KaiBear said:

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Just went under contract for a new built 2 story home.

4 bed, 3 bath
2000sf finished
850sf unfinished basement.

Tandem three car garage .
$ 532000

By the time I finish the backyard , put in fencing , central air , window coverings , upgrade the flooring and cabinets looking at about $ 570,000


Will rent for $ 2800 a month initially then $3000 the following year.

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that math dont math for me

That may be your market, but the ROI is not great

muddybrazos said:

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Redbrickbear said:

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You have to feel for these people… truly.
Inflation is the tax of all taxes… they say inflation has gone down but that’s a lie.
They’ve removed data from inflation collection therefore showing it’s gone down but the overall fundamentals continually go up which is hurting still

— Mickamious (@MickamiousG) March 13, 2024

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She looks attractive aside from the crying. Go get a husband and have him help you with the bills.

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Marriage rates are in collapse all over the Western world.

Is not so easy.

Many women want to get married but can't

https://thehill.com/opinion/finance/567107-the-end-of-marriage-in-america/

[While it may not have ended, marriage in America has unquestionably declined over the recent past and is now at historic low levels for the country...

Since the start of the 21st century, the U.S. marriage rate has declined from more than eight marriages per 1,000 down to six marriages per 1,000 population in 2019. That marriage rate is the lowest level since the U.S. government began keeping marriage records for the country in 1867.

Also, 70 years ago a large majority of U.S. households, approximately 80 percent, were made up of married couples. In 2020, the proportion of households consisting of married couples fell to 49 percent.]

4th and Inches said:

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KaiBear said:

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Just went under contract for a new built 2 story home.

4 bed, 3 bath
2000sf finished
850sf unfinished basement.

Tandem three car garage .
$ 532000

By the time I finish the backyard , put in fencing , central air , window coverings , upgrade the flooring and cabinets looking at about $ 570,000


Will rent for $ 2800 a month initially then $3000 the following year.

---

that math dont math for me

That may be your market, but the ROI is not great

---

House will be cashed out from day one. So the rent return isn't all that great to be sure .

Primarily need the tax write off as am doing a 1031 exchange.

And unless the economy crashes…..and it certainly could…..am expecting approximately a $ 40,000 appreciation jump
by November .

All other similar new houses with the size and features start at $625,000.

KaiBear said:

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4th and Inches said:

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KaiBear said:

---

Just went under contract for a new built 2 story home.

4 bed, 3 bath
2000sf finished
850sf unfinished basement.

Tandem three car garage .
$ 532000

By the time I finish the backyard , put in fencing , central air , window coverings , upgrade the flooring and cabinets looking at about $ 570,000


Will rent for $ 2800 a month initially then $3000 the following year.

---

that math dont math for me

That may be your market, but the ROI is not great

---

House will be cashed out from day one. So the rent return isn't all that great to be sure .

Primarily need the tax write off as am doing a 1031 exchange.

And unless the economy crashes…..and it certainly could…..am expecting approximately a $ 40,000 appreciation jump
by November .

All other similar new houses with the size and features start at $625,000.

---

i get it..

I think my next purchase is going to be a mini storage lot. Americans have a desperate need to collect as much crap as possible with nowhere to put it.

The housing affordability crisis was a massive topic at the most recent builders international show.

Builders are trying to find cheaper ways to build while still keeping up with IRC. It's a tough balance. People get frustrated with the lower quality standards and cookie cutter homes but it's an absolute requirement if you are trying to provide something at a lower price.

Boomers and millennials will keep the residential market going for a while because they are seeing large equity positions that they can translate into new builds but as homeownership increasingly becomes a "later in life" situation for younger folks, it will change.

It'll hit the major cities first but I think you'll continue to see much denser living arrangements. Smaller homes, closer together.

I mentioned it earlier in this thread but we have done to homes what we have done to vehicles. They continue to include more and more "features" that drive cost. Just like when people are buying a vehicle, they go "If I'm going to spend X, I might as well spend Y and get what I want."

There are ways to build a reliable home far less expensively but it'll take a massive collaboration. You need the federal government to change standards, you need the local governments to be more relaxed, you need land developers on board, you need homebuilders on board, etc.

