All Encompassing Mortgage and Real Estate Thread

[Neonmoon 38126]

21 minutes ago, jimmyjazz said:

That was my conclusion on the last storage unit I rented.  "Why am I paying $100 a month to store $70 worth of crap?"

I have tried to relay this information to relatives. They are not receptive to reality. It all boils down to “but this (old piece of shit) table was my grandmothers!”

Edited May 14, 2021 by Neonmoon

[Gil Bang 25505]

That RV park idea sounds pretty management-intensive. 

Edited May 14, 2021 by Gil Bang

[Wulaw Horn 18917]

4 hours ago, CHIEF said:

I'm convinced that RV parks is where it's at. I have my eye on some acreage at a rural intersection on the outskirts of Ft. Worth. City sewer and water comes to the back of the property. I can buy the property and put in about 100 hookups, with sub-meters for about $1mil. At 60% occupancy that is still $24k/month. In ten years when the city grows out there I can close shop and sell the land by the square foot.

CHIEF

My dad wanted me to do that with him. I was never seriously interested as I didn’t have the capital but takes to a couple dudes who did that and it was a good business model for them. 

[Pato del Muerto 51914]

4 hours ago, CHIEF said:

I'm convinced that RV parks is where it's at. I have my eye on some acreage at a rural intersection on the outskirts of Ft. Worth. City sewer and water comes to the back of the property. I can buy the property and put in about 100 hookups, with sub-meters for about $1mil. At 60% occupancy that is still $24k/month. In ten years when the city grows out there I can close shop and sell the land by the square foot.

CHIEF

Buy land. Fence it. Inside the perimeter, have space for covered boat and rv storage. Inside of that, the storage lockers.  The lockers may never have much of value, but the boats and rvs will have value other than the absolute shittiest ones and people with those usually won’t pony up the $80 or $125 a month to store them.

and none of the HOAs around austin or probably most Texas cities will let you keep them on your yard or driveway.

I don’t know the cost of entry to this market but it seems like a winner all over. No wood in the construction materials either. 

Edited May 14, 2021 by Pato del Muerto

[Gil Bang 25505]

1 minute ago, Pato del Muerto said:

Buy land. Fence it. Inside the perimeter, have space for covered boat and rv storage. Inside of that, the storage lockers.  The lockers may never have much of value, but the boats and rvs will have value other than the absolute shittiest ones and people with those usually won’t pony up the $80 or $125 a month to store them.

and none of the HOAs around austin or probably most Texas cities will let you keep them on your yard or driveway.

I don’t know the cost of entry to this market but it seems like a winner all over. No wood in the construction materials either. 

That's not what we are discussing. He's talking "campground" type RV Park.  Not a storage lot. 

[UTGrad98 2183]

Denton County property values came out today. Our Flower Mound home went up the max 10%. Gonna protest

[Pato del Muerto 51914]

1 minute ago, Gil Bang said:

That's not what we are discussing. He's talking "campground" type RV Park.  Not a storage lot. 

I know. But yeah that’s labor intensive.  Storage is easier and uncovered storage only costs the land price, covered is cheaper to build than a full building and even less maintenance because no doors or locks. 

[Gil Bang 25505]

3 minutes ago, Pato del Muerto said:

I know. But yeah that’s labor intensive.  Storage is easier and uncovered storage only costs the land price, covered is cheaper to build than a full building and even less maintenance because no doors or locks. 

Not to pick nits, but even with uncovered, you've got fencing, lighting/security and grading/paving to consider. 

[Pato del Muerto 51914]

3 minutes ago, Gil Bang said:

Not to pick nits, but even with uncovered, you've got fencing, lighting/security and grading/paving to consider. 

All I’m saying is if you build out a storage place, use some of the space for boat and rv. The spots cost just as much, are more likely to be paid on time, and hold an item of likely more value than the couple months rent you lose for nonpayment.  And you are already paying for fencing, grading, and paving so having some of the area with no construction or limited construction makes it a little cheaper. 

