patrick.net

I think he means 'crush' to mean 'get a better return' for example you buy in bulk from fannie mae 100 properties and flip them to clueless zero down FHA buyers for retail price.

Roberto has to compete with other buyers for deals- hes a regular guy.

xrpb11a says

So after all the hubris, when all's said and done, you're saying Roberto's strategy is fatally flawed....

Not necessarily. Nobody knows if the institutional investor doomsday scenario (IIDS) will actually happen. His strategy of "buy-to-rent" is no more flawed than any of ours to "buy-to-live-in" or "rent" because everyone will be fucked if IIDS comes to pass.

=======================

(the rest is directed to the thread's readership in general)
I get that people like to hate on him because they are butt-hurt that they cannot afford a house, or are just unwilling to pay the prices on them in the SFBA (I am a renter in the latter category BTW). Get over it. Some people pump funds into mutual funds and 401k's, and some people bank on rental properties. People get way too emotional about this, and the butt-hurt flows strongly as a result.

Besides, the haters on here DO realize that he posts about this to egg you on, right? You play right into it. Some people's idea of a utopia is "a world where I buy the exact house that I want in the exact location I want for the exact price I want and nobody is in my way, especially nasty landlords," but it'll never happen. I'm a renter, and irritated at high prices around here, but I am not silly enough to think that some random guy on the internet that bought a whopping 12 houses in AZ is the reason that SFBA property is overpriced. Posting under a user name with a CA location, and flipping out over some guy in AZ is totally illogical.

bmwman91 says

This is more or less exactly how I played SimCity as a little kid lol...initial investment to get cash flow going, collect revenue to invest in more growth, reinvest revenue for more, etc, until cash flow is enough that I don't care anymore. I'm too much of a chicken to do it with my US Dollars though, as opposed to digital Simoleans (or whatever the currency was called in the game).

Loved that game! And Railroad Tycoon II.

(Yes, the currency in SC was called Simolians (not sure of the spelling) starting with SC3000)

Ok, back on topic. Sorry everyone...

PockyClipsNow says

I think he means 'crush' to mean 'get a better return' for example you buy in bulk from fannie mae 100 properties and flip them to clueless zero down FHA buyers for retail price.

Roberto has to compete with other buyers for deals- hes a regular guy.

Is that the big plan for the institutional investors? It seems a lot more likely that they would want to flip the houses, rather than play slum-lord.

For those of you with experience landlording, do you prefer in the city row homes turned multi unit buildings, or SFH in the burbs? I guess HOAs have their benefits, but id imagine that buying in the type of developments that tend to have HOAs comes with some issues,,,,

In ten years I would love to be in roberto's position. The problem is I have to contend with NYC prices, so for me having 12 mortgages plus my primary residence (which may actually be paid off by then) is probably impossible.

Patrick - how did a blog for house market truth turn into a free medium used in advertising realtard's services? Are you trying to sell us to the highest bidder? I really thought that you were above that, but now, I am thinking that you might be losing your grass-root subscribers.

woppa says

In ten years I would love to be in roberto's position. The problem is I have to contend with NYC prices, so for me having 12 mortgages plus my primary residence (which may actually be paid off by then) is probably impossible.

You'd be crazy to try to do it in NYC or any other coastal metro. Do it somewhere cheap where property values are low relative to the rent you can get from them. NYC isn't that place. Also, Roberto is not using mortgages it sounds like.

bmwman91 says

Besides, the haters on here DO realize that he posts about this to egg you on, right?

He tries to egg us on, because he is the egg man. Here is an old story from Peter Schiff on this subject:

A client called his broker inquiring about egg futures and is quoted a price of 25 cents per contract. Having a hunch about the egg market he buys 100 contracts. A week later he calls his broker to get a quote. Pleased to learn that the price of eggs has risen to 35 cents he decides to buy another 1,000 contracts. A few days later, eager to check on the progress of his investment, he is amazed to learn that the price has now risen to 50 cents per contract, twice the price he paid for his original 100 contracts. Sensing a trend, he steps it up, this time buying 100,000 contracts. The next day, ecstatic to learn that egg prices have now risen to 65 cents, he gets even more aggressive, buying 1,000,000 contracts. Sure enough, the following day the price of eggs rises to 95 cents, prompting him to order an additional million contracts. The day after that, as rising prices further validate his intuition, he buys yet another million contracts, this time paying $1.25.

The next day, with egg contracts trading at $1.75, he senses that the market has risen too far too fast, and places an order to sell 2,000,000 contracts. After a pregnant pause his broker replies, "Sell to whom, you're the egg man".

