Orchard Hills - Capella by Taylor Morrison

I think that Laguna and Hello both make valid points.  There's no free lunch out there in terms of real estate, either you buy somewhere like the inland empire where you will be cash flow positive day one but your appreciation will be limited or you buy in high demand areas like Irvine, West LA, and SF where you will be cash flow negative but have higher price appreciation.  To me, homes in an area where the cost of ownership is below the cost of renting is an indicator of low desirability to own while areas where the cost of ownership is higher than the cost of renting is an indicator of high desirability to own. So ultimately it comes down to the risk appetite of the individual on how they invest.  As the saying goes....no risk, no reward.
 
This conversation has morphed into something completely different from original conversation.  My only point in responding in this thread was to dispute laguna's claim that one cannot go wrong with a long term buy and hold in an expensive city like SF. 

Laguna21 said:
@irvineboy: If you are an investor, you can't go wrong with investing in San Francisco properties. They will always be sky high due to limitations on new construction in the city.

Of course, there are other investors saying it's extremely risky to invest due to SF being the highest risk city of being in a bubble. But if you are keeping it as a long-term rental, then I don't see it as an issue at all.
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It was bad advice on many levels.  I apologize if that offends laguna or anyone else, but its the honest truth.  Never was this conversation about how much risk one should take versus the potential reward.  Contrary to what some may say, real estate is really about numbers.  Yes there are other factors to consider that cannot be tangible such as numbers, but before anything, the numbers HAVE to make sense.  Otherwise, its just gambling. 

One last thing, I know a few people have mentioned SF was a bigger risk and thus a bigger reward.  I would argue that had laguna spent the same amount of money and bought cash flow positive properties in the IE 5 year ago, he would probably be better off now.  positive Cash flow + leveraged appreciation on multiple properties in the IE (about 50% appreciation in last 5 years)  >>>>>> negative cash flow + appreciation on one property in SF (about 63% appreciation in the last 5 years). 

I think im done with this conversation.  Dont take any offense, just trying to contribute and put in my 2 cents.
 
@hello: put your money where your mouth is instead of mouthing off about how others are giving bad advice.

Cite your success here that you've had with investing according to your terms instead of telling others they give bad advice.

My decision to invest in SF has paid off, & it was not a poor decision, as were my other decisions to start my own tech businesses.

But continue to live within the safety net of your calculator & so called cash positive life.

It's laughable that you are saying I would be better off purchasing properties in the IE area. I can't even entertain a comment like that.

You lack experience, and you mouth off in the forums with absolutely NO experience to back it up.

Show us proof that your methodology works, and cite your success with your investments, until then, it's all hot air.
 
Laguna21 said:
@hello: put your money where your mouth is instead of mouthing off about how others are giving bad advice.
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So you want me to follow my own advice?  Am I not doing that right now by NOT buying long term buy and holds in SF???  Why dont you put your money where your mouth is?  Please go pick up as many long term buy and holds in SF RIGHT NOW!  LOL

Laguna21 said:
My decision to invest in SF has paid off, & it was not a poor decision, as were my other decisions to start my own tech businesses.
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As I said, buying 5 years ago was not a bad decision.  Anyone that bought in SF 5 years ago made money.  However your advice was not to buy in SF 5 years ago, but rather to buy long term buy/holds now.  You are a classic example of being right for the wrong reasons.  Basically you are telling others that anyone can make money in SF right now cuz you did fine by buying 5 years ago.  Logical???

Laguna21 said:
But continue to live within the safety net of your calculator & so called cash positive life.
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yes, its called deal analysis...  It works well.  You should try it.  I think you would make more money, especially since someday luck may not be on your side.


Laguna21 said:
It's laughable that you are saying I would be better off purchasing properties in the IE area. I can't even entertain a comment like that.
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You would have.  SF appreciated about 63% in the last 5 years.  IE appreciated about 50% in the last 5 years. 
With those rates of appreciation, if you bought a few cheaper cash flow properties in the IE, instead of one cash flow negative property in SF, you would be ahead right now. 

