Qwerty and Trojan how viable is Panda's 8 year investment plan in Johns Creek

[IndieDev]

So far this is a wipe out.

Panda, can I ride in your Ferrari when you come back to Irvine?

 

[irvinehomeowner]

You are probably way ahead of the game in this area than me as I moved here without knowing a soul.

No... I live in Irvine... no one wants to know you here... especially if you carry a big bat and walk a dog.

Getting back to the topic of the thread... I think any real estate endeavor in this climate is risky and while I understand what you're shooting for, you should NOT use Irvine as an example of why it will work. Irvine is an anomaly... it's a unicorn... fundamentally, prices should not be where they are (yes that's right Indie), so you should be looking at worst case scenarios instead of Irvine case scenarios.

I think there are too many unknowns in JC... I criticize IR for investing in LV and that's more of a known area. But, if you can make it work... good luck... are you still in gold?

 

[usctrojancpa]

Panda has the potential on one day coming back to CA and being a broker that I can hang my license under so....

Panda 6-0

 

[irvinehomeowner]

So far this is a wipe out.

That's okay... I don't mind losing... and I'll always be 1-0 over you. 

So... all you guys now think that Panda's "Occupy Johns Creek" movement is a good plan?

 

[irvinehomeshopper]

Buying a house in Irvine is the worse investment with no capital left for the rainy days. There are too many life emergencies where you will need cash quick and selling a home is not an option unless taking a huge loss to get to quick cash.

It should be a home for enjoyment and from a business perspective all pros would agree it is dead last. The opportunity was back in 2002 and it will not return for another few decades. 

I know that Panda will come back because his parents and inlaws are here. Families is the biggest reason why people want to move closer or away.

 

[qwerty]

So far this is a wipe out.

That's okay... I don't mind losing... and I'll always be 1-0 over you. 

So... all you guys now think that Panda's "Occupy Johns Creek" movement is a good plan?

IHO - you should have dropped the too short song: "like 10 to 9, 3 to 2, ill always be one up on you"  that has a much better flow than "ill always be 1-0 over you"

 

[qwerty]

IHO - i joined a company a couple of months after it was bought out, then i joined another company right after an ipo, talk about bad timing.

Good luck on your buyout/IPO and i hope you have better luck than i have.

 

[usctrojancpa]

IHO - i joined a company a couple of months after it was bought out, then i joined another company right after an ipo, talk about bad timing.

Good luck on your buyout/IPO and i hope you have better luck than i have.

That's similar to the kind of luck that I had in terms getting a CIF Football Champ ring....MD won the CIF title in my Sophmore year and then the year after I graduated.  We lost in the finals to Rialto in my senior year (we got crushed...45-3 if I remember right). 

 

[irvinehomeowner]

The funny thing is if I would have been part of that pivotal buyout, I probably would not even be living in Irvine... at the time I was also looking at Newport Beach houses.

 

[IndieDev]

So far this is a wipe out.

That's okay... I don't mind losing... and I'll always be 1-0 over you. 

So... all you guys now think that Panda's "Occupy Johns Creek" movement is a good plan?

IHO - you should have dropped the too short song: "like 10 to 9, 3 to 2, ill always be one up on you"  that has a much better flow than "ill always be 1-0 over you"

I agree. Gangsta rap makes everything sound cooler. The way IHO delivered it almost sounded like a jaded lover.

 

[panda]

IHO, in my humble opinion, when something already well known, it is good time to get out. I am completely out of my gold positions as I feel that $1700 Gold is starting to get expensive. Awgee can can argue it will rise to $5,000, but now i am looking at bargain opportunities elsewhere. This year has been a little tougher to predict the market. I am still short EURO. Again... I can be wrong on this trade, but my gut tells me to hold further.

You can't really compare JC to LV. JC is a very clean area, low crime, excellent public schools, and great place to raise a family. I know that none of you will seriously buy, move, or invest in JC, but it is just good to get a different prospective sometimes. Irvine and Johns Creek are the two real estate markets i find facinating and enjoy researching. These are the only two cities I can see myself living in. If you were to ask me about the Chicago RE market... I would tell you that i don't have a clue.

I'm not a god and I don't have a crystal ball, however I do the see good setup happening here in Johns Creek where i am planning to put some skin in the game.

You are probably way ahead of the game in this area than me as I moved here without knowing a soul.

No... I live in Irvine... no one wants to know you here... especially if you carry a big bat and walk a dog.

Getting back to the topic of the thread... I think any real estate endeavor in this climate is risky and while I understand what you're shooting for, you should NOT use Irvine as an example of why it will work. Irvine is an anomaly... it's a unicorn... fundamentally, prices should not be where they are (yes that's right Indie), so you should be looking at worst case scenarios instead of Irvine case scenarios.

