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Author: [Investments] Topic: Guys, give me some guesses on the housing market
baronman
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#51
Posted: 11/23/2011 9:37:21 PM
detox,first off watch the fbombs especially if you get in real estate. they have ethics here,belevie me you fbomb any agents or clients,they will run your behind out of there.ktrain im real estate in oc. theres alot great deals example 2bed 1,5 bath in hb good neighborhood bank owned 6 miles from the beach $220,000. 10% down. 30year 4.0%,15 year 3.25%.
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#52
Posted: 11/24/2011 10:18:32 PM
QUOTE Originally Posted by Ktrain:

I noticed a few cash only houses the last year or two. Most were 1 or 2 bedroom run down houses that really weren't in great areas. Not necessarily crime ridden areas but they were off of fairly busy roads or the neighboring homes were rentals as well and weren't kept up.

For the purpose of renting though they seemed like a great opportunity for anyone that had the cash lying around. Unfortunately I didn't. We even did the math on them after property taxes and dropping $10k-$20k in repairs on them. It looked like it would produce a steady stream of income for years to come. 

This is why I don't agree with be easy's opinion that housing will go to zero. People will need a place to live. Just because a family forcloses on a home doesn't necessarily mean they are homeless. I understand the theory that if there are more homes than people that hypothetically housing should become very cheap. I also understand that families can live in homes long after they go through a foreclosure. I just think that these people will turn to renting.

I also believe that with all the baby boomers becoming older and having their children moving out they will look to scale back in the size of their homes. No need for a 4 or even 5 bedroom house with no children there anymore. 

I think if you could find a reliable person to manage the property, buying and renting would be a good way to go for all those cash only properties around the country. 

There are plenty of cash only houses. A house has to be in pretty good condition to pass for a FHA loan. I'd say most people are trying to put down 3.5% and get the FHA.

I might have mentioned this before but i was talking to a real estate broker in Charlotte and he put me on a 'distressed property' list.

I'm looking at it right now. You could go on Trulia.com and look around.

3 BR, 433 Oakdale, Charlotte NC asking 35,000. There's honestly 10 of them between 20k and 40k.

The final goal is to hold and cash flow ... but, i'd like to be able to hold a good amount of them ... so i need more cash.

I also got my RE license in the middle of this. That was easier than expected. Can't hurt to have.

I'm still basically trying to pull off the same plan, it's been months now. That's why i got my RE license ...

KTrain, have you read 'Rich Dad Poor Dad'? The best imo. Nice and simple.

Hope everything is going well with school.  

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#53
Posted: 11/24/2011 10:19:46 PM
QUOTE

Originally Posted by baronman:

detox,first off watch the fbombs especially if you get in real estate. they have ethics here,belevie me you fbomb any agents or clients,they will run your behind out of there.ktrain im real estate in oc. theres alot great deals example 2bed 1,5 bath in hb good neighborhood bank owned 6 miles from the beach $220,000. 10% down. 30year 4.0%,15 year 3.25%.

I try to leave 'I_Need_A_Detox' at the door.

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#54
Posted: 11/24/2011 10:33:51 PM
QUOTE Originally Posted by I_Need_A_Detox:

There are plenty of cash only houses. A house has to be in pretty good condition to pass for a FHA loan. I'd say most people are trying to put down 3.5% and get the FHA.

I might have mentioned this before but i was talking to a real estate broker in Charlotte and he put me on a 'distressed property' list.

I'm looking at it right now. You could go on Trulia.com and look around.

3 BR, 433 Oakdale, Charlotte NC asking 35,000. There's honestly 10 of them between 20k and 40k.

The final goal is to hold and cash flow ... but, i'd like to be able to hold a good amount of them ... so i need more cash.

I also got my RE license in the middle of this. That was easier than expected. Can't hurt to have.

I'm still basically trying to pull off the same plan, it's been months now. That's why i got my RE license ...

KTrain, have you read 'Rich Dad Poor Dad'? The best imo. Nice and simple.

Hope everything is going well with school.  


I've had the book for a few years and have read it a couple of times. Kiyosaki is brilliant guy. 

I would love to buy his game but can't fathom spending that much on a board game. 

I've read some of Dolph DeRoo(sp?) as well. Guy is pretty smart except when it comes to borrowing everything to finance homes. He may have been wiped out in the market crash. He believes in financing everything and seems to have no problem over leveraging himself. 
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#55
Posted: 11/24/2011 10:36:43 PM
QUOTE Originally Posted by baronman:

detox,first off watch the fbombs especially if you get in real estate. they have ethics here,belevie me you fbomb any agents or clients,they will run your behind out of there.ktrain im real estate in oc. theres alot great deals example 2bed 1,5 bath in hb good neighborhood bank owned 6 miles from the beach $220,000. 10% down. 30year 4.0%,15 year 3.25%.

