Real Estate Crash thread

[XXX-er]

Canadian banks are weird. They keep offering to extend my LOC and offer me new loan products even though I never draw any of it down and have never expressed any interest in drawing any. Meanwhile clients who are trying to start a new business get the runaround on a tiny startup loan that they're willing to secure with other assets. It's plain dumb.

well thats cuz they have read about you on the internet

[powder11]

Canadian banks are weird. They keep offering to extend my LOC and offer me new loan products even though I never draw any of it down and have never expressed any interest in drawing any. Meanwhile clients who are trying to start a new business get the runaround on a tiny startup loan that they're willing to secure with other assets. It's plain dumb.

I think anytime you have at least 20% equity in your home and have a solid track record of payments while not taking the cash grabs, they figure you're a safe bet. I just figured the tap was shut off on stuff like that. Guess not.

[reganized]

Lets bring this thread back to life!

I've got to find some new diggs in the next 6 months. With the lady starting up her business, it's likely that we are going to be living in the town where she sets up shop. No income from her for a few years and maybe even covering her business expenses for a bit.

Anything we buy today is not something we plan on living in for 5+ years. Maybe 2-3 years until she's up and running.

I've been thinking about picking up a 2 family. After running all the numbers, I am coming up with an after tax/depreciation shortfall of about $2,500. I am assuming a 7% vacancy factor along with $3,000 a year in repairs/improvements. I'm charging myself market rent for my unit and assuming I rent out the other unit. Place is in good shape and not a money pit. While I am losing $2,500 a year, I am paying down $6,700 of principal so some might say I am gaining $4,200 annually.

Under that scenario, I've only tied up about $22,000 in DP. I can put 20% down and get about a 5% return on my money instead. Not sure I see a good reason to put 20% down knowing that I might need to fund the Mrs. business in the next couple years.

Short term, I see this option to end up about the same as renting with risk involved. However, picking up the two family at a sub 4.5% fixed rate for 30 years might be a good long term deal.

What's the collective think? maybe I should pack up and move somewhere where multifamily's cash flow. Or I could buy in Lawrence or Brockton, pack heat and a vest, and micro manage my way to cash flow.

[Hugh Conway]

I see another maggot wannabe slumblord junior financial analyst. The where and what matter much more than your little beat off Excel numbers

[cramer]

well i'm glad i didnt listen to benny's doom and gloom. gots to love the bay area. My house shot up 7K in value last month and 11K in value this month thanks to them expanding my neighborhood and houses selling left and right. realistically, ive probably gained a good 5-10K in equity in 2 months that it took me 3 years to get, lol. either way, I am loving the rebound out here in the east bay. Keep building!

[Benny Profane]

http://www.propublica.org/article/th...place-t/single

[mcsquared]

For fucks sake, is cramer still reporting his monthly Zillow Zestimate. My home went up $3256 last month!!! Seriously. Stop. Keep building and your value will surely go up. That's how it works. More homes in soul sucking suburbia means we all get rich!!

Now I sound like Hugh Conway. Carry on.

[reganized]

I see another maggot wannabe slumblord junior financial analyst. The where and what matter much more than your little beat off Excel numbers

"Where" is in a top town with very good schools. Very close to

City. New heat, elec, windows, kitchens etc.... Downside is busy street and small yard



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[liv2ski]

OP, analyze the property as if both units were rented out. How much is need for down payment to cover the PITI and repairs which are likely a few thousand a year on average with the rental income. If it works with only 20% down, that is good IMO. Also, look at comps in the area. Most rental type properties in San Diego should sell for 12-14 times annual rents. You need to get a feel for your area to see if what your looking at makes sense and is a good investment.

[liv2ski]

Benny, jesus. What did your link have to do with the OP question. I clicked the link, scanned it for a few minutes and decided I didn't want to hear Ms Ramos life story.

In context of this thread, the Case Schiller Composite Indexes are still declining. http://www.standardandpoors.com/indi...idff--p-us----
While I can find articles that do support a modest increase in values in some areas (Cramer and Iceman) over all, the trend is still down and there are still serious fundamental issues (weak economy, decreasing real wages, shadow inventory, etc) that lead me to be in no hurry to buy RE at this point.
I hope anyone buying today with a 10+ year ownership of the property will be ok. But sadly, non of us have a crystal ball or they would be fucking rich.

[Benny Profane]

Benny, jesus. What did your link have to do with the OP question. I clicked the link, scanned it for a few minutes and decided I didn't want to hear Ms Ramos life story.

In context of this thread, the Case Schiller Composite Indexes are still declining. http://www.standardandpoors.com/indi...idff--p-us----
While I can find articles that do support a modest increase in values in some areas (Cramer and Iceman) over all, the trend is still down and there are still serious fundamental issues (weak economy, decreasing real wages, shadow inventory, etc) that lead me to be in no hurry to buy RE at this point.
I hope anyone buying today with a 10+ year ownership of the property will be ok. But sadly, non of us have a crystal ball or they would be fucking rich.

The link has nothing to do with the question. I thought it was a great piece about the whole foreclosure mess that didn't even exist when this thread was started. There's a ton of info there, zooming back and forth from this woman's situation to the macro view.

Besides, this is my goddamn thread, so I can post anything I damn well please. So there.

[powder11]

I think the name of this thread should be changed to "chicken little".

[Benny Profane]

I was thinking of something more like I told you so.

[powder11]

I was thinking of something more like I told you so.

that was almost 4 yrs ago. what else you got?