I think there are too many unknowns in JC... I criticize IR for investing in LV and that's more of a known area. But, if you can make it work... good luck... are you still in gold?

 

[irvinehomeowner]

The way IHO delivered it almost sounded like a jaded lover.

Only to you.  :-*

 

[akim997]

first...  30 year treasury isn't the risk free rate...  90day T-bill is standard...  but you might as well use 0% for now (and the near future)...  a lot of CMAs (capital market assumptions) have been adjusted to reflect this.

second...  Tbills are not bonds.  They are zero's that are 1yr or less. 

I work and talk to people from Coke.  Even people from the area will agree that the aTl /JC /GA will likely NEVER experience the same type of growth (and RE appreciation) that SoCAL did (or Irvine from 1960's to today)...    I agree with IHO in that it's a bit ridiculous to even speculate like that. 

I've helped my family who has lived off RE investing for decades (since my dad passed) and I think it's a pretty difficult venture...  Personally, I don't see the risk/return proposition...  I feel I can make more money at work, with less at risk (no capital investment, just human capital - my time)...    Managing RE - it's tedious..  if it were rewarding enough, it could be a full time job (it's my mom's and she's over 70!)...  I'm trying to get my mom out of the business for her sake - dealing with tenants, repairs, etc. can be quite a lot of work (at least in a 9 unit apartment) - there is ALWAYS something going on.  If what people are saying is true and that 9 houses is more difficult than a 9 -unit you should be prepared for the worst.  I will agree with what they say that the multi unit is such that the vacancies and non-performers are mitigated by paying tenants (diversification).  Over past 2 years there has been a delinquent or vacant apartment at least every other month.  I realized that RE is capital intensive, and its easier if you have a lot of money (we don't have a lot of free capital).   

 

[panda]

Akim,

No business is easy and without risk. If this was the case, everyone would leave their full time jobs and start a business. Regarding JC and ATL market, i never mentioned that i see a 300% appreciation like Irvine from 1996 - 2006. In Atlanta, you can buy properties for cash flow or maximum appreciation. I am however optimistic that JC's home values will double in 10 years. Right now it so much cheaper to buy then to rent in Johns Creek. If I were to leave my current residence and rent it out, it would rent out within a week for $3000. My total carrying cost on the home $2400/month. Look at the link of the 2500 sq/ft Irvine SFR in Fox Hill my wife used to live at when she was in junior high. The home trades for $750,000 but the rent is $3000. This tells me that the properties in Irvine is grossly overvalued.

Akim, I never shared with you my failures as an land lord / investor did i? I rented my townhome that i purchased in 2004 in Chicago in June of last year and i had a major flood two weeks after I moved. I didn't have flood insurance so I had to come up with $15,000 out of pocket to DEMO and restore the basement. To makes matters worse, I didn't screen my tenants properly who avoided my calls and provided me with every sob story you can imagine not to pay rent. I asked the Lord that i would not take these people to eviction court, and he faithfully answered my prayers.

I purchased a 3500 sq/ft SFR next to Sugarloaf Country Club at the peak of the market in 2006 at $546,000. The  appraisal value of that home is $400k if i were to sell the property today. What a terrible way to start a rental business right? What saved me with this property is that by God's grace, i had a CEO of major retail chain in Atlanta rent from me for the past 6 years for $3000/month. My carrying cost on this home is $2350. Again, by God's grace, I was able to replace the bad tenant with a mother who is trying to get back on her feet from a harsh divorce. She is a VP of a major financial institution in Chicago and both my tenants make more money than i do. My new Chicago tenant called me yesterday asking me if she could remodel the kitchen on her dime with some really nice granite counter top. She is also paying me $2,180 while my orginial listing rental price was $2000/month. This is what i call Grace.

With two major set backs like this, I might as well quit now right? Not a chance. I am more driven to succeed, screen for the right tenants, lock in a low 30 year fixed rate, and follow through on my 8 year plan for this SFR rental business.


 

first...  30 year treasury isn't the risk free rate...  90day T-bill is standard...  but you might as well use 0% for now (and the near future)...  a lot of CMAs (capital market assumptions) have been adjusted to reflect this.

second...  Tbills are not bonds.  They are zero's that are 1yr or less. 

I work and talk to people from Coke.  Even people from the area will agree that the aTl /JC /GA will likely NEVER experience the same type of growth (and RE appreciation) that SoCAL did (or Irvine from 1960's to today)...    I agree with IHO in that it's a bit ridiculous to even speculate like that. 