As a real world example, impact fees and stormwater requirements in Waco have driven the average cost of one of our homes up nearly $10K in one year. That's just City of Waco. Throw in rising developer costs (which translates to higher land costs), higher material costs, higher labor costs, etc. and you end up with a far more expensive home at which time people start saying "Well hell, might as well do XYZ as well."

BaylorGuy314 said:

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The housing affordability crisis was a massive topic at the most recent builders international show.

Builders are trying to find cheaper ways to build while still keeping up with IRC. It's a tough balance. People get frustrated with the lower quality standards and cookie cutter homes but it's an absolute requirement if you are trying to provide something at a lower price.

Boomers and millennials will keep the residential market going for a while because they are seeing large equity positions that they can translate into new builds but as homeownership increasingly becomes a "later in life" situation for younger folks, it will change.

It'll hit the major cities first but I think you'll continue to see much denser living arrangements. Smaller homes, closer together.

I mentioned it earlier in this thread but we have done to homes what we have done to vehicles. They continue to include more and more "features" that drive cost. Just like when people are buying a vehicle, they go "If I'm going to spend X, I might as well spend Y and get what I want."

There are ways to build a reliable home far less expensively but it'll take a massive collaboration. You need the federal government to change standards, you need the local governments to be more relaxed, you need land developers on board, you need homebuilders on board, etc.

As a real world example, impact fees and stormwater requirements in Waco have driven the average cost of one of our homes up nearly $10K in one year. That's just City of Waco. Throw in rising developer costs (which translates to higher land costs), higher material costs, higher labor costs, etc. and you end up with a far more expensive home at which time people start saying "Well hell, might as well do XYZ as well."

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yep, builders are scaling back waco over that 10k bump.. its more than DFW market cost.

The big developers are getting to set up PUDs which get a different set of rules including building code requirements. DR Horton type groups get hit far less hard than small builders

We have shifted to almost all remodels

4th and Inches said:

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KaiBear said:

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4th and Inches said:

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KaiBear said:

---

Just went under contract for a new built 2 story home.

4 bed, 3 bath
2000sf finished
850sf unfinished basement.

Tandem three car garage .
$ 532000

By the time I finish the backyard , put in fencing , central air , window coverings , upgrade the flooring and cabinets looking at about $ 570,000


Will rent for $ 2800 a month initially then $3000 the following year.

---

that math dont math for me

That may be your market, but the ROI is not great

---

House will be cashed out from day one. So the rent return isn't all that great to be sure .

Primarily need the tax write off as am doing a 1031 exchange.

And unless the economy crashes…..and it certainly could…..am expecting approximately a $ 40,000 appreciation jump
by November .

All other similar new houses with the size and features start at $625,000.

---

i get it..

I think my next purchase is going to be a mini storage lot. Americans have a desperate need to collect as much crap as possible with nowhere to put it.

---

The nicest cash cow I see ( with the least amount of cost or overhead) ) are RV storage lots.

KaiBear said:

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4th and Inches said:

---

KaiBear said:

---

4th and Inches said:

---

KaiBear said:

---

Just went under contract for a new built 2 story home.

4 bed, 3 bath
2000sf finished
850sf unfinished basement.

Tandem three car garage .
$ 532000

By the time I finish the backyard , put in fencing , central air , window coverings , upgrade the flooring and cabinets looking at about $ 570,000


Will rent for $ 2800 a month initially then $3000 the following year.

---

that math dont math for me

That may be your market, but the ROI is not great

---

House will be cashed out from day one. So the rent return isn't all that great to be sure .

Primarily need the tax write off as am doing a 1031 exchange.

And unless the economy crashes…..and it certainly could…..am expecting approximately a $ 40,000 appreciation jump
by November .

All other similar new houses with the size and features start at $625,000.

---

i get it..

I think my next purchase is going to be a mini storage lot. Americans have a desperate need to collect as much crap as possible with nowhere to put it.

---

The nicest cash cow I see ( with the least amount of cost or overhead) ) are RV storage lots.