Laguna21 said:
Show us proof that your methodology works, and cite your success with your investments, until then, it's all hot air.
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The premise of being cash flow positive is a basic understanding of any business, as well as in real estate investing, which is a business in itself.  If you need someone to actually show you that making cash on a property each month works, then I nor anyone else can help you. 













 
@aquabliss: I agree with you - this will be the last statement I will make.

@hello:

First thing you said to me was that it was "Dumb Luck" that I made that much equity since the time of purchase (It has been less than 5 years as an FYI) It was in 3.5 years to be precise.

Then you tell me its a no brainer that any property will make equity within 5 years and post stats of SF & IE appreciation. If you knew anything about real estate, that statement alone is completely false. There are no guarantees you will get equity in a property in 5 years & I guarantee you if we had this conversation 5 years ago about investing in SF, you would have lost your shit just like you have now & said it was a bad idea.

You can't even make up your mind!

You should really quit while you're ahead, b/c you're making yourself look ridiculous.

I said in "general terms" that SF are good investments. It goes without saying that one would need to research the market conditions, rates, cap rates and so forth before going forward with it in the current year.

I am extremely well aware of how cash flow positive property investment works & don't need a lesson from you. I have years of experience investing in real estate.

What I meant by proving your methodology was: tell us YOUR success story behind your investment strategy. I have yet to hear anything you've done to be a success. You are full of hot air until you share your stats with us.

I've already shared my success stories with everyone, and my methodology at the time worked, in both real estate and tech startups.

Quit acting like a prick, & tone down the negative/caustic attitude. Can't stand people like you & just had to call you out for ill behavior alone.

This is my last reply to you as I have better things to do with my time & will not be responding to any more posts from you. Consider yourself invisible.
 
Laguna21 said:
Then you tell me its a no brainer that any property will make equity within 5 years and post stats of SF & IE appreciation. If you knew anything about real estate, that statement alone is completely false.
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Do you have to resort to lying and putting words into my mouth to make an argument?  Classic strawman argument.  One simply needs to go back to my most recent post prior to this and see what was said.  Either you have a reading comprehension problem or you are lying.  Either way its bad.

The most ironic thing about your statement however is that even you think its ridiculous to assume that properties will always appreciate.  So how can you explain the fact that you are advising people to buy in bubbly areas like SF for long term buy and hold where you know for a fact it wont cash flow??? 

Laguna21 said:
I said in "general terms" that SF are good investments. It goes without saying that one would need to research the market conditions, rates, cap rates and so forth before going forward with it in the current year.
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no... this is your exact quote:



"@irvineboy: If you are an investor, you can't go wrong with investing in San Francisco properties. They will always be sky high due to limitations on new construction in the city.

Of course, there are other investors saying it's extremely risky to invest due to SF being the highest risk city of being in a bubble. But if you are keeping it as a long-term rental, then I don't see it as an issue at all.

If I had to choose between investing in Irvine vs SF - SF hands down."



So did you look at market conditions, rates and cap rates before you recommended to irvineboy to buy in SF???  Market in SF looks bubbly, rates are still low, cap rates are absolutely disgusting...  still a good time to buy a longer term buy and hold? 

Laguna21 said:
I am extremely well aware of how cash flow positive property investment works & don't need a lesson from you. I have years of experience investing in real estate.
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Dont be mad at me... you asked me for it.  If you have years experience, then you should know that cash flow is of primary importance when looking at long term buy and holds.

Laguna21 said:
What I meant by proving your methodology was: tell us YOUR success story behind your investment strategy. I have yet to hear anything you've done to be a success. You are full of hot air until you share your stats with us.
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If I told you what I own and how much I am worth would that make a difference?  First you probably wouldnt believe me.  Secondly, how successful I am does nothing to prove or disprove how wrong you are.  All you are doing by asking for my credentials is to distract from your lack of knowledge or the bad advice you are giving.

Laguna21 said:
I've already shared my success stories with everyone, and my methodology at the time worked, in both real estate and tech startups.
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Again being right for the wrong reasons.  Not hating on you, but hating on the fact that you are telling others to do things that make no sense.  This is why I said you had dumb luck. 

