patrick.net

I know that technically Arizona is in the United States but does it really count? No.

I know, I know, it's a dry heat.

Biff

Congrats. Building a small empire in Arizona is like winning the special Olympics.

That's a really good one, congrats.

Are you handling all 12 rentals by yourself (leases, taxes/paperwork, maintenance)? That sounds like a substantial commitment, unless you can get help from family or use a management company.

Maybe if you own enough rentals you can 1. buy a sports car 2. upgrade girlfriends from a retriever to a human.
Of course the chicks running around in that hell hole must be something else.
I guess it could be worse, you could be in Nogales, Juarez, Victoria, Monterrey Mex.

¿Dónde está el baño por favor?

When do you go public so I can buy shares?

clambo says

upgrade girlfriends from a retriever to a human.

I don't usually like to engage in the mud slinging, but this got a chuckle out of me.

I just invested more money into my 401k!!!!

Congradulations Roberto.

85K is a reasonable price for a property in a good location. I paid 91k for a city property in Dallas.

In my opinion, the closest similiarity to the Phoenix market here in Southern California is San Bernardino / Riverside and Long Beach.

Although, mulit units sell quickly anywhere.

Congrats! I'd like to build an portfolio of 10+ properties. Stuck on 4 right now and am not finding the deals I used to in the location that I'm used to investing.

I guess this is what the bottom looks like - investors buying up everything they can for cash since prices are at/below rental parity. Of course its a government manufactured frankenstein 'bottom' but it is what it is.

If prices keep going up Roberto can sell all 12 properties for twice what he paid, wait for crash, repeat.

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

And what's with the hate posts? Yeah the guy's building a "rental empire." Apparently none of the haters want to live there anyway, so it isn't like he's preventing you from buying a house. Oh, it's people LIKE Roberto, right? Get over it, it's a capitalist system. Small investors like him are NOT the problem. The real problem is going to be the large institutional investors with the ability to rig the whole system that are trying to get their hands on the large shadow inventory for pennies on the dollar, and who will subsequently crush renters, existing home owners and small investors like Roberto.

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

bmwman91 says

and who will subsequently crush renters, existing home owners and small investors like Roberto.

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