boredom,’ Gorel told the crowded room.”
This is HAUNTINGLY like the now classic phrase:
“And if you believe that… I have some SWAMP LAND in Florida I would like to sell ya”
YIKES!!!
Nice full page ad this Sunday in the Miami Herald…”Own Land in Texas! Only $995 Acre, minimum 10 acres”. I’d love to know how many idiots in Florida will buy this sight unseen and get 10 acres of scrub with no road access, no utilities, etc. and make payment over the next 30 years with 0 appreciation. The biggest suckers are the folks from the bubble areas (California, Florida), who feel that they missed out on the easy money and are drooling for the next hot area. There was also a full page add for Condo’s in ASPEN…yes in the Miami Hearald! Greater Fools!
Nobody told this guy that ‘even the farmers’ around St. George UT have figured out the mania conditions…
Has anyone checked out the ‘cancer locations’ around St. George. They exploded an atomic bomb there in the 50’s , if I’m not mistaken. Are the sellers disclosing this in the paper work? Oh, it’s Utah where the caveat emptor still rules?
Ummmm, if they “pre-sell” all their units, what exactly will they be offering at these 15% higher prices? Why not raise prices 100% on an out-of-stock item for an instant 50% equity to investors?
What a bunch of shit. It just infuriates me. And this is supposed to be a demand market. What it is is a thieves market and there appears to be no shortage of greedy sheep to shear.
I agree!!!! Wow ! Do these RE marketers realy think that just because part of the country did not participate in this last rediculious run up that these markets in Houston and other places are sure to increase now. What a bunch of S–T people exist in this market. Let’s clean house once and for all and send this market to the bottom of the Grand Canyon!!!
But they DID participate, percentagewise if not in actual dollars. That’s what frustrates me so much.
Maybe things in Dallas are different, but Houston certainly did not participate, no matter how you want to measure it. Housing prices here have kept pace with inflation and that’s it.
Wait a second, podner. Are you trying to tell me that I’d pay the same for a house in the Montrose area or Galleria area, or Memorial or one of those cool architect designed places around Hermann Park that I would have paid 10 years ago adjusted for inflation? I don’t think so.
That’s what, 10% of the total market? BTW, Memorial is down the past few years.
I agree with Lou Minatti…I’ve tracked prices in two surburban Houston areas over the last 2.5 years, Lake Conroe area and South Shore Harbor. Completely flat prices, nice houses. Lots of inventory, and the builders keep building.
This ‘investing’ is an addiction, just like gambling but on a larger scale, and it will end the same way. It’s far more than just flipping homes. These people are addicts and housing prostitutes, and the people egging them on are their pimps.
Pole Star,
Addicts, prosty’s and pimps… I agree.
The other thing that these blind participants don’t understand is that “back in the day” there were low low interest rates and a hyper lust to make a quick buck.
Once the national story of the primo areas of the country are going BUST- along with tighter lending standards coupled with the fact that most average people won’t be able to purchase even the standard house in the so so towns and neighborhoods…
looks like a major scam to me!
I noticed that to . Isn’t it insulting . I would of walked right out of the room screaming “Con job con job .”
Rather….you remember the Frat trial for Delta House (Animal House)? Recall what they cough-said?
This is such a blatant scare tactic used to try and convince a potential buyer to jump in. I would look the salesman straight in the eye and tell him to “F@ck off”. If they can’t sell all the units at current prices, what’s the logic in thinking they will raise prices another 15%, especially when they start competing with re-sales from all the flipper/speculators. You have to be an idiot buyer to get pressured into buying under these kind of tactics.
this sounds SOO much like Europe …
when the bubble in hot RE areas like London and Amsterdam stopped expanding rapidly (around 2000 or so) it only started in earnest in other areas at a few hours drive distance, and prices have been increasing there ever since (often even more than in the original bubble areas).
The same can be said on a national scale for investments from North/West Europe spreading to the France/Spain/Italy/Balkan etc. once the primary bubbles had run their course.
“‘We have about 15 left’ to pre-sell, said realty agent Karin Udolf, representing the developer. The developer already has announced plans to raise prices by 15 percent once the construction loan closes, she said, with ‘instant equity for the investor of 15 percent.’”
I have no sympathy for anyone buying into this; in fact I’d like to see them interviewed when they buy and then two or three years later.
Tell these same idiots to buy Intel, which is sitting at a 3 year low, a company that is the market leader in its sector and makes money, and they’d scream that the stock market is rigged and crooked. Okay, this condo bs is all on the up and up . . . . . right . . .