I wish I was in a position to buy. That sounds like a good deal if it holds up to inspection. Can I get an address on it so I can drive by it? I live in Irvine so it's not far at all. 

I'm planning on either interning or going back to work next semester when my schedule improves. Hopefully that will put me into a position to become more active in the market. 

Thanks for the heads up though. 
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#56
Posted: 11/25/2011 12:52:10 AM
QUOTE Originally Posted by Ktrain:


I wish I was in a position to buy. That sounds like a good deal if it holds up to inspection. Can I get an address on it so I can drive by it? I live in Irvine so it's not far at all. 

I'm planning on either interning or going back to work next semester when my schedule improves. Hopefully that will put me into a position to become more active in the market. 

Thanks for the heads up though. 

You might be surprised what you qualify for. For the lowest income, the best move would be a 3 family FHA owner occupied. The bank will use 75% of the estimated rent. So if you bought a place that is getting $1,400 a month in the other two floors they will add $2,100 a month to what you can afford.

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#57
Posted: 11/26/2011 6:51:14 AM
 


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#58
Posted: 11/26/2011 10:20:23 AM

Alias.

State an opinion coveringspreads.

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#59
Posted: 11/26/2011 1:52:11 PM
QUOTE Originally Posted by I_Need_A_Detox:

Alias.

State an opinion coveringspreads.

Alias? Why would i be an alias? I have no problems with you at all? I don't even know anything about you? Sir i apologize i didn't give an opinion. I was reading your thread and decided to check and see if that emoticon would work and it did. It was not directed at you and i had no intentions of insulting you at all. Sorry about that.
I would say 10 years is about right sir.
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#60
Posted: 11/26/2011 2:13:18 PM
QUOTE

Originally Posted by CoveringSpreads:

Alias? Why would i be an alias? I have no problems with you at all? I don't even know anything about you? Sir i apologize i didn't give an opinion. I was reading your thread and decided to check and see if that emoticon would work and it did. It was not directed at you and i had no intentions of insulting you at all. Sorry about that.
I would say 10 years is about right sir.

That's a good emoticon.

IMO ... buy until 2013 ... hold, cash flow ... sell in 2021.

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#61
Posted: 11/28/2011 4:09:54 PM

With the banking issues of 08 it has become a renters wet dream. People cannot get financed with the stricter banking guidelines meaning there are more valuable renters out there. 

If you have the cash ...real estate is a 10%+ yearly return in the current markets I am in with 50-100% long term return.

With interest rates low its a great time to borrow and add investment properties to anyones portfolio.

Florida is a great place to invest right now... market is saturated with foreclosures and properties are selling for half of what they were 4 or 5 year ago.  You can either rent full time or rent just during the tourist times to gather the income for taxes and upkeep.

Real estate is one of the safest and best long term investments... is only so much land and as the population continues to grow the demand will continue to grow.

 

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#62
Posted: 11/28/2011 10:50:53 PM
It might be a good play to pick up a few rental homes in towns where major army bases are located. IF, you think that our troops are going to be brought home in the near future. Buy now and sell in 2 years, housing should appreciate in that area with soldiers having more tax free income and you won't have to pay capital gains. It's just a thought.

Right now I live in a college town in Georgia and if you know what you're doing (which it sounds like you do) college towns can also be a great place to have low investment rental homes. As long as the property is close to campus and not a total dump you're pretty much set. Parents pay the majority of students rent which typically means it's never late. The only downfall to this is that you will have a higher turnover rate with people graduating and such. My landlord which is also a friend of mine bought the house I live in for $98,000. It's a 4 bedroom 2 bath house. He has had the house full since he purchased it in summer 2009. I pay $300 rent/month + utilities which is much less than anywhere else close to campus. You can do the math yourself, at $900 (3 rooms x $300) a month in rent plus he is able to live somewhere free it's a great deal. Hire a management company if you don't feel like messing with it.

My friends house was just taken by the bank if anyone is interested in a 4 bedroom house with grandmothers sweet a block from campus. If I could afford it I would buy it. If anyone wants more info on that let me know. It's just one of those situations where you think to yourself, damn, I wish I had the cash to buy that because people will always live there as long as it's still standing. That was alot, sorry, the adderall got my brain flowing.
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#63
Posted: 11/29/2011 12:19:08 AM
QUOTE Originally Posted by robertelee:

It might be a good play to pick up a few rental homes in towns where major army bases are located. IF, you think that our troops are going to be brought home in the near future. Buy now and sell in 2 years, housing should appreciate in that area with soldiers having more tax free income and you won't have to pay capital gains. It's just a thought.

