Ask tommy2 about Real Estate

[tommy2]

[ QUOTE ]
Tommy-
Lots of people asking about individual RE, but any ideas about commercial, since that's what you do? There's an area nearby to me that seems prime for expansion with some available land, but I'm a commercial noob. I figure with the downward market forces it might be a good time to get in "on the cheap", but I'm sure I'm likely wrong since none of the pro's have done anything with the area I'm considering.

How could I get experience with small commercial projects? Is it possible to do significant commercial development as a part-timer? Can someone do a strip-mall type project from scratch? Any way of approaching established developers to partner with?

Thanks!

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By the way, I consider this to be THE story to watch as far as interest rates and macro RE stuff:

http://www.globalresearch.ca/index.p...articleId=5039

[Anheg]

I noticed you have a JD; how do you think that has helped you in your current field? Is it useful/valued by real estate firms (development or otherwise)? Thanks.

[maxtower]

Tommy,

Was the increase in the price of commercial real estate as dramatic as the residential price increase? It seems like commercial real estate will more closely match rent levels, since no one really buys commercial to raise their kids in.

To everyone looking for a bottom on real estate, I think this will be much easier to figure out that a stock market bottom. Just watch the rental income to cost of owning ratio. Once you can buy and rent a property and be close to break even cash flow, then real estate has bottomed (or close) in your area. If an overreaction occurs in a hot area (CA, FL, AZ) and you can buy a place to rent for positive cash flow, jump in quickly.

[nineinchal]

Bottom line it. Where do we go from here insofar as percentage decline in asking prices? By May? June? July? Aug? Sept? Oct?

I am looking to buy a condo in Atlantic City. However, I feel if I wait it out until after the summer, I can see a decline of approximately 25% downward from here.

Your humble opinion about this please.

[Tien]

I am a real estate flipper. Flipping 9 properties and holding onto 1.

We get such a bad name sometimes [img]/images/graemlins/frown.gif[/img].

[tommy2]

[ QUOTE ]
I noticed you have a JD; how do you think that has helped you in your current field? Is it useful/valued by real estate firms (development or otherwise)? Thanks.

[/ QUOTE ]

Here is the meat of an email I sent someone recently which addresses just that issue:

The value of the JD is more obvious in some types of jobs than others. I think it is important to decide now (or soon after you start) if you intend to be a business person with a JD or a lawyer with an MBA. Very different career tracks. I chose the former. The cost-benefit is less obvious on this track (for the lawyers, the firms actually usually say something like: "you will make $150K, but we will give you $160K with an MBA"; so it is very easy to quantify). One variable is that some business people find lawyers a bit parochial in their view of the business-world and therefore don't respect the degree as much. Another is how much "value" you place on critical thinking skills. Nothing in my life has every been as intellectually grueling as the first 6 months of law school. The intellectual horsepower you gain in those 6 months is worth (to me, at least) the utter monotony and [censored] that goes with your second two years of law school. So, like any good lawyer would tell you, the answer is "It depends". I can tell you that I have never regretted the time, expense or emotional roller coaster that is law school--but I would never want to do it over. The people and the process are, frankly, fairly miserable. But the gain will be with me forever.

[tommy2]

[ QUOTE ]
I am a real estate flipper. Flipping 9 properties and holding onto 1.

We get such a bad name sometimes [img]/images/graemlins/frown.gif[/img].

[/ QUOTE ]

I respect what you guys do, but I hate that people make it out to be a)easy and b)fool-proof.

[tommy2]

[ QUOTE ]
Tommy,

Was the increase in the price of commercial real estate as dramatic as the residential price increase? It seems like commercial real estate will more closely match rent levels, since no one really buys commercial to raise their kids in.

To everyone looking for a bottom on real estate, I think this will be much easier to figure out that a stock market bottom. Just watch the rental income to cost of owning ratio. Once you can buy and rent a property and be close to break even cash flow, then real estate has bottomed (or close) in your area. If an overreaction occurs in a hot area (CA, FL, AZ) and you can buy a place to rent for positive cash flow, jump in quickly.

[/ QUOTE ]

Yes, maybe even more dramatic. But, as I said in an earlier email, there is now a clear divergence between the quality stuff (still very pricey) and the lower end stuff (which up until recently was trading at prices way to close to the quality stuff).

Your ratio is sound, imo.

[tommy2]

[ QUOTE ]
Bottom line it. Where do we go from here insofar as percentage decline in asking prices? By May? June? July? Aug? Sept? Oct?

I am looking to buy a condo in Atlantic City. However, I feel if I wait it out until after the summer, I can see a decline of approximately 25% downward from here.

Your humble opinion about this please.

[/ QUOTE ]

I've been saying wait in every email...at least 4 months, but more like 6-8.

[nineinchal]

What % decline do you forecast? in 4 months? in 6-8 months?