Love your coments!
The reason Intel is at a 3 year low is because they are getting their asses handed to them by AMD. The entire computer industry is going multicore because of Moore’s Law and AMD actually invested in it over the last half decade while Intel sat on their asses. Now AMD is reaping the benefits of their foresight. They are years ahead of Intel. Investing in Intel is at best risky at this point. IMHO.
WS disagrees with you. I see lots of long Intel/short AMD pairs trades out there.
They’re both going down. I just upgraded my wife’s computer for $200 dollars. I won’t need a new computer for 4 years.
Yes, but there are many things besides PCs that require processors. PCs are a commodity now.
Listened to a report this morning touting Intel and how they are going to put a full court press on their competition with AMD. I think it’s clear that AMD is a second fiddle player to Intel and most computers use AMD processors as a cheap alternative…once Intel starts undercutting AMD, AMD is bound to lose market share. This is the best growth prospect for Intel at this point.
Am I the only one seeing the comedy in all this?
no…..I see it
wait, I’m not sure what I see…is the ‘comedy’ related to the debate on Intel v AMD v neither…and how this complexity points to why average Joe had a hard enough time making heads ner tails of where to place his bets with the dotcom boom/bust, and now really likes the idea of placing them on something hard and bricksbased and with the simple heuristic of “if it sounds tear-inducingly boring, buy”?! I have my money in cds and a 401k, but I gotta say that watching this exchange I first thought ‘oh yeah, intel at 3 year lows; why don’t I have a e-trade account?’ and then ‘oh yeah, amd is way on the cutting edge compared to intel, and I hate intel for it’s business practices anyway’ and then saw the short-term demand comment…I don’t know that people looking for bets other than vegas tables necessarily feel that the stockmarket is “rigged” so much as confusing compared to projections about land being an inherently limited resource, lol!
I worry that RE will need to take a really really big crap-out for it to lose it’s luster for a lot of gamblin’ folk…
cheers!
One market I cant figure out is Las Vegas. I spend alot of time there for business and may even move there in the next six months due to a business opportunity/job promotion.
I do not see why the rapid appreciation in this area. There seems to be alot of vacant land(I know it is govt owned but I hear they are selling it to developers pretty much at will). Meanwhile, incomes are relatively low. I can only blame this runup on mass speculation, but of course the economics dont come close to working out here either.
Does any one have a feeling on this area? I think I will rent for at least 1 year till I understand this area and this market more fully.
By all means, rent! In a couple of years it iwll be a steal.
The reason you can’t figure it out is that you might be a rational person trying to apply rational logic and rules to the LV RE market.
To understand it, you have to look at it through a warped view, maybe Kafka or H.P. Lovecraft. Then it might make sense.
Maybe LV Landlord will give you his, er, “unique” perspective on that market.
Just anectodotal, but I saw many ex-Kalifornians moving in. They had huge gains from selling back there, so overpaying 100%+ in Vegas was no problem. Oh, and there might be just a couple speculators in Vegas too.
There’s plenty of BLM land surrounding Vegas, but it takes quite a while to for the auction process and subsequent development to take place. Give it about 3 years and there will be plentiful and cheap housing for everyone.
I have just one personal example related to your statement, but I know it illustrates a great number of similar situations. A person who worked for me in San Diego sold his home in SD last summer (lower middle class type home) and was able able to pay cash for a nicer one in LV. He is doing a career change to teach High School and there were plenty of jobs due to the growth in LV and with his SD house windfall he will come out ahead, even with the lower income.
Look for rentals out the 93 toward Boulder City, and along St. Rose Parkway (146) south of town. There has been tremendous overbuilding out there, and a lot of the new development looked empty when I drove past there a few weeks ago.
let ‘em buy i say. these are the detrital feeders out looking for cigarette butts in the ashtrays.
The folks following these “herd” home buying programs are going to get burned, not because a particular city or location they are pushing WAS bad, but because it’s a herd of sheeple doing NOW buying there. Once they try to rent their new “investment” and 50% of the rest of the homes in the development are also for rent, there goes any positive cashflow they thought they might have received, and these rents lower than “investors” expected will lead to lower prices on the properties.
Everyone wants to get the big return without doing the work and research that is required to increase your chances of actually getting it. That’s what all these “investment program” vultures are counting on, the get something for nothing mind-set that so many people seem to be in these days.
Sorry, should have previewed my typing before posting!