[Benny Profane]

Rent. And call your mother.

[cramer]

For fucks sake, is cramer still reporting his monthly Zillow Zestimate. My home went up $3256 last month!!! Seriously. Stop. Keep building and your value will surely go up. That's how it works. More homes in soul sucking suburbia means we all get rich!!

Now I sound like Hugh Conway. Carry on.

I think you missed the point. i was pointing out that i did in fact buy at the bottom of the barrell in my area to benny when he pretty much called bullshit on me and it was a terrible decision to buy. My housing value means jack shit to me right now. Telling benny he was wrong is much more important, hehe. The value of my house will mean something 20 years from now when i retire. Either way, carry on.

[Hugh Conway]

So are things going to get better now? I say this because I've heard random no account bluecollar assbags talking about strategic defaults in bars multiple times in the past couple months. Is this the hairdresser moment? Or is shit just that fucked?

[Danno]

I was thinking of something more like I told you so.

location location location. My property never crashed, and I did very well buying it when I did, 3 years before the crash.

[Toadman]

So are things going to get better now? I say this because I've heard random no account bluecollar assbags talking about strategic defaults in bars multiple times in the past couple months. Is this the hairdresser moment? Or is shit just that fucked?

RE is local, remember. There are plenty of anecdotes out there, that the excrement is still hitting the fan. In fact, my cousin who lives in NorCal, and renting a house with two other people, just got a foreclosure notice. Turns out the dirtbag who bought the house, along with two others, never paid on the mortgage, and has just been pocketing the rent money. It also turns out, that my cousin now does not have to pay rent to anyone, since there appears to be some law about foreclsoures, and dirtbag deadbeat landlords. So, short term win for my cousin, who's going to save on rent for a few months until things get sorted out.

[cramer]

So are things going to get better now? I say this because I've heard random no account bluecollar assbags talking about strategic defaults in bars multiple times in the past couple months. Is this the hairdresser moment? Or is shit just that fucked?

i think it just depends on where you are talking about. As an example, i bought end of 2008 and my in law bought a few months later. my house has relatively stayed pretty steady in price if you go by what the tax guy says my house is worth. My in law, 30 miles away in a different part of the bay, has a couple year newer house and his dropped 50K in value since he bought it. The difference between the 2 is he bought in an area that they arent going to build anymore and well, its in vallejo, which is a fucking dump. He had his reasons for buying over there (family there, grew up there, etc) and he had a bunch of houses foreclose around him and they were selling for 50K less. me on the other hand, when i bought, there was literally 50+ unfinished houses that the builder walked on. So the bank came in and finished them and sold them all for around the price i bought. Once those were snatched up in 08-09, they startd building houses again. new houses go for money and thus, prices stablized here.

as for stategic defaults, ya they are going on and have been going on. I don't think they are a huge percentage of the foreclosure market. Pretty much everyone i know foreclosed on their house her in the bay area. 1 out of the 20 that did, did it strategically. And thats just my opinion they did, i dont know for sure. But they are both RN's, so they banking at least 200K a year id imagine and they walked on an 800K loan. They could have afforded it but their house lost half its value. I would have probably walked too. they'll never recover that value in their lifetime. I guess there is a pride factor there, but you also have to factor in that you made a terrible decision. Cut your losses and start over again.

[concretejungle]

People voluntarily live in Vallejo?

[cramer]

People voluntarily live in Vallejo?

lol, exactly. I tried to talk him out of it through his whole house hunting process. Shitty weather...shitty food...shitty neighborhoods...shitty people...no cops...city just went bankrupt when he bought...he's even got friggin HOA and ell they do is mow his front lawn and trim the stupid bushes.

[liv2ski]

Here is a informative article with lots of pretty charts suggesting all is not well yet in Real Estate. http://www.doctorhousingbubble.com/c...+Love+SoCal%29

"The US housing market is one of the most heavily subsidized and controlled sectors of our economy. Where Fannie Mae and Freddie Mac had an implicit guarantee for decades, until we took them over, the FHA insured loan segment of the market is fully backed by the government and consequently, the public. Increasingly high default rates with FHA loans is now problematic since this is one of the key financing tools used to keep the market afloat since the bubble popped. It is good to take an elevated view of the housing market across the country and also look at the California market to get a sense of where things stand today. Is the market fully recovering? Are we near a bottom? Have lower rates really spurred home sales? We’ll try to examine all these questions".

[powder11]

It's all perspective. Right now is an awesome time to buy a house. Low interest rates and low prices. Anyone arguing against that is a fucking moron. Yeah, there's a shit load of foreclosures collecting dust right not, but as soon as the job sector recovers and there's some more consumer confidence, sales volume will increase, prices will follow and asshats like Benny will have missed the best opportunity in his life to own a home. The pendulum always swings the other way. Just a matter of time.

[Hugh Conway]

It's all perspective. Right now is an awesome time to buy a house. Low interest rates and low prices. Anyone arguing against that is a fucking moron. Yeah, there's a shit load of foreclosures collecting dust right not, but as soon as the job sector recovers and there's some more consumer confidence, sales volume will increase, prices will follow and asshats like Benny will have missed the best opportunity in his life to own a home. The pendulum always swings the other way. Just a matter of time.

being the anti-Benny is just as fucking dumb powder11, but you know that.

shits still really fucking expensive in any decent place to live despite lots of foreclosures so I must be fucking retarded to not see this as the best opportunity in Benny's life.