Some of today’s post comes via inspiration from conversations I have sometimes with one of my Starbucks buddies. Our conversations are wide ranging, which at times becomes the catalyst for some serious thought when it comes to real estate investors and investing.
‘Course, since random is the theme today, pictures shall be congruently random also.
Gray Bomb
Though I’ve written here often on what drives my decisions to recommend one property/region over others, it still boils down to the same basics it always has. Jobs, job creation, commerce, etc. The continued migration of large population segments from the north, most of the midwest, and the northeast towards sunbelt regions is still strong and will continue to be. No surprise there.
The phrase Gray Bomb though, will begin to have more and more meaning and impact upon real estate as time does its thing. Boomers are now pretty much graying right in front of us. I know, ‘cuz I are one. Though there’s absolutely no gray on my head. (Thanks Schick) They’re making life decisions regarding their retirements, which are impacting the economy in general, and real estate markets specifically to an ever growing degree.
This isn’t new of course, but it’s beginning to become a much more important factor in how Brown and Brown views data these days. When shrapnel from Gray Grenades land in concentrated bunches, it’s news the real estate investor should follow with real interest.
The New Reality For San Diego Income Property Owners
If you’re one of them, you already know the jig’s up. Unless a buyer plans on living in your units, investing in them is foolish on every level. They’re too old, over priced compared to the income they provide, and the informed buyer can acquire 2-5 times the property elsewhere for the same amount of cash. A speaking of gray? If most San Diego’s small income properties were any older, even termites wouldn’t want ‘em any more.
What does this mean to you? Simple — you need to find a local real estate investor who disagrees with this assessment, and let them buy it. Take the proceeds and tax defer them (1031) to one of the growth regions outside of California. This isn’t a close call, and you know it. So bite the bullet, and get it done. The longer you wait the greater injury your inflicting upon your retirement. And yes, it’s that simple — and that crucial.
Our Experience So Far In Texas
Since our first foray into Texas, beginning last year in Austin, we’ve expanded into various locations on the southern border of the Dallas/Fort Worth Metroplex. Our clients have already invested in several million there and in Austin. (Just three properties in Austin so far.) The vacancy rates have dropped while the rent-up time has shrunk to almost no time at all. Most of our Metroplex transactions are closing escrow with renters there, or about to move in. Very cool. Rents are already up too — by 2.5% since we began buying. Works for me.
Inspectors are finding the normal minor problems, which has been a huge blessing in disguise. It’s been nothing short of inspiring the way the builder has lived up to his word — in spades. One time, due to a scheduling snafu, they responded with three people to gang tackle any problems on the spot. Though the original scheduling screw up wasn’t their doing, they put a killer smile on our client’s face — half a world away on another continent. It was seriously impressive.
Our clients are still getting title policies paid for plus an additional 2% closing cost credit on almost every transaction. One client was literally able to buy an extra duplex with his savings. How cool is that?
We’re now inches from opening up the region just north of the Metroplex — in more than one development. We’re busy shining our boots for our on the ground visit in the next few weeks. I can already taste the chicken fried steak and garlic mashed potatoes. I’ll have to increase the cardio part of my workouts by about 20 miles daily. Geez.
Where We’re Pokin’ Around
We’re eyeballin’ a couple different parts of the Kansas City area. No answer yet. Columbia, South Carolina is pinging our radar fairly steadily these days. If you’re from around there, or know somebody who is, have them contact us, so we can speed up the normal process. Also, there is serious interest at the Brown and Brown think tank in parts of North Carolina. We’re doing the research now, though we like to error on side of slow but sure vs fast and sorry, know what I mean, Verne?
And don’t tell anyone, but we’re tryin’ to sneak into a certain pocket in the northwest, a previously fenced off area, at least in our thinking. Cool place and all, but the price/rent ratios have been for the birds. The rest of the year is gonna be taken up with airport logistics, and rackin’ up more frequent flyer miles.
And that’s all the random I have in me. See ya tomorrow, especially those wanting to talk about their future — that’s spelled R-E-T-I-R-E-M-E-N-T.
Related posts:
- Random Sunday Thoughts — Invest In San Diego? Nope
- San Diego Real Estate Investors — How’s That Income Property Workin’ For Ya So Far?
- San Diego Real Estate Investors Try To Avoid Saying ‘What Was I Thinkin” 5 Years From Now
- San Diego Real Estate Investors — Some Reasons to Invest Out of State — Try Texas
- San Diego Real Estate Investors — Being Dumb Like A Fox — Don’t Retard or Delay Retirement
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