The folks following these “herd” home buying programs are going to get burned, not because a particular city or location they are pushing WAS bad, but because it’s a herd of sheeple going to buy there NOW. Once they try to rent their new “investment” and 50% of the rest of the homes in the development are also for rent, there goes any positive cashflow they thought they might have received, thus the rents are lower than “investors” expected and will lead to lower prices on the properties.
Everyone wants to get the big return without doing the work and research that is required to increase your chances of actually getting it. That’s what all these “investment program” vultures are counting on, the get something for nothing mind-set that so many people seem to be in these days.
so true,
For a VERY short time, I helped moderate a daytrading chat room in the 1999/2000 mania. It scared me how much people are looking to be told what to do and will immediately blame you if things don’t work out. You couldn’t pay me enough to take that on. I don’t want these people coming after me with a gun when they lose their money. This Szabo guy who apparently has hosed all the Tucson speculators probably ought to get a bodyguard (lol)
The most overlooked area for real estate is IMO, Sanger, TX. The fools! They have section after section of undeveloped land and they are growing cotton. Can you imagine? What a waste! Hey, we could take out a HELOC and put 10% down and control the whole area. We can’t lose. Okay, who’s with me on this once in a lifetime investment opportunity? Guys? Guys?
Yeah, let’s buy up the whole town. I’ll bet Kim Bassinger would go in on it with us.
Green Acres, FSBO.
that one ladies top property is netting her $500/month? is that good?
At $44,000, assume PITI at about $400 - $500/month. So she’s renting each side of the duplex for about $450 - 500. Not bad. It ain’t gonna make you rich, but not bad.
I just hope she likes being a landlord and visiting Gary.
In SLC, I’m seeing signs all over the place that say “REAL ESTATE INVESTOR SEEKS APPRENTICE 1-877-XXX-XXXX.” There’s an annoying ad on the radio all the time that says “I’m sure you’ve heard about this hot Utah real estate market and want to get a piece of the action, but lack two things: money and the knowledge of what to do. With your good credit, you can make $40-60k in the next 6 months, blah, blah, blah.”
same sign here in the OC. Fluorescent orange/yellow. ‘handwritten’ black marker.
Yup, $20k month, but can’t afford preprinted signs. hmm.
Yea what is that all about, I’ve been seeing those too.
…same thing here in Broward County (South Florida). Hand printed sign on the grass median. Who would ever seriously call the number. Must be some real idiots.
This is EXACTLY the point I made yesterday.
The reason for all the run-up in prices in all these out of the way places is the “investor money” looking for a place to land. The SZabo? people and Carlton Sheets and “dolf Deruse, etc, etc, will continue this mania by telling their dumass putz losers to BUY, (invest) in cheaper areas.
And….they are giving them lists. With the internet, it’s getting easier and easier to find “under-performing” areas.
I don’t know how many times I’ve been told in discussions about the over-pricing of houses here in the Tampa Bay Area that real estate had be “undervalued”.
Imagine that, we undersold it for the past 20 years, and now it’s worth 2x the 2002 value…….
This will end badly for everyone.
His commercials have been on the radio here in Houston for a few months. His voice is like fingernails on a chalkboard. Doesn’t he sound like a nice honest man who only wants to help you get rich? After all, he “engineered a proven system”.
Anyone can just go to Austin and buy property but the fools want to pay someone to tell them to do it so they can feel “safer.”
I like this quote from Ben’s Deseret article earlier today:
“I look at some people here in St. George, and it’s phenomenal what they’ve done with real estate,” Wade said. “There is a certain element about real estate deals that is like gambling. It gets under your skin, and you want to do it. There is a frenzy that comes with it. You get excited as you do things.”
If they’re looking for a boring secondary city to buy in, they should look to Fort Wayne, where a Torrent of Homes Hits Local Market. There should be lots of properties in that torrent for clever Mill Valley investors to scoop up before the rest of the world descends on Fort Wayne.
Interesting. Torrent there =20% increase yoy. And w/6k homes last year in some portion of the foreclosure process. I expect that many areas would like only 20% increase. Say LV, PHX.
Did anybody see the article in the NY Times this morning about the young couple in San Jose who are taking out a loan to add a dining room to their house? The loan is 450k, which they are combining with their original mortgage, bringing their total mortgage to 1.2 MILLION. They have an IO loan with monthly payments for 6600k for the next 5 years, at which point they plan to refinance to a fixed rate. And wanna guess as to the jobs they have to do all of this? Husband teaches high school and sells real estate on the side, and wife is a full time realtor. Lots of luck to them and their new dining room.
