[Escoguy]

I think the basic premise would be that seniors 55+ (OMG in 3 years I’m there) would move from larger homes to smaller units which are easier to maintain/lower utility bills/have more amenities close by.

This is probably a longer term play. Data would show up with:

relative increase in portion of larger homes 3/4 BR+ on market
potential for more demand for smaller units (Condos)

I think it is a relatively small portion of the population which will
1) understand this 2) research the move 3) act on it

There may actually be some public records which will show the number of applications etc. My guess would be less than 10K persons would do this, but then it occurred to me, there may be places like some parts of greater Orange County/Pasadena where prices are higher than SD. It may put some regional arbitrage in play, still that on balance would slightly pressure relatively higher end markets. Long story short, impact will to raise the floor at the low end put a slight amount of pressure on the higher end legacy markets. Probably a health thing on balance.

[Escoguy]

You became the owner of the place you were living in which created winners and relatively larger winners. Mostly the Soviet apartments. The do require some maintenance and have a mixed history but still offer value.

We bought a new construction townhouse outside of Moscow. There aren’t many of these, gated community etc.

[Escoguy]

My wife is from Ukraine so that’s an almost.
It does have an impact as at a practical level they would treat her as one of them.

[Escoguy]

I’ve owned a house in Russia going on 17 years. Same tenant for 13 years, we’ve been through 3 economic crisis already, the US had two of them.

In general owning a foreign property can be very rewarding if done correctly.

The rent I earned in Russia allowed me to buy four more homes in San Diego back in 2013.

Rents in Moscow are lower now. I can’t imagine they are so high in Columbia but you never know.

Side note, we had a tenant give notice in 4S in our smaller unit there, but found a new one in 2 days. So demand is there, I still think many landlords aren’t so responsive.

For my next one, the seller finally declared bankruptcy today, so hopefully will close on that in 90 days. Learning a few new things so far but it looks good.

[Escoguy]

It is interesting, it’s been a long time since I rented so when everything blew past the $3K mark, it was a bit of a surprise. Most decent houses are now in the 3.5+ range. So I expect 4K will become more common.

When I look for 4BR 2500 sf, I only see about 15 houses county wide less than $4k. So I’m guessing this will cause those with lower payments to stay put.

One tenant just gave notice of wanting out of the lease early, she understands she is obligated.

Have about 6 inquires in 1 day for a 3BR in 92127 4S at $3500.
So no issues with renting I think, had preferred to keep on the spring to spring cycle though.

[Escoguy]

I’ve probably always slightly under priced, by say $100 but then get good quality.

I did have one recently, no 3/4BR SFHs were at the $4K price point in 92127 so I listed at that price and boom the next day 3 came on the market.

Still managed to lease out in five days with a $100 cut. I don’t think big moves are needed, just be responsive. I find most tenants prefer to deal with landlord directly vs mgmt company. In 15-20 years, I may have to reconsider if I want to do that though.

[Escoguy]

70 offers! wow, I feel like mine was easy with 10

Even if I (we) don’t respond to these updates, it is actually very helpful you do them. Not that I’m planning any major actions other than the one I have under contract.

But am thinking of looking at condos closer to the coast in not too distant future.

🙂

[Escoguy]

Now we are under contract to buy from a seller who is declaring bankruptcy:

Anyone with experience with this? Will the trustee honor the contract?
It is arms length? Was agreed in early August, prices are up 1-3% since then.

[Escoguy]

Finally closed, on the new house in 4S ranch 92127,

It took seller about two weeks to find a replacement property, so total transaction time was about 7 weeks.

a few takeaways:

1. make sure your realtor knows if it is a PUD/condo of SFH to avoid a rate switch
2. anticipate an extra 7-10 more for lenders being backed up now
3. some sellers want a per diem if the sale is delayed, best to negotiate up front to avoid.
4. even if people (anyone is mildly annoying) always be nice, you may need them later again
5. the home we got had 10 offers on the first day
6. two homes close by sold for 11K and 43K more within weeks
7. some agents are underpricing homes and getting way above ask
8. renting out was relatively painless and quick but I think we are more responsive than most
9. rent covers payment without Mello Roos (plan to pay that off next year)
10. everything I learned during the transaction, I don’t see much in 92127 2000 sf below 1M and don’t see market softening anytime soon
11. some people are better communicators than others

[Escoguy]

Ok, so closed on the new home in 4S on 30th (Wed).

Rented out by Monday at $3900.