---

storage unit biz is saturated and expensive .

J.R. said:

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KaiBear said:

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4th and Inches said:

---

KaiBear said:

---

4th and Inches said:

---

KaiBear said:

---

Just went under contract for a new built 2 story home.

4 bed, 3 bath
2000sf finished
850sf unfinished basement.

Tandem three car garage .
$ 532000

By the time I finish the backyard , put in fencing , central air , window coverings , upgrade the flooring and cabinets looking at about $ 570,000


Will rent for $ 2800 a month initially then $3000 the following year.

---

that math dont math for me

That may be your market, but the ROI is not great

---

House will be cashed out from day one. So the rent return isn't all that great to be sure .

Primarily need the tax write off as am doing a 1031 exchange.

And unless the economy crashes…..and it certainly could…..am expecting approximately a $ 40,000 appreciation jump
by November .

All other similar new houses with the size and features start at $625,000.

---

i get it..

I think my next purchase is going to be a mini storage lot. Americans have a desperate need to collect as much crap as possible with nowhere to put it.

---

The nicest cash cow I see ( with the least amount of cost or overhead) ) are RV storage lots.

---

storage unit biz is saturated and expensive .

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depends on where and market analysis are common sense items in any real estate purchase

Also, it would be an existing purchase, not a new build so the books would have to support the purchase

J.R. said:

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KaiBear said:

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4th and Inches said:

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KaiBear said:

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4th and Inches said:

---

KaiBear said:

---

Just went under contract for a new built 2 story home.

4 bed, 3 bath
2000sf finished
850sf unfinished basement.

Tandem three car garage .
$ 532000

By the time I finish the backyard , put in fencing , central air , window coverings , upgrade the flooring and cabinets looking at about $ 570,000


Will rent for $ 2800 a month initially then $3000 the following year.

---

that math dont math for me

That may be your market, but the ROI is not great

---

House will be cashed out from day one. So the rent return isn't all that great to be sure .

Primarily need the tax write off as am doing a 1031 exchange.

And unless the economy crashes…..and it certainly could…..am expecting approximately a $ 40,000 appreciation jump
by November .

All other similar new houses with the size and features start at $625,000.

---

i get it..

I think my next purchase is going to be a mini storage lot. Americans have a desperate need to collect as much crap as possible with nowhere to put it.

---

The nicest cash cow I see ( with the least amount of cost or overhead) ) are RV storage lots.

---

storage unit biz is saturated and expensive .

---

Regular storage units, I defer to your judgment.

However each of the RV parking storage places near me are full or close to full.

It should come as a shock to no one that kids who can't afford to purchase a home are trending towards and not away from socialism. You can scream and yell about how socialistic policies are what got us here until you're blue in the face, but if you have no actionable solution to…

— Braxton McCoy (@braxton_mccoy) March 14, 2024

Our first house was $118K and put $10K in it and it was just great. We didn't know better. For those of you who are familiar with Dallas , those little starter homes on the M Streets, built in the 1920s are basically $1M. Cray

J.R. said:

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Our first house was $118K and put $10K in it and it was just great. We didn't know better. For those of you who are familiar with Dallas , those little starter homes on the M Streets, built in the 1920s are basically $1M. Cray

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yep, and you could pick those up for dirt cheap in the mid to late 90s and do owner finance. A friend of mine bought about 10 properties back then doing that. I think he still has half the properties as rentals.

Our economy is quickly splitting into two.

The haves and the have-nots.

A friend wants to develop his grandparent's land in UT.

Spending some time on the numbers, it's evident that only two products will work.

Here is a breakdown of the two products.

I either need very dense… pic.twitter.com/mr8uCJbpa9

— Spencer Barber | Costa Rica Development (@spencertbarber) March 16, 2024

muddybrazos said:

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J.R. said:

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Our first house was $118K and put $10K in it and it was just great. We didn't know better. For those of you who are familiar with Dallas , those little starter homes on the M Streets, built in the 1920s are basically $1M. Cray

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yep, and you could pick those up for dirt cheap in the mid to late 90s and do owner finance. A friend of mine bought about 10 properties back then doing that. I think he still has half the properties as rentals.