1) What does a nearly half million dollar dining room look like?
2) How much do high school teachers get paid in San Jose?
Their dining room remodel apparently involves rebuilding most of the original home. They are adding 1400 sf to the original 1800 sf. They felt this was necessary to have space for entertaining their extended family during holidays. How many holidays do these people celebrate for it to be worth $450K? Also, why does a couple with three kids need six bedrooms? Between the three kids and hustling to make those mortgage pmts - when do they have time for all this entertaining?
Of course, they didn’t have time to ask themselves a lot a questions about the necessity of all this because “obtaining the loan took only 12 days, and the Karandikars wanted to get started. “We are happy with this,” she said.”
What they are happy with is the “interest on the final loan, to be closed when the house is finished, [which] will be “a half point or a point over the going rate at the time,” said Mr. Karandikar, who estimates monthly loan payments of $6,650. “We will do an interest-only mortgage for five years,” he said, “but it will be refinanced into a traditional 30-year fixed-rate mortgage before five years.”
In case any of you have been worried that a highschool teacher and a real estate agent may have a hard time earning at somewhere between 160K and 250K - worry no more because a banker came to their aid: “Most people have to borrow, but even if they are flush — millionaires, or couples who have sold a house and want to reinvest — they may still want to avail themselves of a construction loan. It’s an effective way to enlist the financial expertise of a banker.” “banks exert “controls that come with getting construction funding and help you, as a lay person, not get ripped off” by opportunistic contractors.” And, in case any of you ever doubted that bankers are part of the caring professions like nurses and teachers and the like: “a property’s value may increase during the construction period and lead to better terms for the permanent mortgage.”… “We allow the customer to go off the appraised final value, not the cost of construction,”…”So, a lot of times,” Mr. Goodwin said, “you get equity built in, based on the appraisal, and the customer can roll in the closing costs, the cost to build and the estimated interim interest so that, depending on the appraisal, the loan may come with little or no down payment.” How sweet.
http://www.nytimes.com/2006/03/26/business/yourmoney/26loans.html?pagewanted=1
Honestly, who can’t see the comedy in this?
In a sick way, yes….
“There is nothing wrong with your television set (computer). Do not attempt to adjust the picture. We are controlling transmission. If we wish to make it louder, we will bring up the volume. If we wish to make it softer, we will tune it to a whisper. We will control the horizontal. We will control the vertical. We can roll the image, make it flutter. We can change the focus to a soft blur or sharpen it to crystal clarity. For the next hour sit quietly and we will control all that you see and hear. We repeat: there is nothing wrong with your television set (computer). You are about to participate in a great (blogging) adventure. You are about to experience the awe and mystery which reaches from the inner mind to… The Outer Limits.”
PLEASE STAND BY
Yes, SLO….Housegeek posted it in the “What Goes Up Must Come Down in Florida” thread. We had lots of discussion there about this. Amazing story, isn’t it?
BayQT~
The San Jose couple?
the bubble spin is that remodeling is now called “investing,” “building equity.”
I call it consumption.
Remember the Grover Beach condo that was to be auctioned off last weekend? Bidding was to start at 274k, but the condo was to go to the highest “quality” bid submitted during the auction last Sat/Sun (March 18/19). However, owner stated in a newspaper interview that he fully expected to the $450k that was the condo’s “true market value”.
I went to the website (www.ABeachTown.com) to see if there was any info about what had happened, and found this notice posted:
The house auction was a success, but we are still open to offers in the $350,000-$399,000 range. Please email or call for details!
Damn, must have missed it (I was going to looky-loo on the auction). Oh well.
I would laugh hard at that couple & the bank that gave them the loan; however, that bank already sold the loan to Freddie or Fannie. Both Freddie and Fannie are subsidized by taxpayers. So 2 years from now when that couple went to BK court and Freddie/Fannie are in trouble, you & I end up paying.
Repetition is not evidence. Fannie and Freddie are government charter corporations that frequently and explicitly remind investors that there is no real or implied government gaurantee.
PBGC’s charter is to be funded by insurance premiums, not tax dollars. PBGC is also be short tens of billions of dollars, and will feel the pain when the baby boomers retire.
You think congress is not going to transfer some tax dollars over to PBGC?