[Gil Bang 25505]

6 minutes ago, Pato del Muerto said:

All I’m saying is if you build out a storage place, use some of the space for boat and rv. The spots cost just as much, are more likely to be paid on time, and hold an item of likely more value than the couple months rent you lose for nonpayment.  And you are already paying for fencing, grading, and paving so having some of the area with no construction or limited construction makes it a little cheaper. 

Oh.  That makes sense, sure. 

[CHIEF 5035]

Campground has minimal construction cost, my concrete guy will do it for cost. Two spots are free for the staff (meter readers, call lawn care, call on utility problems, non-paying customers, etc.)  No weather problems (hail, tornadoes, flash flood). It would cost me four times as much to do a storage facility, not to mention the insurance. RV campgrounds will generate the same income with a quarter of the sunk costs. I was going to build one behind the Round Rock Cracker Barrel back about 2003-2004 on 24 acres for sale, but the city wanted an electric meter at each location ($2400), so the numbers didn't work. RV'ers being responsible for their own insurance is the main tipping point that favors campgrounds over storage units. Plus storage facilities are a dime a dozen in our area, You can get covered RV storage (50x12) for $130/month. A 50 amp hookup minus electric is $400/month uncovered.

CHIEF

Edited May 15, 2021 by CHIEF

[T’Boo Ted Marshall 2718]

What is the option of homes built Beazer and Kindred?

[T’Boo Ted Marshall 2718]

Sorry. What is the opinion of homes built by those builders?

[immamac 41337]

On 5/14/2021 at 9:06 AM, jimmyjazz said:

How big were those lots, if you don't mind me asking?

I think 6800sq ft? Maybe smaller...Mine is one of the "oversized" zilker lots 

[LABEVO 928]

On 5/14/2021 at 5:50 PM, Wulaw Horn said:

My dad wanted me to do that with him. I was never seriously interested as I didn’t have the capital but takes to a couple dudes who did that and it was a good business model for them. 

im bullish on RV parks as an investment. know a few people doing it and private equity has started to execute on this thesis 2-3 years ago. still early stages but i would imagine just outside of major metro areas or tourist destinations are best. 

the spread of type is wild as some of these places have pools, dinning halls, activities, etc so can either be basically a parking lot or upscale resort. 

the upfront capital to execute is fairly manageable. the few RV parks that i diligence for market intel 2 years ago had a waitlist of months to book a spot. 

Edited May 17, 2021 by LABEVO

[CHIEF 5035]

7 hours ago, LABEVO said:

im bullish on RV parks as an investment. know a few people doing it and private equity has started to execute on this thesis 2-3 years ago. still early stages but i would imagine just outside of major metro areas or tourist destinations are best. 

the spread of type is wild as some of these places have pools, dinning halls, activities, etc so can either be basically a parking lot or upscale resort. 

the upfront capital to execute is fairly manageable. the few RV parks that i diligence for market intel 2 years ago had a waitlist of months to book a spot. 

Most employees of major commercial contractors get a per diem. Most of them buy an RV to live in, and pocket the remainder of the per diem. That will be my target customer. The land I'm looking at should keep me full for the next 10-15 years. My uncle that sold the storage facility will be my primary investor to take down the land cost. I'm sure it will take 6 months to a year to get the proper permits and the engineering done.

CHIEF

[LABEVO 928]

59 minutes ago, CHIEF said:

Most employees of major commercial contractors get a per diem. Most of them buy an RV to live in, and pocket the remainder of the per diem. That will be my target customer. The land I'm looking at should keep me full for the next 10-15 years. My uncle that sold the storage facility will be my primary investor to take down the land cost. I'm sure it will take 6 months to a year to get the proper permits and the engineering done.

CHIEF

i think that would be harder as you are betting on long-term and multiple construction projects. would that be no-where as there a lack of talent, housing, etc. or do you expect construction workers to live outside a city and do this living for cheaper.

i dont know that population well but struggle with that market.

[CHIEF 5035]

2 minutes ago, LABEVO said:

i think that would be harder as you are betting on long-term and multiple construction projects. would that be no-where as there a lack of talent, housing, etc. or do you expect construction workers to live outside a city and do this living for cheaper.

i dont know that population well but struggle with that market.