BTW you keep bring up your tech company... This gives you no additional credibility with the bad real estate advice you give.  Are you just trying to brag or distract from the topic on hand?

Laguna21 said:
Quit acting like a prick, & tone down the negative/caustic attitude. Can't stand people like you & just had to call you out for ill behavior alone.
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Your logic and reasoning is quite interesting.  I am a prick and negative and have a caustic attitude because I called out your bad advice?  Oh and now you just had to call me out by making strawman arguments and lying about what I said?  Bravo! 

Laguna21 said:
This is my last reply to you as I have better things to do with my time & will not be responding to any more posts from you. Consider yourself invisible.
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Thank you.  But one last thing.  Lets both take our own advice and put our money where our mouths are. 

You go and buy some rental in SF now with negative cash flow and hope for appreciation to make you some money.  I will continue to analyze deals with my "calculators" and look for properties with good cash flow selling for below current market value. 



 
@hello:

This will be indeed my last post. I can't leave it here without speaking my mind once more.

I take ZERO issue with anyone refuting my advice. (which was taken WAY too literally by someone that clearly lacks interpersonal/communication skills)

What I take issue with is assholes that hide behind the veil of a computer monitor & spew vitriol on the internet. I have ZERO tolerance for that, and will call you out on it.

As far as my statement re: investing in SF vs Irvine, you took that WAY TOO literally - of COURSE one would need to research all the #'s before proceeding. I was just making a statement from past investments that I made. Clearly the context of that sentence should have been paraphrased better by myself.

You are wound up like a clock, & are one of the most antagonistic people I have ever seen in any forum. I will not entertain any more of your posts, but if I see you spewing vitriol at other members of the forum, I will call you out.

As I said, quit acting like a callous, bitter person. You have no success story yet, & you are full of hot air until you do. Post it up when you have one. We'd all love to hear how all your investments have made a profit & more equity than the ones I have chosen to invest in.

 
aquabliss said:
Yikes Capella curse is still there I guess:https://www.redfin.com/CA/Irvine/126-Long-Fence-92602/home/58551576

Held this house for nearly 3 years and asking price is only $14k more than the sales price in September 2015?!

Don't get this, OH is nice and Capella floorplans are pretty good, this lot even has a view with a fancy glass fence, not much yard to speak of but that goes for most of OH...  What gives?
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Maybe going for a bidding war.
 
aquabliss said:
Yikes Capella curse is still there I guess:https://www.redfin.com/CA/Irvine/126-Long-Fence-92602/home/58551576

Held this house for nearly 3 years and asking price is only $14k more than the sales price in September 2015?!

Don't get this, OH is nice and Capella floorplans are pretty good, this lot even has a view with a fancy glass fence, not much yard to speak of but that goes for most of OH...  What gives?
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3110 sq ft house on a 3760 lot.  Are there any recently built SFRs that have a worse ratio?  Definitely no bidding war on this property.
 
genuine question -- what is the optimal lot size to built up home sqft ratio  (or at least minimum)  ?  would love to get insights from people who have been looking at this for some time. 
 
fortune11 said:
genuine question -- what is the optimal lot size to built up home sqft ratio  (or at least minimum)  ?  would love to get insights from people who have been looking at this for some time.
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Not sure what the optimal is, but def needs to be bigger than current offerings.  I mean, they build up (10ft ceilings) and offer such small lots that you may not get enough sunlight...

(Also ratio may not make sense as some sq ft is upstairs and not all builders have the same floor plans, like large entry with high ceilings compared to hallway entry with second floor above counting in sq footage.  Or home with 3 floors, like the Auburn basement plan, etc)
 
fortune11 said:
genuine question -- what is the optimal lot size to built up home sqft ratio  (or at least minimum)  ?  would love to get insights from people who have been looking at this for some time.
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Get the biggest one you can with a floorplan you like that's not around any major streets.  If they sold huge lots in Irvine there would be a long line with people ready to throw down cash for the lot premium.  Any one know what the largest lots are currently for new builds for a roughly ~3k sq ft home?  Anything greater than 6000-7000 sq ft available in Irvine?
 
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