Right now I live in a college town in Georgia and if you know what you're doing (which it sounds like you do) college towns can also be a great place to have low investment rental homes. As long as the property is close to campus and not a total dump you're pretty much set. Parents pay the majority of students rent which typically means it's never late. The only downfall to this is that you will have a higher turnover rate with people graduating and such. My landlord which is also a friend of mine bought the house I live in for $98,000. It's a 4 bedroom 2 bath house. He has had the house full since he purchased it in summer 2009. I pay $300 rent/month + utilities which is much less than anywhere else close to campus. You can do the math yourself, at $900 (3 rooms x $300) a month in rent plus he is able to live somewhere free it's a great deal. Hire a management company if you don't feel like messing with it.

My friends house was just taken by the bank if anyone is interested in a 4 bedroom house with grandmothers sweet a block from campus. If I could afford it I would buy it. If anyone wants more info on that let me know. It's just one of those situations where you think to yourself, damn, I wish I had the cash to buy that because people will always live there as long as it's still standing. That was alot, sorry, the adderall got my brain flowing.

Excellent points General.

When I got back from Afghanistan almost 6 years ago a lot of people in my squadron(including me) were given housing allowance(something almost all military members desire as oppose to living on base). Something like 75 new people were now looking to rent places around town. And with such a short turn around upon coming back to find a place, most of us weren't to picky on price or house condition. Luckily a two buddies of mine found a good place for us. We paid $900 for a 3 bed 2 bath in Oak Harbor WA. It's about the going rate for the area. Military areas are great for that sort of thing. Plus if they destroy the house you can call there chain of command and they will cause all sorts of hell for them. 
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#64
Posted: 11/29/2011 1:20:22 AM
great comments guys.
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#65
Posted: 12/1/2011 10:06:56 PM

If anyone interest in invest, invest in single family home, stay away from Condo especially condo conversion.

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#66
Posted: 12/3/2011 11:50:11 AM
QUOTE Originally Posted by PSP101:

If anyone interest in invest, invest in single family home, stay away from Condo especially condo conversion.

I have invested in and sold 2 houses. It worked out great. They were both multi families. Just my experience.

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#67
Posted: 12/7/2011 12:10:59 AM

The hearing was tonight at 7.

They passed it.

I can legally turn my 2 into a 3 family.

Now i need to either make it into 3 condos and sell them seperate or just sell it as a finished 2 family with the rights to make it into a 3 and not put another penny into it.  

I need to talk to some brokers and some smart guys.  

Heading in the right direction.

 

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#68
Posted: 12/7/2011 12:34:43 PM
QUOTE Originally Posted by I_Need_A_Detox:

The hearing was tonight at 7.

They passed it.

I can legally turn my 2 into a 3 family.

Now i need to either make it into 3 condos and sell them seperate or just sell it as a finished 2 family with the rights to make it into a 3 and not put another penny into it.  

I need to talk to some brokers and some smart guys.  

Heading in the right direction.

 


Congrats on the good news Detox. 

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#69
Posted: 12/7/2011 12:58:15 PM
QUOTE Originally Posted by Ktrain:


Congrats on the good news Detox. 

Thanks man.  

I know it was a step in the right direction but now i have so many options.

1. Make 3 condos and sell them individually.

2. Don't put another penny into it. Sell it as is ... A finished 2 family with the rights to make it into a 3 family.

3. Sell it as a finished 3 family. To turn it into a 3 family i need to add a sprinkler system. That's 10k min. So it would probably cost 30-40k to do it over.

4. I'm sure there is another angle.

Do you guys know what kind of person i should talk to about this?

A Real Estate broker? A financial planner? ......... ?

This is new to me.

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#70
Posted: 12/7/2011 1:00:50 PM
QUOTE Originally Posted by Ktrain:


I've had the book for a few years and have read it a couple of times. Kiyosaki is brilliant guy. 

I would love to buy his game but can't fathom spending that much on a board game. 

I've read some of Dolph DeRoo(sp?) as well. Guy is pretty smart except when it comes to borrowing everything to finance homes. He may have been wiped out in the market crash. He believes in financing everything and seems to have no problem over leveraging himself. 

Maybe he knows that he will cash flow. If you're in a cash flow position ... you can just hold your property when the market goes way down.