Its in an area that is rural but connected to downtown Ft. Worth and is 15 minutes out. All of the roadways in the area are adding multiple lanes, including the one the property is on. For four years DOT road workers will be able to be within 5-6 miles of work.

CHIEF

[DonkeyCigars 144]

I was presented an opportunity to invest in a big RV park in Iowa. Was intrigued but ultimately passed. I'm kinda regretting now.

[Gil Bang 25505]

I know a place at Lake Havasu that did the RV park and went "Condo" with it.  They sold the spaces, and have monthly CAM charges. 

[UT_OB1 2193]

There’s one off 146 just north of Seabrook that has ~400sqft units above them. I think they have kitchens. Also have a pool on site. Looks really nice. I think they are in a good spot to get the contractors all the way out to 225, but also get families coming to be near Kenna, clear lake, and the bay for vacation 

[jimmyjazz 45055]

On 5/15/2021 at 1:05 PM, immamac said:

I think 6800sq ft? Maybe smaller...Mine is one of the "oversized" zilker lots 

$5.4M per acre.  Holy smokes.

(Yeah, very small lots, so it wouldn't scale at that price, but still.  My lot is 3.5X that size and if I squint I can sorta convince myself it would price out at ~ $1.7M per acre.

[immamac 41337]

2 hours ago, jimmyjazz said:

$5.4M per acre.  Holy smokes.

(Yeah, very small lots, so it wouldn't scale at that price, but still.  My lot is 3.5X that size and if I squint I can sorta convince myself it would price out at ~ $1.7M per acre.

There's a full acre on Kinney for sale for 4M or something insane. So the math checks out. 

[jimmyjazz 45055]

Yeah, I think I found that . . . looks like two lots paired, $4.5M for the full acre if I'm reading it right.

It's zoned SF3.  Jeebus.

[Beantown Express 2.0 6488]

Not sure if others are in the market to move but I have been thinking of moving to a lake lot in my hood if I get the chance but its starting to look like I will get hosed with this pursuit.  One of the builders in my neighborhood in DFW, Taylor Morrison, just announced they will no longer take contracts on their new home builds but instead they will mimic the pre-owned market and let people put in blind bids for the opportunity to let them build you a home.  I guess this means they will say, this lot and house is normally $700K so put your bid in and if you bid high enough we will then build you your house.  Does this sound like the norm for new builds?  I know the pre owned homes in my neighborhood are going on the market and selling in 24 hours.  One last week went for $140K over asking and the buyer waived appraisal and waived inspection.  A friend of mine that lives up the street moved a month ago and got 12 offers within 24 hours and went with the one that was $60K over his asking price, buyer paid cash and waived the inspection and appraisal.  I guess I have never bought or sold during a market like this so not sure if its wise to even try to buy a new house.  I have been waiting for a lake lot for a year and now the market goes nuts just when the lots are about to be released meaning I am screwed.  

[mchookem 15429]

i really feel for you guys trying to buy wherever in this market, especially y'all with growing families. man it sucks, i would be depressed af. nobody wants to drop outrageous $$ for a home they really don't like. boo.

[TTU13 108]

Wife and I were planning on keeping our “starter” house (were youngest in our neighborhood) for a couple more years. But how things are shaping up, we’re considering making this a longer term house and buying a small condo or property somewhere as a vacation place instead.

Crazy how things have changed in the last two years.

[CHIEF 5035]

The builders around here are now asking for $10k in non-refundable earnest money on new builds. This is in a rural community.

CHIEF

[T’Boo Ted Marshall 2718]

Ouch.

[Beantown Express 2.0 6488]

I heard Coventry Homes is making you sign a document on new builds that says your price can change by the time they finish building and you will owe whatever it is at that point.  No limit like it could go up 10% or something just a “hey, we have been building your house for the last 6 months and now that it’s almost finished you owe us an extra $100K since materials have gone up in price. Don’t like it then we will just sell your home to one of the hundreds of people waiting for a house.”