Tenant offered to pay full rent up front, told wasn’t necessary.

What I don’t get:

1. why some owners post their home materially below market
2. why some homes sit for days without movement despite many inquiries/applications.

Maybe we just move faster but my impression is that some leave a lot money on the table by not knowing the market and not responding quickly. Not really sure I should complain as maybe that makes my life easier.
Cheers.

[Escoguy]

Flyer

Admit buying in this environment is new for me. Easiest path is to let everything I have run and take long vacations in Europe with the kids.

First SFH bought in 2000, second 2003, then 3 in 2013 and one in 2104.
Two are paid off, four with loans have 60% equity and rates avg 2.75%.

Glad all yours are all paid off, that is plan B for me.

I think I can do 15-17 annual% ROE vs the 2.75% cost of mortgages (both pretax) by buying a new one. Given market dynamics, we are walking into a day one equity of 35K which has given us a buffer.

Baseline plan was 1% appreciation for 10 year period. I’ve now upped it to 1.5%. But still project 175% return over 10 years with 1.5% annual appreciation and approx 150K of principal pay-down. If we see a 20% price collapse, then of course these assumptions go out the window, but still hard for me to see a scenario where I lose money over 10 years.

[Escoguy]

I do a daily sinus rinse. A young man I know tested positive last week, my wife was briefly at the house (5 min), they both did the daily sinus rinse and are ok.

Wife never showed symptoms, probably won’t bother to test.

A guy I work with went to dinner with three men, they all tested positive, he did the daily sinus rinse and didn’t test positive.

I know it’s anecdotal but hey.

[Escoguy]

Itsddd

I manage everything myself: purchasing, refinancing, tenant screening.
I also work.

My wife manages repairs, does painting herself where possible, landscaping as needed. But I wouldn’t want to give the wrong impression, most years, it is very manageable, but we did spend like 30K on our oldest home (built in 2000) two years ago, and now it’s like a brand new house again.

A 5/3 in 4S, at 3500 sf would be about $4600-$7000, depending on upgrades etc. I personally probably wouldn’t plan on more than $5500 but there are clearly those who can and will pay at the higher range of that number.

I’ve been reviewing rental list prices and it seems like 4S has a few categories:

1) 3BR+ detached, the detached condo types which are 1400-1600sf and go for $3000-$3500.

2) The next level is often in the $4500+ range and usually 4BR plus.

Our new one is about to hit the market in about two weeks at 1900 sf with 3 full sized bedrooms plus one small bedroom which can be an office. Plan to ask about $4000.

I spoke to a few managers last week who had some of the smaller condo sized units still on the market and they wouldn’t take pets, some of them had approved an applicant but something changed.

3) Dream home, Santaluz category: With some individual listings of 7-10K per month. But you’re usually out of 4S proper at that point. Would need to do the math a few times before jumping on anything like that.

As far as MM, it’s a very different demographic, school district, you may be a touch light at $2300 but if everyones happy why not.

I tend to make small changes with current tenants, usually in the $50-$90 per year range, more often $50. Usually wait for a tenant to leave to make a bigger jump. If I don’t have a qualified person within a week or two, I’m mis-pricing it. There appears to be too much pent up demand.

[Escoguy]

I’ll admit I’m feeling a touch adventurous.

I close on a new rental in 4S in about a week and have another one under contract, as the seller is in a BK, might take a few months.

So far, every time I have one open up, I have a strong qualified tenant with a good solid job come in within days. I may have to make a minor compromise and allow a dog but we know how to deal with that.

For all the talk of isms’, we don’t have the choice to shut things down, interest rates are being held down, there is limited new inventory and new construction. A relative of mine used to work in the Treasury dept in Washington, he explained basic policy to me about 15 years ago. The government wants consumers to feel “wealthy” with rising home equity so they will borrow and spend. They don’t want a high savings rate and austerity for fear of a contraction.

So combine that and we have the effect of housing inflation, rent inflation but now many underutilized people, unemployment fortunately not too high here but regardless of who wins, they have to keep the game going.

[Escoguy]

Also glad you are safe, my wife has VIN 3333 on her 3.
Perhaps consider a Y.

Also appreciate the added commentary.

You are right, buyers are coming in hot out there. After we contracted in 92127 4S, two came on the market and were both gone in days, one 30K above list and another listed (same floor plan as ours) at 23K higher and probably went for 10-15K above list.

Can’t always predict when that will happen. The real number of days on the market was like 3 as it just took time to sort the bids.

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