Posted by Corine on February 13, 2008 at 10:07:23:
Moved here when I was 7 years old. Didn’t have much choice in the matter. And no, I would not move back to Canada. I am American to the bone. It’s what I know having grown up here my entire life.
Does anyone think America will pull out of this - Posted by Corine
Posted by Corine on February 12, 2008 at 14:28:07:
Or are we on the downward slide like other empires. I’m in Myrtle Beach SC, a resort town. Am holding on to what I purchased in 05, well rented, and canâ??t complain there. If I wasn’t straddled with these houses, I’d consider moving to make my living elsewhere, but where. I’m in RE sales.
Although, there are a few agents in my market that are tearing it up, so if they can do it, I can do it.
WE WILL THRIVE by doing ONE THING… - Posted by Kenneth Hocking
Posted by Kenneth Hocking on February 13, 2008 at 05:09:03:
Corine:
It is a simple as BUY CASHFLOWS or do not buy.
I see posts on here from JIMMY, David Butler, RICH CA
Rick the Probate Guy, Kristine and many many
other… that when you boil down to the ROOT of
success it has been and always will be Positively
cashflowing properties. some just call it buying at a
steep discount… but it is getting the property that
will make a profit based on rents as your Safety net
incase the banks stop lending money to investors and
Non-qualifying homebuyers which is what has currently
occured
When dealing with N.O.O. properties that are meant
to be rentals forever then 2 things drive the market
prices RENTS and Availability of Loan funds for new
buyers.
I am glad that your properties are cashflowing on the
condos you bought.
You named yourself that you thought you were a
Player and I think that is exactly what happened in
many markets that people began to PLAY the market as
if it were a Game… No thought to the Economics of
sustainability of pricing versus cashflow
because “even if you take a Neg AM loan with 10% yr
to yr appreciation you can “Always” sell for a
profit or refi and get your payments back”… This
became the mentality.
But Now we have Lenders that are requireing and
INVESTMENT in investment property… right now
thankfully stated income verified asset loans are
coming back but they are at 75% ltv that is the
Investment you have to put down 25% to get good
rates on stated income loans…novel idea to make us
INVEST in real estate.
And there are lots of folks with MONEY that are doing
exactly that investing into cashflows…
If you do move look for markets where you can get at
least 1% of the purcahse price in local market rents
Like most of Mid west where if you buy at 150,000
house you shuld be able to get 1500 a month rent
easily… Houston for example has fantastic Economics
Right now and you can without much effort buy 80-90k
houses that pull 1000-1100 rents… and if you went
to work to find deals then the spread is much
better…
Re: Does anyone think America… - Posted by brandoncbsre
Posted by brandoncbsre on February 12, 2008 at 18:50:35:
I am young, so this is my first downswing in the RE market. But I do believe that as long as China and the others out that are buying our treasury bonds and financing the governments spending, the U.S. should pull through.
I have to wonder though what would happen if the Chinese government decides that US paper is starting to look like a weak investment? I mean there is a point where any portfolio would have enough US treasury bonds in it, right?
Will our government be able “to cut up the credit cards” and pay cash or dont spend?
Time will tell…Maybe I’m off base with these thoughts. Like I said I’m young and dont exactly have this world figured out quite yet.
Re: Does anyone think America will pull out - Posted by phil fernandez
Posted by phil fernandez on February 12, 2008 at 17:16:04:
Corine,
The United States Of America is the greatest country ever known to civilization. She is industrious, she is creative and she is strong. She is not afraid. She will not back down from threats.
So with all that going for her, you have no worries.
Of Course - Posted by Steve
Posted by Steve on February 12, 2008 at 16:56:05:
Corine-
You must be young. The economy goes in cycles. There are many areas of the economy that are booming. The housing market is only a small part of the over all. Buy now and hold on to what you have. Real estate unlike the stock market for example moves slowly. Be patient and jump in, these are great times for investing.
Bubbles aren’t bad - Posted by Gene
Posted by Gene on February 12, 2008 at 14:59:20:
A few weeks ago I read an article on Market watch:
“A mind-blowing machine: In America, land of the bubbles, the next pop will be the biggest” (A mind-blowing machine - MarketWatch)
The argument is that bubbles are growing in intensity and frequency. And he believes this leaves the future of the US grim.
Here are some quotes from the article…
“Well, stop laughing: The new, new came true, says Janszen. Seriously, the economy and the stock market can no longer function without an ever increasing series of bubbles, one after another, rapidly expanding then bursting, with all the manic trading, risk, uncertainty, hypervolatility and distortions that come with it.”
“Janszen traces bubbles through history: From the 1720’s South Sea Bubble to the housing-subprime bubble. Bubbles are accelerating, becoming more frequent, a frenzy feeding on itself: “Nowadays we barely pause between such bouts of insanity. The dot-com crash of the early 2000s should have been followed by decades of soul-searching; instead, even before the old bubble fully deflated, a new mania began to take place.””
I personally do not totally agree with this. I think bubbles are the business cycle…on steroids.
I also think overall bubbles aren’t as bad for our economy and country as many think. In these periods of overheated markets…there is massive investment in infrastructure.