[Esque 135]

I understand that approach.  The alternative is it is a speculative build and they sell it for that price anyways in market conditions when it is completed.  Home building is really an onsite manufacturing business and therefore is sensitive to these large price swings in commodities.  Even secondary materials are reaching all time highs and home builders are having to increase wages to get labor back to the job site because they've been making comparable money by sitting at home on unemployment.

The Taylor Morrison approach is SUPER interesting.  That's an administrative nightmare though, so I don't see that being a long-term trend.  But I understand it in this market and expect they will increase their gross margin by taking that approach.

[Beantown Express 2.0 6488]

I am trying to build a Britton home and they announced all new builds will be specs and you can’t pick out anything.  When your turn comes up on their list you can take it or leave it as is. It’s hard to spend that much on a new build and you can’t even pick the back splash or flooring.

[jimmyjazz 45055]

A while back we bought a fairly large, steep lot on Cat Mountain, and started working with an architect on a custom home design.  Because of the steepness of the lot, it called for a crap ton of concrete.  As the months rolled on, concrete was going up in price, as was the amount needed to get the house we wanted.  Holy smokes, that was depressing.  It seemed like every week we were slashing some other feature and sometimes square footage just to stay on budget.

We ended up just selling the lot at a very small loss and buying a nicer house a half mile away.  Building in an escalating commodity market is terribly stressful.

[TTU13 108]

I heard Coventry Homes is making you sign a document on new builds that says your price can change by the time they finish building and you will owe whatever it is at that point.  No limit like it could go up 10% or something just a “hey, we have been building your house for the last 6 months and now that it’s almost finished you owe us an extra $100K since materials have gone up in price. Don’t like it then we will just sell your home to one of the hundreds of people waiting for a house.”

Wow. One of my neighbors is buddy buddy with our Coventry sales guy still. I’ll ask him to ask the sales guy about that.

[Wulaw Horn 18917]

3 hours ago, Beantown Express 2.0 said:

I heard Coventry Homes is making you sign a document on new builds that says your price can change by the time they finish building and you will owe whatever it is at that point.  No limit like it could go up 10% or something just a “hey, we have been building your house for the last 6 months and now that it’s almost finished you owe us an extra $100K since materials have gone up in price. Don’t like it then we will just sell your home to one of the hundreds of people waiting for a house.”

Do you get your earnest money back? 

[Beantown Express 2.0 6488]

Just now, Wulaw Horn said:

Do you get your earnest money back? 

I dont think so but I am not sure.  I was told that by a friend and its not in my neighborhood but somewhere else in DFW.

[Assman 1830]

My wife has been selling a lot of the lower-end new homes around the DFW area (DR Horton, Lennar, etc.) and it seems they're not playing the games that I'm reading here, but they're just raising their prices to the moon to see where the ceiling is.  Builders are making money hand over fist.

[Wulaw Horn 18917]

5 minutes ago, Assman said:

My wife has been selling a lot of the lower-end new homes around the DFW area (DR Horton, Lennar, etc.) and it seems they're not playing the games that I'm reading here, but they're just raising their prices to the moon to see where the ceiling is.  Builders are making money hand over fist.

What geographic area does she work?

[Assman 1830]

2 minutes ago, Wulaw Horn said:

What geographic area does she work?

All DFW.  She's sold from Weatherford, to Royse City, to Forney, to Waxahachie. 

[tokamak 6321]

Is there eventually going to be some blowback from (presumably lower-income) buyers paying exorbitant prices for tract homes in motherfucking Royse City?

I know that mortgage rates are historically low right now, but somehow that feels like a Subprime Mortgage Crisis 2.0 starter kit to me.

[Wulaw Horn 18917]

4 minutes ago, tokamak said:

Is there eventually going to be some blowback from (presumably lower-income) buyers paying exorbitant prices for tract homes in motherfucking Royse City?

I know that mortgage rates are historically low right now, but somehow that feels like a Subprime Mortgage Crisis 2.0 starter kit to me.

I mean- as long as they can make the payment it's not a problem.  Jobs, Jobs, Jobs.  I don't think underwriting has been stricter for a while than it has right now- so most of these people should be able to afford their payments as long as they stay employed.  And have some history of paying most of their bills most of the time. And the market is rising so there is always the greater fool theory in play.  