The institutional investors apparently are planning to rent out a large large % of the properties gifted to them by the generous taxpayers/fed reserve/phonie&fraudie&fha.

THen they will bundle them into securities and/or form a REIT and make a large cash return selling those (since they cant flip all the poperties per the govt mandated rules they must keep half of them) so they have to form a REIT and sell that or shares in that. Or bundled them into securities and flip those for quick cash.
Also they might be happy with a 13% return or whatever they are getting.

Its win-win since a huge % of these properties will be rented to S-8 renters - thus the money for nothing just keeps flowing for them. Actually its a lot of work - lots of forms to fill out, phone calls, driving around.

Sweet sweet real estate!

Interesting take....I don't see anything in BMWMAN's or my post that would be considered "flipping out"....unless you have another californian in mind...

bmwman91 says

Posting under a user name with a CA location, and flipping out over some guy in AZ is totally illogical.

Several posts evoked thought responses:

1.) Roberto is part of the Real Estate Truth.
2.) Yep, this is the current Real Estate Reality
3.) Not sure if the 'Hate' comments are really hate or just 'egging' on in jest and joking. I have no interest in hateful bigotry comments.
4.) Fannie Mae is selling at Retail, check trendy Sherman Oaks (if it is still there)
5.) I also would certainly not mind a Real Estate Empire, but the opportunities are not available in my current location

bmwman91 says

which does sound like it is quite positive, and then reinvest it into more properties? This is more or less exactly how I played SimCity as a little kid lol...initial investm

Ha! When I played Sims, I put the person in the pool and took out the ladder. I still feel terrible about it. ;p

Fannie mae sells retail ALSO in bulk at big discount (no mls, special progrom which is open to anyone who is in the 1% - you have to have 1m minimum cash to bid)

Gee Professor,

Captive audience of young students not enough to get off boasting to?

robertoaribas says

Having actually volunteered to help at the special olympics, I'll take this as a compliment. You might try it, you'll be amazed.

He "volunteered" for the special olympics. That's what we tell a lot of them.

Biff

Does it matter how many properties you have in a desert?...Good for ya. I'll always stay away from AZ.

Do you realize you have more typos, bad usage and grammar than any other poster here?

Between "world" and "but" above there is no comma.
Buy a copy of Skrunk and White.

robertoaribas says

I love my genesis...

WHich albums? Tuned out after we can't Dance.

(I am a land baron to, but even I think 12 houses might be pushing it ..)

Does anyone believe anything a Realtor says?

jvolstad says

anyone believe .... a Realtor ?...

A Realtor?

Maybe.

A Realtor®?, - never.

ptiemann says

Not bad. I was in a similar situation, by the way, in Coastal California.

who wants to live in California and pay loads of taxes for Feminists and Illegal Aliens?

woppa says

In ten years I would love to be in roberto's position. The problem is I have to contend with NYC prices, so for me having 12 mortgages plus my primary residence (which may actually be paid off by then) is probably impossible.

Pheonix now has a public transport system and the potential to compete with NYC for jobs.

Arizona has a lot going for it. The heat sucks in the summer, but 3/4 of the year the weather is perfect. Don't forget you can run evap coolers out here which are super cheap. Your A/C bill for the summer is typically lower than NYS. I would take year round weather in Phx over NYC any day. Arizona would be the ideal state if we weren't being invaded by Mexico. That's primarily why they come here: the gettins good.

clambo says

Do you realize you have more typos, bad usage and grammar than any other poster here?

Do you realize you come off as the most butthurt tard on this entire forum?

basically the story is with AZ is that it's a low-cost alternative to California, and thus has a tendency to absorb all the alternative political and cultural ideas. Thus Californians put it down and don't realize theyre just repeating propaganda.

It's actually cheaper to outsource to AZ than it is to India, but Californians insist India is better(because many many Indians live in CA and thankfully don't live in AZ). AZ is still a very American place, perhaps the most of any state.

Keep buying, houses are cheap down south, credit is as loose as ever, let the banks and renters allow you to retire comfortably some day. This is the world we live in, feeding and living off those who have less, it's just mother nature doing her thing, eat or be eaten.

in the Downtown Phoenix region, housing has actually appreciated.

robertoaribas says

reconditioning grout lines in tile

Hell! What're buying up as rentals? Unless Lincoln slept there, smash it all up and put in the roll out sheet stuff. You can be done in a fraction of the time and have enough hours left over for frozen yoghurt! Whether you are craving out for a regular breakfast or simply with a delightful montage of fruit, you would surely be amazed every time by the originality of the Tutti Frutti menu.

The Original Bankster says

AZ is still a very American place, perhaps the most of any state.