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he was before his time!

Stagnant population growth, combined with a rapidly aging boomer demographic, means that after the next decade or two we're going to be swimming in empty single-family homes.

If you're a boomer hoping to live at least partially on the cash made from your home sale, sell now and put that cash somewhere stable. Don't wait.

Chipoople said:

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Stagnant population growth, combined with a rapidly aging boomer demographic, means that after the next decade or two we're going to be swimming in empty single-family homes.

If you're a boomer hoping to live at least partially on the cash made from your home sale, sell now and put that cash somewhere stable. Don't wait.

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Sell today to avoid what might happen in the ' next decade or two '.


Perfect

Redbrickbear said:

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Our economy is quickly splitting into two.

The haves and the have-nots.

A friend wants to develop his grandparent's land in UT.

Spending some time on the numbers, it's evident that only two products will work.

Here is a breakdown of the two products.

I either need very dense… pic.twitter.com/mr8uCJbpa9

— Spencer Barber | Costa Rica Development (@spencertbarber) March 16, 2024

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This is 100% right on although those margins are absolutely gross margins (gross profit vs materials/labor). They exclude a bunch of fixed expenses. Industry standard on net is generally 8-10%. Over that and you are performing above par.

We've looked into doing land development in Waco as a vertical integration tool. We came to the same conclusions as this guy.

If you want to build something affordable for Gen Z (born 1997-2012), you have to get the lots small and dense to keep the land cost down. You have to use lower quality materials. You have to build them "down and dirty" as a homebuilder acquaintance who specializes in "value" builds refers to them. And you really need to build them in mass to get the economies of scale to make sense. We can ***** and moan about it all day but that's the cold, hard economic facts.

On the flip side, you could develop one estate lot in place of every 4-5 dense lots. The price of the lot goes up 4-5x accordingly but if you turn around and build a luxury 4000sf house on it, you can absorb that land cost. Selling time depends on the market but there are a lot of Baby Boomers (1945-1965), Gen X (1965-1980), and older Millennials (1980-1995) that were able to get into real estate right and ride the appreciation wave to significant equity, allowing them to put a bunch down and afford the upper 6/low 7 price tags. These folks are also in the prime earning bandwidth of their careers.

Chipoople said:

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Stagnant population growth, combined with a rapidly aging boomer demographic, means that after the next decade or two we're going to be swimming in empty single-family homes.

If you're a boomer hoping to live at least partially on the cash made from your home sale, sell now and put that cash somewhere stable. Don't wait.

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I believe the US is expected to stagnate in population growth somewhere between 2045-2080 depending on the model. Obviously there are a lot of variables in that.

It's also noteworthy that there is an ever-increasing rental population (as a % of the general populous) which are candidates for shifting to homes if the price is right. We are already in a housing shortage which will only grow over the next decade,

BaylorGuy314 said:

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Chipoople said:

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Stagnant population growth, combined with a rapidly aging boomer demographic, means that after the next decade or two we're going to be swimming in empty single-family homes.

If you're a boomer hoping to live at least partially on the cash made from your home sale, sell now and put that cash somewhere stable. Don't wait.

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I believe the US is expected to stagnate in population growth somewhere between 2045-2080 depending on the model. Obviously there are a lot of variables in that.

It's also noteworthy that there is an ever-increasing rental population (as a % of the general populous) which are candidates for shifting to homes if the price is right. We are already in a housing shortage which will only grow over the next decade,

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Agreed

We are continuing to buy single family houses ( usually new ones ) with similar assumptions.

Of course if interest rates remain high and / or the economy crashes housing values will go down.




However another factor is the near impossibility of building affordable single family houses .

As it is extremely difficult to build a 4 bed 3 bath 2000sf 2 story with a full unfinished basement for less than half a million.

So existing single family homes should continue to go up in value over the long term.

Nothing is certain in these days of 32 trillion dollar deficits however if your rental houses are free and clear one should be able ride out any short term problems .