In short- I don't think this is like subprime 2008 at all.  Lots of differences that ultimately matter a lot. Now- do I think the new admin might loosen requirements to allow more people to qualify?  Maybe yes (that would be a payoff to a lot of their voting block- and could really benefit people in that bucket that might otherwise get left behind- I'm hugely pro homeownership- and I do what I do in large part b/c I believe that's the way to the American dream and making better families and communities-  but it's yet to be seen if the new admin is going to be hostile to SFR/suburbia and look instead to density and urban core- which- to be fair- also has its plusses).

No need to worry about housing bubble or subprime 2.0 right now from my perspective and reading of the tea leaves right now.  Back in 06-08 I was seeing a ton of loans that just didn't make sense (I was in title at that time so saw a hug cross section of loans), I just don't see that right now- or at least I'm certainly not doing any (not as a moral stance- just can't get those people to qualify)

 

 

[UTPhil2006 3753]

Yeah UW is fairly tough nowadays 

[Anastasis 23191]

Holy shit.

 

Neighbor  just listed @ >2x his purchase price from mid 2010s.  Didn't even wait for a bidding war, took an all cash offer after the first showing. Jesus Christ can't wait till TCAD gets a hold of that shit.    

Edited May 19, 2021 by Anastasis

[LCHorn 2527]

What was the price?

[Anastasis 23191]

1.XMM

[Wulaw Horn 18917]

What's the deal on all these all cash offers.  They aren't all all cash right?  My understanding is that someone on the real estate side is arranging bridge financing for some of these people so that it plays as a cash offer- is that correct?

I mean I know some of these people are moving in from OOS and cashed out there and have the actual cash for themselves- but that's not all of the all cash offers in the marketplace, is it?

[Beantown Express 2.0 6488]

36 minutes ago, Wulaw Horn said:

What's the deal on all these all cash offers.  They aren't all all cash right?  My understanding is that someone on the real estate side is arranging bridge financing for some of these people so that it plays as a cash offer- is that correct?

I mean I know some of these people are moving in from OOS and cashed out there and have the actual cash for themselves- but that's not all of the all cash offers in the marketplace, is it?

I think there is a lot of cash out there.  People have made a lot of money in the stock market the last few years and have cashed out and want to invest it into real estate.  I have two houses in my neighborhood about to go on sale and just found out the same guy owns both and lives in neither.  He moved from Cali when Toyota moved to DFW and he bought 3 homes with cash.  Lived in 1 and now is about to make a killing selling the other 2.

[Catpfish 618]

You also have a lot of investors searching for returns.  You get basically zero from a bank, so why put it there?  The stock market seems like a bigger risk than housing right now...so in comes the cash.

 

 

 

[Assman 1830]

6 hours ago, tokamak said:

Is there eventually going to be some blowback from (presumably lower-income) buyers paying exorbitant prices for tract homes in motherfucking Royse City?

I know that mortgage rates are historically low right now, but somehow that feels like a Subprime Mortgage Crisis 2.0 starter kit to me.

Rates are still so low right now that I don't see a bubble burst like in 2008.  I'm making up numbers so the math might not check out, but if 5 years ago people could afford a $250K at 4%, then now they're able to afford $350K at 3%. 

My mom lives in New Braunfels and is wanting to move up to DFW to be closer to us.  She's going to make a killing when she sells, but she's discouraged that she can't find anything near us for less than $400K.  Even though she'll be able to afford it, it's a tough pill to swallow for someone that's retired with no income but SS.  $200K used to be the standard DFW starter home around here, but $300K is the new $200K and I don't see that changing.

[Pato del Muerto 51914]

5 hours ago, Anastasis said:

Holy shit.

 

Neighbor  just listed @ >2x his purchase price from mid 2010s.  Didn't even wait for a bidding war, took an all cash offer after the first showing. Jesus Christ can't wait till TCAD gets a hold of that shit.    

Is he moving somewhere that isnt crazy so he doesn’t have to dump the money right back into the next house?