Real Estate Meet Up – Last Night (October 17, 2017)

by FI Fighter on October 18, 2017

in Real Estate Thoughts, Real Estate Updates

I attended a real estate meet up last night… Say what!?! Yup, that’s right, on a whim I decided to join a good buddy of mine and attend a workshop out in Fremont. I’ll admit, being in a classroom environment (after avoiding it for so long) felt kind of weird at first, and as the room started to get filled with more and more people, things just became more and more uncomfortable for me…

In case anyone is new to this blog and wondering, many moons ago I used to be a big proponent of real estate… In fact, I used to believe that it was my preferred vehicle to get to and sustain early FI… However, in the middle of 2015, my thoughts started to change greatly… When I looked around me all I saw were the following:

  • Overpriced assets.
  • Low returns.
  • Insane FOMO.

And after last night, well, I guess you could say that not much has changed for me on the real estate front… things are even worse off now than they were in 2015 (much worse). Although I haven’t followed the real estate market pretty much at all since 2015, by the looks of the faces in the classroom, shit, interest is still through the roof… and I’m guessing the Fear Of Missing Out (FOMO) is at unprecedented highs right now…

Way too many eager and greedy people…

Thanks, but no thanks…

Actually, if anything, by attending last night’s real estate session, I’m now convinced more than ever that it’s a fabulous time to be involved in precious metals, mining stocks, and commodities…

Go where the people ain’t…

Seriously, I have no idea why anyone would feel hellbent on getting in on real estate right now?

You’re fighting for scraps at this late stage of the game… and I’m trying to be a picky guy… If I can’t get Class A properties in the best locations that cash flow all day and night long, forget it…

I’d rather wait in NO LINES and buy up all the discounted miners that I can, hand over fist…

So yeah, you can say real estate still has me feeling pretty jaded… I’ve got absolutely no love for that asset class right now…

But markets are cyclical and market cycles repeat throughout time and history; we forget that, and quite frankly, I think most people don’t give a rat’s ass because buying at the top of the market ALWAYS feels so freekin good…

 

Until the music stops…

 

Sorry if I sound like I’m in a bad mood… The thought of real estate right now just leaves a very bitter/sour/nasty taste in my mouth…

 

Fight On!

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{ 10 comments… read them below or add one }

1 Financial SamuraiNo Gravatar October 19, 2017 at 1:34 am

Interesting feedback that the desire for real estate is even higher now than 20% lower ago.

What is the reason why you’re bitter? You profited from real estate quite handsomely.

I just sold my rental house this summer. I just didn’t want to be a landlord anymore with the new baby. I figure the timing was OK as well, at least way better than when I tried for sale in 2012!

Sam

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2 FI FighterNo Gravatar October 22, 2017 at 10:14 am

Sam,

LOL, not sure why I’m bitter… I just think the markets are insane right now and people have to be careful and not get ahead of themselves, which is easier said than done.

Congrats on selling the home and booking massive profits.

Cheers!

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3 Financial SamuraiNo Gravatar October 23, 2017 at 7:10 am

Thanks. Are you not long more real estate? Or did you sell everything?

I’m still on my primary residence and a rental condominium in San Francisco. But it feels good not to be long three properties anymore. I just felt I had too much exposure, And it was a pain in the ass. It’s nice not to pay property taxes and it’s nice to have a lot of liquidity.

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4 MikeNo Gravatar October 19, 2017 at 6:23 am

Thanks for this! I have been waffling back and forth on starting to pick up some Memphis rental houses (in the better areas), on the basis that its what Jason Hartman calls a “linear” market, and to slowly ease in as prices hopefully drop but get some of the tax benefits now.. I think I’m a good contrarian indicator of my own because every time I get really focused on real estate research (markets, strategies, general mechanics) it is when mining stocks are going to crap and I’m doing it to distract myself.. Thats just when I should be focusing on buying more mining stocks! 🙂

At the same time I can’t have all my money in junior resource sector stocks, I tell myself.. which is how I rationalize real estate to myself. Plus I have 0 real estate holdings except for my house in the Austin suburbs that I bought recently.. thats probably more than enough. 🙂 Curious what you have besides cash and mining stocks? I have been thinking about funds that buy Life Settlements (http://cashflowninja.com/kevin-nichols/) , I participated in an Oil & Gas drilling partnership that should make money even at $20 oil and the intangible drilling costs are able to offset some W-2 income. I am considering conservation easement trusts to get rid of even more taxes.. and I am awfully tempted to buy into a syndication that owns mobile home parks. Any thoughts on these things? Thanks love your stuff!

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5 FI FighterNo Gravatar October 22, 2017 at 10:17 am

Mike,

Yeah, I’m not a fan of real estate at all right now, whether we are talking about the higher priced tier 1 stuff or even the cash flowing properties out in the Midwest… The juice isn’t worth the squeeze in my eyes. Slow and steady has no appeal for me b/c I want shortcuts and high margin returns. Real estate can be a pain in the ass to deal with, so always be careful of what you buy… If you buy wrong, you could be trapped inside Hotel California and not be able to get out easily without surrendering massive amounts of money.

Only speaking for myself, but I’m looking to diversify outside of mining with cryptocurrencies which is a very new sector that has legs to run still.

All the best!

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6 JoeNo Gravatar October 20, 2017 at 7:59 am

Have you tried attending a precious metals or mining stocks meet-up?

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7 FI FighterNo Gravatar October 22, 2017 at 10:18 am

Joe,

Not yet but I’m guessing it would be a very somber and empty crowd in the audience 😉

Take care!

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8 Midwestern LandlordNo Gravatar October 20, 2017 at 8:17 am

Absolutely, buying class A properties right now in the hot markets does not make much sense from a risk reward standpoint. However, it does not take away all of the benefits of buying real estate when the market pricing is right (which you did). Have you thought about selling your real estate holdings? It seems like a great time to do so.

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9 FI FighterNo Gravatar October 22, 2017 at 10:20 am

Midwestern Landlord,

Yes, I’ve thought about it, but since I already sold 2 properties, I am electing to hold my remaining 3 rentals in the Bay Area and letting those cash flow + pay down mortgage. My cost basis is so low, it doesn’t worry me too much.

With regards to my out of state properties, eventually I think it makes sense to liquidate out of all of them… Not worth the time/effort/headaches and the returns leave a lot to be desired. I didn’t buy these low, so my returns are quite mediocre in comparison to my tier 1/class A properties. If you’re not a local landlord, you really need appreciation to bail you out and I’m not getting that out of state.

All the best!

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10 Financial SamuraiNo Gravatar October 23, 2017 at 7:12 am

This is good that you still have so much property and you profited from two sales. You shouldn’t be bitter about real estate! We should rejoice!

But I will say that owning and living in your own residence feels wonderful, regardless of what the market does. It just feels absolutely great to enjoy your investment.

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