Forget nreonline. Look at the trends in your market. ALL RE investing is local. There are apartment deals wherever there are apartments, but we’ve got to know what’s happening in our local market to recognize the opportunities.
Meantime the folks who pay attention to national trends are lenders, large commercial investors, and REITs. Unless we’ve got $100M to invest and are looking at national opportunities, nreonline’s news is just a curiosity, but offers no game-changing information for us localized investors.
The question remains, “What is a good deal in our market?” We find that out by analyzing dozens and dozens of operating statements from properties in our farm area. That way we can recognize the hidden opportunities in our market that nobody else can see. This isn’t brain surgery, but it does require some research.
Let me illustrate just what knowing your market could mean. When I owned units in Kansas City, we loved California investors. Why? Because they were taking our 10 caps and slobbering all over them and paying cash. Meantime, the locals that took the time to understand the market would buy at 16 CAPS and sell to ignorant Californians (said as a California investor myself) for 10 CAPS. So, for us, it was buying from the desperate and selling to the ignorant, and pocketing the spread. I make that sound easy, huh?
Meantime, the secret to getting good deals is scouring the market for offline deals that nobody knows about. That’s also the open, dirty, little secret, that few talk about.
So, learn your market, start digging where the apartments are, make offers, and start equity-strip-mining for deals.
Wow I just wrote a long comment to this, but it made me sign in again and i lost it :banghead
I’m not writing all that again but here’s a quick overview:
the short answer is yes, it will lose it’s luster.
-this rent growth is unsustainable as wages are rising only moderately (if any)
-many new construction projects in the pipeline that are going to hit in 2013/2014+ so demand will lower
-cheap debt has birthed an over-saturated buyer pool. unsophisticated investors are overpaying for real estate and justifying it on a yield perspective instead of an IRR. Meaning, they get descent cash-flow, but at the end of the day they will sell at 0 gain if not a total equity loss.
-fiscal cliff (yeah i said it)
have fun and buy smart, or don’t buy.
That was the gist of my earlier post, albeit far less eloquent.
Thanks everyone for the varying opinions it is good to hear both sides on a topic. Great example javipa with the Cali investors for KC properties.
In my opinion apartment won’t lose its luster but the gains we have seen in the past couple of years will start to slow down. How can people pay 7%+ increases in rents if there income isn’t going up? At some point the math just doesn’t add up.
I don’t think the MF sector will fall off a cliff or anything… but it will lose it’s luster in the near-ish future. I think 2013 will be strong, maybe 2014, then we’ll see the phase out. Rent increases will slow down, concessions from competing lease-ups will rise, if we see some economic growth then the “renter by choice” tenant profile will begin to purchase homes again. Eventually we’ll see negative rent growth again, meanwhile debt rates will rise and with it cap rates will rise, everyone who bought an artificially compressed 5.5% cap will be selling at a 7%+ cap – which means they’ll be under-the-gun when it comes time to sell or refi their 5/7/10 yr notes, thereby increasing MF defaults. If/when this happens, the CMBS market will be in trouble again, maybe even another bailout – who knows… The only certainty is that our recent growth is not sustainable.
The aggregate of these I would call “losing it’s luster” :biggrin
The MF sector will definitely fall off a cliff if the government lets us fall of a cliff. In fact if the government fails to reach a deal then would be positive news for MF. In my opinion we will still see robust growth in the MF sector, maybe not as strong as the past couple of years but see strong. It’s not like the banks are lending enough to really drive the housing market forward. Wages are also not increasing to the point of a full return to single family.
Your question is so broad, it’s impossible to answer it.
Tighten that sucker down a couple notches, and let’s try again!
What kind of real estate investing? Cash flow? Appreciation? Forced Appreciation. Rehabs? Turnaround? Repositioning? Buy, hold, and die with the most toys?
One way to do these loans is to pick up a gap lender to pay the down payment, their fees are a bit high but if there is enough room in the deal you can still make money on these type of deals.
Sorry if this is not the right place to ask a question about apartments since I did not see anything that said ask a question.
I wanted to know if anyone has purchased the small apartment course from Lance Edwards and if anyone has actually made any money using
the course.
Thanks
There are a few programs out there that let you buy Commercial properties with little or no money down, but they are not easy to find. For instance, we loan up to 95% of a property’s purchase price, but for programs like this, there must be at least two years of strong and verifiable income, and the borrower must have decent credit, and not have any bankruptcies, foreclosures, or tax liens against them.