I can’t help thinking this is what happened to the Hampton Roads, VA area. That mabye speculators 4-5 years ago that had been active in areas such as D.C. caught wind of the extremely low home prices just a short drive south and started buying in this area getting the snowball rolling until we now have prices that have increased over 100% in that time.
What people don’t realize is that there was a REASON that prices here were so cheap… it’s an ugly, slow-growing, low-income area.
Enjoy!
Ditto for all low dollar places. There’s a reason they’re cheap. It’s called NOBODY WANTS TO LIVE THERE! Who do these new age flippers plan to flip to? Baby Boomers who are blind and deaf?
I guess location means nothing anymore.
These are places where money goes to die. Any appreciation will be seen by the locals selling out to speculators, waiting a few years, then buying back at 50c on the dollar.
Yep. This is a fool’s market.
I dissagree. Places like Nashville, Charlotte, etc. have had and continue to have a lot of job growth and are a lot cheaper than other areas on the coasts. I can also speak personally for Nashville. It’s a cool town. I was just back there about 6 months ago and it’s even better than when I went to school there. Just because a town isn’t on the coast doesn’t mean it’s a lousy place to live/invest.
Your generalizations are as bad as the flippulators saying that they will make a killing buying in town XYZ because someone else told them so.
Just my 2 cents….
These flippers are going to get their clocks cleaned in Charlotte. New construction appeals to the hucksters because they don’t have to mess with peeling siding, yellow jacket nests, carpet stains, etc. Just buy– wait– sell for profit! Wow!! Easy, huh!!!
Meanwhile the locals will just buy underneath them from the builders.
Based on the situation here in DC, the condos furtherest from employment centers are the ones most vulnerable to the downturn in prices. the ones nearest jobs, i.e. downtown dc, or fairfax, say, are/will remain the strongest.
http://www.dcubble.blogspot.com
That’s true everywhere. Bubbly areas will be the last to drop, just like the best stocks were the last to crater in the bear market. There will never be a lack of demand in those areas, just a process of price discovery.
Come on folks get in now , there is only a few non-bubble areas left to invest in . If you don’t invest now there won’t be any left .We got the boring towns left and boy is the property cheap .These over looked areas are the next great investment . We can connect you will a builder/developer in these places so you will be the first buyer in pre-construction stage and thats were the money is.
“For nearly 2 1/2 hours one night recently in Mill Valley, a capacity crowd of 300 people looking for the next hot real estate deal listened raptly as an insider revealed the best cities to buy bargain houses. None was in California.”
Amazing how quickly they have forgotten that real estate prices in California always go up!
I thought the point to buying and flipping was to make a profit. If you sink your money into anything in Dallas at this time, get ready to lose money. If it’s a property close to downtown, it’s already priced well above what it’s worth. If it’s a newly built downtown condo, far fewer greater fools are waiting around to buy after you, and these things are already priced at $500 + per square foot, so good luck jacking up that price. And finally, if it’s a McMansion thrown up in some far away suburb - these places have had stagnated prices for the past 20 years, so good luck now that the rest of the economy is on the tipping point.
Like TXChic has been preaching for months and months on this blog - Dallas is one of the dumbest places to sink your investment money for real estate. If you bought close to downtown pre-2002 and sold last summer, you won, everybody else is chasing this market into the ground.
I remember going to hear Adlei Gorei back in 1999. If I had followed him then, I would have made quite a bit of money. He has done well for himself, and was a very pleasant person. But his ‘job’ is to sell houses. So he will do whatever gets someone to do that. If these sheeple don’t do their homework, they deserve to lose money. Boring town doesn’t equal big dollars.
School teachers would get paid about $50-65K. As a real estate agent, she will be making squat 0000 nothing NIL. And I want to see what a $650K formal dining room looks like. They must have really needed that room to make themselves debt servants for life.
I looked into the ICG investment club.
Alot of Adriel’s listings are financed with IO loans. That’s how he’s able to say they are ‘cash flow positive’.
I’m just back from dinner with friends in a tertiary city. One friend who is a realtor told me she just listed and sold a place in my neighborhood in the same day. She generally works only as a buyer’s agent and will only list places that past clients are selling. Things are still selling quickly here and prices are still going up.
I love the statement by this guy in the article, ‘I’m going to places the average investor doesn’t, such as South Carolina,’ said Mike Sarwri (from California). Boy, those California city slickers are pretty crafty to speculate on South Carolina properties. Guess the ga-zillion speculators on the East Coast aren’t as smart as the Californians who can spot a deal from across the country and buy sight unseen.