In the roaring 20’s there was massive investment in industrial infrastructure. This was left in place after the bust and helped lead America to be the industrial superpower that we are.
In the 80s there was massive investment in commercial real estate. After the bust…the buildings were left behind. A great asset for building tech based businesses.
In the late 90 the dot.com bubble led to massive investment in fiber optics and networks. Now we are utilizing this excess at a low cost (as the original investors took the financial hit).
After bubbles pop the original (overly exuberant) investors take the hit. The infrastructure they created remains and resold at a lower cost. Eventually a better business will utilize it and our market/country better off than before. On top of that it seems to me that at time the largest original investors are foreigners (Japan in the 80s and China during the housing boom).
Looking at the housing bubble…it looks like a ton of new homes have been added by this boom. Prices will likely drop down to historical levels and affordability will return and possibly be better than before (because of added supply). Sure “investors” that were on the wrong side of the trend during the bust are paying dearly now…but they took a risk. Eventually the players that made the biggest mistakes will be removed from the game and better players will take their place (this can be in terms of home buyers, or builders, or even lenders).
To me the only real risk of bubbles is if the govt tries to “socialize the losses”.
If the markets are allowed to worked freely…I think bubbles aren’t really all that bad.
Just my thoughts.
Gene
Re: WE WILL THRIVE by doing ONE THING… - Posted by LeonNC
Posted by LeonNC on February 13, 2008 at 22:13:29:
I was looking through the local foreclosures last night online. It seems that a lot of the people who became landlords over the last five years are going up in flames.
I knew people were overpaying for properties here for a long time. It became evident last night as I looked at these guys losing three to four houses at a time. I hate to see it happen to people but they are the same people who were offering more than I could and making life difficult.
So the banks want you to put 25% down even if you can buy the property at 50% ltv? I’ve never been real excited about renting out property (although I do) but I bet you could pick up some land home packages right now for CHEAP! Super cashflowers. $300 to $400 a month cashflow with $30k invested is a lot more exciting than $150 a month with say $60k.
Re: Does anyone think America… - Posted by Rich-CA
Posted by Rich-CA on February 12, 2008 at 22:50:59:
My grandparents lived through the Great Depression. Went from 3.6% unemployment to 33% unemployment in a couple of years. Stock market crash, bank failures (and loss of all deposits as there was no FDIC). The one added problem was the dust bowl where 5 years of drought wiped out farm products as well.
Re: Does anyone think America… - Posted by Rich-CA
Posted by Rich-CA on February 12, 2008 at 22:48:53:
China’s economy depends on continued US purchases, so if we tighten up, so do they. Things have to get bad enough they would be willing to trash their economy in order to change things. They own a lot of CDO and credit card debt as well.
Re: Does anyone think America… - Posted by Gene
Posted by Gene on February 12, 2008 at 19:19:25:
You seem like someone that like to think, you would probably enjoy and get a lot out of the book: “The Only Three Questions That Count: Investing by Knowing What Others Don’t”
by Kenneth L. Fisher
I highly recommend it.
Re: Does anyone think America will pull out - Posted by Corine
Posted by Corine on February 13, 2008 at 03:44:53:
That gave me goosebumps. I do love America. I am also a naturalized American from Canada. Thank you for allowing me to remember how lucky I am to live here, except for the Medical stystem sucks.
Re: Bubbles aren’t bad - Posted by Rich-CA
Posted by Rich-CA on February 12, 2008 at 22:53:17:
I would argue that “bubbles” are just a new name for aspects that have always been part of business cycles. The part where the crest is reached.
Re: Bubbles aren’t bad - Posted by Corine
Posted by Corine on February 12, 2008 at 16:23:02:
WOW!!! That’s a mouth full. I feel I was a player that made moderate mistakes. I’m holding steady on rental houses that may not appreciate for many years. The only good thing about them is the debt pay down and one day rents will hopefully raise enough to kick off good cash flow, but that’s a time away.
Thanks in advance for not chiming in to those who “lucked” out in 2005 by selling at that time and are now chocking it up to expertise. I love those posters. I know, there are many of you very wise here, but not all.
Being in a resort market, in sales, calling expired listings, I hear horror stories. Spoke with a man yesterday whom is selling an ocean front condo for what he purchased for two years ago pre-construction. It’s a seasonal rental and when the management co finishes with him he nets 10K per year. His holding costs are 2,600 per month. 620.00 hoa fees per month.
He has four like this, and the builder is undercutting everyone with another 18 to sell.
I guess I was conservative in many respects.
I have many more stories like this.
The Medical stystem sucks huh! - Posted by Wayne-NC
Posted by Wayne-NC on February 13, 2008 at 04:59:19:
Yea but the tax rates are lower so you don’t have to pay for medical care whether you use it or not. Other than that Canada is just like America, except without guns! I wonder why you moved here? We have a war on as everyone knows. I remember a time when Americans moved to Canada during a war. Secondly, if it is to escape higher taxes, see point above. Anyway, I am sure that you have valid reasons for doing so and with that, welcome. Enjoy your REI career. We love to have the producers in society in our population.