Ask tommy2 about Real Estate

[tommy2]

Tough one...location x3?

[tommy2]

Yes, there is a bubble, but it has been overstated by the media. It is concentrated in areas where heavy speculation and tight supply have existed. SoCal, San Diego, Miami, NYC, etc. In 2007 something like a trillion dollars in ARM (adjustable rate mortgages) reset (go higher). Lots of people are going to lose their homes and real estate investment properties.

Don't know about Hawaii specifically, but I would guess it is insulated somewhat. My understanding on that market is that there is very limited supply that is "affordable" for regular people--if you own something like this, demand will remain high.

[scotchnrocks]

What is your opinion on high rise condos in cities like Atlanta? Most I've looked at are 1bd / 1ba all glass walls @ 800sf with great location in the 210k range. How good/bad will these do over the next 7 years?

[tommy2]

Vehn,

Your question is tough. I am not a banker or in the credit game. I would defer to others here. Sorry.

[tommy2]

Condos are about to be hit hard in most major cities that have experienced the full effects of the housing boom...I am pretty sure ATL is in that category. Remember, RE development is a long tailed game--if I start to develop a project in 2004, I might not be building until 2007. This means that even in markets where there is a glut of product, more is coming. Developers run in packs and often share the same market reports (or use the same expert analysis to make decisions)--like a lot of things, last ones in get hurt. My advice? Wait 6 months til the market is even more flooded, then start picking through the rubble for a good deal.

[A_C_Slater]

Are there any essential books I need to read?

[tommy2]

It depends on what you want to do and what your background is. Are you strong in excel? Do you have a construction background? Are you in it for a career or a second income? Give me a little more info. and I can be more helpful.

[ItalianFX]

For flipping properties, is it absolutely necessary to be in a good market where you can sell it quickly?

I know it sounds so simple, but is it really?

I live in an area that is a good buyers market, but I believe it would be hard to resell or find tenants.

This is why I have been so hesitant to get into RE.

[ItalianFX]

Oh yeah, and for anyone interested...

This is an absolute must read website. It's like the 2+2 of Real Estate...

www.creonline.com

[scotchnrocks]

You're spot on about the glut. There are three new high rise condo developments that I know of that are just getting foundations started. So say I'm able to pick through and find a deal in a year or so, is it possible to get financing through the developer at a lower rate than mortgage banks are charging if interest rates are around 8% on a 20 year fixed?