First time housing affordability is the worst on record, per Bloomberg: pic.twitter.com/c2DMXaLwK4

— unusual_whales (@unusual_whales) March 18, 2024

A GLOBAL PUNCH TO HOUSING AFFORDABILITY

Price overheating. Spiked rates. Incomes didn't keep up.

As of today, we AREN'T on a path to pre-pandemic housing affordability

--

IF U.S. incomes spiked 69%, we'd return to pre-pandemic housing affordability levels

IF U.S. home… pic.twitter.com/gE1Sk2mpbO

— Lance Lambert (@NewsLambert) May 10, 2024

There are just six cities where the median-priced home is affordable for median-income earners, per FOX:

Pittsburgh
Cleveland
St. Louis
Memphis, Tennessee
Indianapolis
Birmingham, Alabama

— unusual_whales (@unusual_whales) May 9, 2024

When we ushered in the marxists again this is what we get.

Enjoy

Fools

Multiple reasons:

(1) Mass immigration has driven up the demand for, and therefore cost of rentals putting people new to the job market in direct competition with an increasing number of people new to the country. This, in combination with the inflation caused by bad fiscal policy and an economy with less free market competition makes it difficult to save for a home.

(2) The result of bad fiscal policy in DC has forced the Fed to raise interest rates to try and prevent hyperinflation which have made mortages dramatically more expensive.

(3) Large investors like Blackrock in combination with foreign investors have driven up the demand, and therefore prices. Many countries have an "alien landholder license" that a foreign citizen has to purchase before buying a home, often at 5%-7% of the purchase price. I wouldn't be opposed to such a thing, along with some method of curtailing corporate investment in single family homes.

27% of Americans say they are occasionally skipping meals due to the rising cost of food, per Credit Karma

— unusual_whales (@unusual_whales) July 4, 2024

Meanwhile, the Biden Admin is contemplating raising the tariff on Canadian lumber imports. It's already around 10% today. Same for imported materials like steel nails, etc.

Maybe put some more competition into the market and see what happens.

I intend to put my house in a family trust and let my daughter have it once shes married. She's 9 so we got plenty of time but I would love for my grandkids to be raised in my neighborhood bc we have a really great place to live.

FLBear5630 said:

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whiterock said:

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Frank Galvin said:

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The market "should" fix that. If no one can afford those homes, their price will decrease.

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Free markets would. But when govt massively interdicts market functions wuth irrational "nudging" such as politically driven subsidies, regulations, and outright fiat price fixing, markets do not work efficiently. Distortions occur, as we see with real estate prices relative to entry level wages.

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Are you also against zoning, land use and HOAs?

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agnostic on that. Houston without zoning has been pretty successful, but it might not be a universal truth. The idea that the market can plan better might work ok when things are growing, but I haven't seen much commentary on how it might perform when growth stops, as has happened in small town America, Rust Belt America....Blue State America that is losing voters to Red State America.

My comment was about how govt has used fiscal policy to influence a wide range of macroeconomic factors. Regulations to drive up the costs of not just goods and labor, but regulatory compliance.

Rarely do we see much said about reducing overall costs, other than when regulator gods scold the critique to save the environment.

Buying a house is as unaffordable as ever, per NYT: pic.twitter.com/u8Y8ij3FjV

— unusual_whales (@unusual_whales) July 4, 2024

Middle class can't keep up with inflation. Savings is low, debt and home prices are up.

Inflation numbers are manipulated to not show what's really going on, but everyone except the very well off feels the pain.

Mortgages are more expensive. College is more expensive, and college loans are more difficult and expensive to take. Healthcare and insurance is going crazy. Cities upping their rates on all services. In net, Parents will have less money to help their kids.

Will the market respond? Seems like the problem is that more and more people want to live in the same place, which drives up demand even as supply shrinks. Add in some painful finance costs right now and you've got a problem.

Typically, the market will respond to this by people buying houses in places where the housing is cheaper and the schools are still not captured by the insane teachers unions.

Redbrickbear said:

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Is this guy in Texas? There is relief for seniors.

OsoCoreyell said:

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Redbrickbear said:

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Is this guy in Texas? There is relief for seniors.

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Not that I have seen, and I am a senior myself.