Real Americans complete with teabags as part of their attire, I am sure.

lostand confused says

Real Americans complete with teabags as part of their attire, I am sure.

And with psychopaths randomly shooting people.

No, I'm not talking about the Colorado thing, I'm talking about the incident of a year or two ago.

Hard for the market to come back when there are so many flippers still out there. Just yesterday I heard them advertising "flipping seminars" on the radio. It came off like a "get rich quick scheme" which I'm sure a lot of people went for.

However, congrats on your success Roberto. Hate the game, not the player.

Friend of mine, they bought about a dozen properties during the run up, I'm sure they are disappointed but it's no big thing, they are young and the homes will still get paid for in time, they just have to wait until the loans are paid down enough to flip them. After 20-30 years of renting, I'm sure the places will be fairly trashed over all, not to mention deterioration of some neighborhoods over time. The neighborhood I just left, three homes across from a house that turned into a rental all went up for sale, the renters did not pay the electric bill, instead running a generator out in the yard 24*7. They saw first hand what happens to the neighborhood.

bmwman91 says

Hey Roberto, where do you get the cash from to do this? Do you accumulate the rental income

Here is what people do if you want to use leverage to accelerate the process (warn you it's riskier though.) First, find all the CASH you can get to buy a few cheap foreclosures. After you've done with all the fixing jobs, ATM cash from the houses (you own) with equity loans. With that, go buy more houses with CASH in hand. Rinse and repeat. I personally do not prefer this way though.

robertoaribas says

Yes, just three weeks after home 11, ($80K, +$9K in remodel and appliances, hoa = 100, taxes = 800 a year, insurance = 750 a year, rented for $1100) which is now rented at the predicted amount.
This one was $85k, 3/2/2 car garage in 85201.

Housing price on the order of $80k for $1100 rent is a bit high for investment IMO (albeit good locations.) I wanted to buy a house around $40k to rent out $800-$900 but my wife wouldn't do it. We would probably wind up buying $20k houses to rent out $500-$600 in a not so good area. The yield is higher but the upside is lower and the risk is higher.

A guy I went to high school with went straight into loan brokering. He worked very hard at it. He later bought a small house in a then still relatively cheap part of the SFBA. I ran into him again a decade later. He now had the beginning of a RE empire. He had a few properties in CA and is buying an apartment complex in NV. That was in 2005. We lost touch for a while after that. I later found out he had leveraged himself horribly to buy the extra properties. The NV town he bought the complex in did not prosper. He now has well over a million in fully recourse loans. Even bankruptcy is not an option.

Clearly there is a right way and a wrong way to build one's empire. Good timing, prudence, hard work and a LOT of luck.

Roberto seems to have the first of the three, best of the fourth to you Roberto.

I don't understand why people pick on you. The reason to follow a housing blog is too be advised on the market so you can buy and sell better. I want to get more properties, cash flow with no mortgage. Keep working and saving and find smart deals. My question to you is: What are investor property tax rates in AZ?

Does anyone know what investment property tax rates are in AZ?
I have done the Internet search but haven't really found it out yet.

I have asked Robert before but he didn't respond. What's the tax rate, what is it!

@Roberto
congrats and ignore the haters

I thought you were a professor. When do you get time to do scout, invest, upgrade properties? or have your retired already? :-)

First of all, Roberto purposely picked a fight when he started this discussion. If he asks for it I don't think anyone should feel sorry for him when he gets it.

Secondly, I tend to kid around here just for a reaction but Arizona really is kind of a shithole.

Tucson is a cross between a trailer park and a nuclear waste dump. "Make sure you stop by the dessert museum!" is Tucson's equivalent of Phoenix's "But it's a dry heat." Although I will say that the aircraft graveyard is pretty impressive.

I was in Phoenix for a week and the lowest temperature was 113 degrees. The highest was 118. And yes that was just one week but no, the weather is not great there nine months out of the year. People plant two kinds of grass there every year because plant life can't even stand it.

I've been to both Phoenix and Tucscon more times than I care to remember. I thoroughly enjoyed a barbecue at Pinnacle Peak but I can't recommend vacationing or living there to anybody.

I was in Sedona and all the locals did was talk about what a shithole Phoenix was. Only in Arizona could Sedona be considered amazing. Some old women glue a few chili peppers together and call it art. Stop for lunch maybe if you are unfortunate enough to find yourself in the area but beyond that, there's almost nothing there.

And regarding clambo's grammar comments, I actually think they're pretty funny. And from Santa Cruz no less, the last great refuge of hippies, bums and various other 1960's rejects. I say clambo should continue to aggresively patrol these halls for grammar offenses.

Biff
(shaking things up)