I've helped my family who has lived off RE investing for decades (since my dad passed) and I think it's a pretty difficult venture...  Personally, I don't see the risk/return proposition...  I feel I can make more money at work, with less at risk (no capital investment, just human capital - my time)...    Managing RE - it's tedious..  if it were rewarding enough, it could be a full time job (it's my mom's and she's over 70!)...  I'm trying to get my mom out of the business for her sake - dealing with tenants, repairs, etc. can be quite a lot of work (at least in a 9 unit apartment) - there is ALWAYS something going on.  If what people are saying is true and that 9 houses is more difficult than a 9 -unit you should be prepared for the worst.  I will agree with what they say that the multi unit is such that the vacancies and non-performers are mitigated by paying tenants (diversification).  Over past 2 years there has been a delinquent or vacant apartment at least every other month.  I realized that RE is capital intensive, and its easier if you have a lot of money (we don't have a lot of free capital).   

 

[qwerty]

first...  30 year treasury isn't the risk free rate...  90day T-bill is standard...  but you might as well use 0% for now (and the near future)...  a lot of CMAs (capital market assumptions) have been adjusted to reflect this.

second...  Tbills are not bonds.  They are zero's that are 1yr or less. 

man, what are you a CFA, getting all technical and all.  yes, technically you are correct on your definitions of risk free rate and tbill. from a practical perspective though, the "risk free rate" on say a 10 year investment would be the rate on a US treasury debt security (or what would you call it, a note). just like when we value our company's stock options and we need to input the interest rate, into the black scholes mode, we use the equivalent "risk free rate" that matches the life of the option.

 

[IndieDev]

Panda is making a believer out of me. He's intelligent, spiritual, and driven to succeed. I may need to check out this Johns Creek action.

 

[socal78]

I asked the Lord that i would not take these people to eviction court, and he faithfully answered my prayers.

Don't leave me hanging. What happened?? They suddenly paid up? Moved out? Also... when they were avoiding payment / dishing out sob stories, it wasn't during the time of the flood, was it? I can't remember if the house was occupied by renters yet or not. If it was during The Great Flood that's kind of a different story.

 

[panda]

Socal, let's just say these guys made Mr and Mrs. Panda miserable the first 6 months we moved to JC. The mother and son were on the contract for 2 years for $2250/moth and only 3 people were supposed to live there. They brought two more people without my knowledge. The mother and son would pull stuff like I will pay you $800 by the 5th and pay you $1000 on the 24th. I am visiting my boy friend in Singapore for a month, hopefully i will be back to pay you rent. I am sorry Panda, my son just lost his job can please reduce the rent 50%? Since the basement is not finished yet, I think we should only pay you $1500. Later I find out the youngest son is smoking pot on my property.

Luckily i made a deal with them if they pay me $1800/month and they allow me to show my property to find a new tenant, I will not evict them and will return their security deposit with this new arrangement. Even when i secured my new tenant, they were giving me a hard time about leaving.....
SoCal... when you trust in the Lord.... everything just seems to work out in the end.

I asked the Lord that i would not take these people to eviction court, and he faithfully answered my prayers.

Don't leave me hanging. What happened?? They suddenly paid up? Moved out? Also... when they were avoiding payment / dishing out sob stories, it wasn't during the time of the flood, was it? I can't remember if the house was occupied by renters yet or not. If it was during The Great Flood that's kind of a different story.

 

[socal78]

That's rough, Panda. Especially dealing with that at the same time as your big out-of-state move with the wife and twins. I'm sorry you had to go through that all at once. You sound like a really good, level-headed landlord, though, in dealing with things in a professional manner.

SoCal... when you trust in the Lord.... everything just seems to work out in the end.

Yes, I agree with you whole-heartedly. Panda, don't take this the wrong way. I was shocked when I found out you are Korean. Your Evangelical-IQ is so high that I thought you were white this whole time. I think you are the smartest Asian I've ever met in cyber space and in the real world!

 

[akim997]

first...  30 year treasury isn't the risk free rate...  90day T-bill is standard...  but you might as well use 0% for now (and the near future)...  a lot of CMAs (capital market assumptions) have been adjusted to reflect this.

second...  Tbills are not bonds.  They are zero's that are 1yr or less. 

man, what are you a CFA, getting all technical and all.  yes, technically you are correct on your definitions of risk free rate and tbill. from a practical perspective though, the "risk free rate" on say a 10 year investment would be the rate on a US treasury debt security (or what would you call it, a note). just like when we value our company's stock options and we need to input the interest rate, into the black scholes mode, we use the equivalent "risk free rate" that matches the life of the option.

hmm yeah, that was annoying of me...    sorry...  and you are correct in that we value company stock options the same way (10yr treasury for 10yr option term)...