He could have been wiped out though.

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#71
Posted: 12/8/2011 1:01:08 PM
I need wallstreet, KOAJ, etc to say something about post #69.
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#72
Posted: 12/8/2011 1:03:01 PM

Who do you talk to about this stuff?

Man, i'd pay the right person 500 a hour just to get pointedin the right direction.

The right direction is the key.

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#73
Posted: 12/8/2011 1:46:54 PM

Slow down you seem like you are getting pretty worked up over this. Don't bring emotion into the equation.

It's a simple risk/investment vs. reward. It all comes down to numbers. Also time invested if it matters to you. Do you want a quick out and move on to the next project or are you willing to put in the time to extract the highest possible return and would it be worth it to do so. Is the additional time invested going to pay off significantly enough or would you see a larger profit selling as is and move on to another project?

Time is an undervalued commodity in real estate investing. Where is your time better served 1 2 3 or 4? Invest your time in the condo project or take the quick out, time saved and profit to invest in a future project. Only you can decide this one.

1. Make 3 condos and sell them individually.- Whats the projected ROI to complete this project. What will each unit sell for. Do the math...

2. Don't put another penny into it. Sell it as is ... A finished 2 family with the rights to make it into a 3 family. See above, with the added option to convert for a future buyer should add some value. Network with investors, investors often sell projects to other more experienced investors either because they bit off more than they can chew or their time is better spent elsewhere.

3. Sell it as a finished 3 family. To turn it into a 3 family i need to add a sprinkler system. That's 10k min. So it would probably cost 30-40k to do it over. - Again Risk vs. Reward these are questions only you can answer

4. I'm sure there is another angle.- Keep it as a rental. Leverage the property to take on another project, rinse repeat and build a substantial portfolio over time.

It is all a numbers game, keep emotion out of it. Risk vs. Reward. Remember your time is a valuable investment as well it should be treated as such.

Good luck to you sir



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#74
Posted: 12/8/2011 5:21:02 PM
QUOTE Originally Posted by Nut_Flopper:

Slow down you seem like you are getting pretty worked up over this. Don't bring emotion into the equation.

It's a simple risk/investment vs. reward. It all comes down to numbers. Also time invested if it matters to you. Do you want a quick out and move on to the next project or are you willing to put in the time to extract the highest possible return and would it be worth it to do so. Is the additional time invested going to pay off significantly enough or would you see a larger profit selling as is and move on to another project?

Time is an undervalued commodity in real estate investing. Where is your time better served 1 2 3 or 4? Invest your time in the condo project or take the quick out, time saved and profit to invest in a future project. Only you can decide this one.

1. Make 3 condos and sell them individually.- Whats the projected ROI to complete this project. What will each unit sell for. Do the math...

2. Don't put another penny into it. Sell it as is ... A finished 2 family with the rights to make it into a 3 family. See above, with the added option to convert for a future buyer should add some value. Network with investors, investors often sell projects to other more experienced investors either because they bit off more than they can chew or their time is better spent elsewhere.

3. Sell it as a finished 3 family. To turn it into a 3 family i need to add a sprinkler system. That's 10k min. So it would probably cost 30-40k to do it over. - Again Risk vs. Reward these are questions only you can answer

4. I'm sure there is another angle.- Keep it as a rental. Leverage the property to take on another project, rinse repeat and build a substantial portfolio over time.

It is all a numbers game, keep emotion out of it. Risk vs. Reward. Remember your time is a valuable investment as well it should be treated as such.

Good luck to you sir



Thank you sir. Perfect!

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#75
Posted: 12/13/2011 7:32:33 AM
Detox : the housing market is no where near bottom yet. i think we have another 30% to go but real estate is realtive to location so knowing your area is the key. a good way to look for value is knowing the area and look at the tax records look for the selling price before the bubble happend, pre 2003 selling prices. bubbles always retrace to their beginning. 

housing prices will not rebound for years and have not bottomed because of shadow inventory plus millions more underwater and not paying their mortgage anyways. many have the illusion that 2008 was the bottom but look at all the programs to prop up housing, huge tax credit, artificial low interest rates, those programs to help behind or underwater home owners, etc... the housing market will continue lower the government and banks are trying to suppress the inventory so they dont depress the market any further. thats why you have people living rent free for years. the banks figure atleast theirs someone there guarding the house and keeping the pipes from freezing etc.. 

buying and renting for cash flow is always good but again you have to buy at the right price. look at demographics also we have a huge # of baby boomers retiring soo maybe florida if it has bottomed like some have said could have some cheap smaller homes that could have very good value. 
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