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Author: [Investments] Topic: Guys, give me some guesses on the housing market
I_Need_A_Detox
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#101
Posted: 12/31/2011 3:35:12 PM
QUOTE Originally Posted by sparty444:

Be easy,

Your logic is sound for luxury items such as gold-cars-diamonds-art-etc.  But you couldn't be more wrong on things that are needed.... food-water-shelter and weapons.

Land is a long term great investment.... and renting is a great short term investment.  The 08 collapse drove prices down to levels that are steals. And when the lending standards tightened it created a bunch of renters who didn't exist before.  Getting a loan in today's market system is tough for people that have less than great credit... meaning more people are forced to rent instead of owning...even though its cheaper to own right now that it is to rent in most places.

As the population continues to increase the demand for property will increase and you will see  a return to pre 08 prices or better.... it might be 10 to 25 years from now.... but it will happen.... the alternative is our economy collapses all together and nothing will matter anyway.

In my neck of the woods your able to buy small homes in decent neighborhoods for $20,000.   The going rent for said places is $500 a month.  Not sure you can find a better short term investment really.

Homes in Florida are ultra cheap right now... I am looking to pick up a few nice places that I will easily make 10-20% short term will potential of 100-200% long term

If you can find better investments than that let me know... am always looking to make more

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#102
Posted: 12/31/2011 3:36:16 PM
Gopher, Sparty is pretty good. 
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#103
Posted: 1/4/2012 11:19:26 PM

granted the housing market could drop another 10-20% but now is the time to buy. One thing I'm pretty sure of is right now you can get a 30yr fixed mortgage at 3.875%. Absolutely, ridiculous.

the key instead of trying to figure out the bottom of the real estate market is the key to the interesat rates. Everything I read is that rates should start climbing in the 3rd quater of this yr. For a 100k mortgage at 3.875% you are going to pay 69k of interest over the life of the loan. If rates jumped a full point to 4.875% the lifelong interest jumps to over 90k. 5.875% = $112k etc. I guess the moral of my theory is that we know rates are going up and while you are trying to crystal ball the housing market you are going to lose the historic lows in mortgages which could ultimately cost you more in the long run. Just my 2 cents

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#104
Posted: 1/21/2012 1:13:43 PM
I'm going to try to stay in my area and use hard money. 

Starting Monday I will start hunting down hard money lenders. 

I have 65,000 in the bank and about 60k in equity. 

Does anyone know anything about hard money? 

Can I borrow 100% and renovation money? I'm sure they have to have some kind of collateral ... will they take the 2nd spot on my mortgage? 
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#105
Posted: 1/22/2012 12:36:01 AM

It is good to know what the terms are when dealing with a hard money lender so you can find the one that will fit your needs. Here are some of the terms you can expect to see. Typically they will only loan you up to 70% ARV (after repaired value). This means that a hard money lender can loan you up to 70% of what the home is worth in repaired condition. So if you find a home worth $45,000 in the condition it's in, and needs $20,000 in repair work, and after it is repaired the current fair market value is worth $100,000, then typically they can lend you up to $70,000, which would cover the cost of the house and the repairs.

Other terms you can expect are high interest rates. Interest rates vary from 12% - 20% annually and terms can last for 6 months to a few years. Many times these rates vary depending on your credit score and experience. In most cases, there will be closing costs or fees to use hard money. Typically hard money lenders will charge anywhere from 2-10 points just to use their money. One point equals one percent of the mortgage amount. So charging 1 point on a $100,000 loan would be $1000. These are all important things to consider when choosing a hard money lender.

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#106
Posted: 1/22/2012 12:41:00 AM

Other things to consider are how quickly funds will be available. Many times, when you find investment properties, you need to move quickly. Your ability to get access to money quickly can make all the difference. It's important to begin relationships with potential hard money lenders as quickly as possible. You also need to be aware of pre-payment penalties. Pre-payment penalties can really hurt your deal and cut into your profits substantially. Try to avoid pre-payment penalties.

Many hard money lenders today will also require you to fill out a credit application that may ask you for W-2's and or tax returns, your most recent pay stubs, and bank statements. Again, it's all about protecting their assets. Yet, some like the old fashion way where they only care about the deal so they do a drive by or physically look at the property. Again it all depends on whom you deal with.

When should you use a hard money lender? Hard money is great for beginning investors who may not have money or for those who have bad credit and cannot qualify. Investors also use hard money when they need to purchase quickly. Typical soft money or conventional loans take 30 days or more. Sometimes that is to long. Using a hard money lender is also a creative way to finance a property. Most like to call it "Nothing Down". If you can borrow enough money to buy the property, fix it up and then sell it under market value for a profit, then you've just made money without any of your own money. Sure it will cost you money to borrow that money, but the rewards out way the expense.

How can you find hard money lenders? There are hundreds of hard money lenders waiting to lend you money. It could be your next door neighbor. The best way to find hard money lenders is to talk to a mortgage company and ask for referrals. You can also call a title company or a real estate agency. They deal with buyers and sellers of houses every day. Shop around until you find the best one that will fit your needs. Another way is search online for hard money lenders. Some will lend nationwide - these typically want a credit check. If you find a hard money lender in your area, they may just do a drive by.


 good article 

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#107
Posted: 1/24/2012 11:41:42 PM
QUOTE Originally Posted by GOPHERNATION12:



THERE IS TRUTH T0 THIS BUT I W0ULD BE M0RE SPECIFIC AND SAY LAND IS A BETTER INVESTMENT THAN H0USES L0NG TERM
I'll take the house every day of the week.
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#108
Posted: 1/25/2012 10:38:28 PM

detox.

try www.homepath.com these are all bank owned properties and you can put  little money down and no mortgage insurance or appraisal needed.

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#109
Posted: 1/26/2012 4:19:19 PM
QUOTE Originally Posted by Lastmushstandin:

detox.

try www.homepath.com these are all bank owned properties and you can put  little money down and no mortgage insurance or appraisal needed.


I guess they'd be good to find out where the auctions are. other than that everything that they have listed is also listed by mls. 

Has anyone been to an auction? 

I'm going to try to use hard money. I'm putting in an offer tonight actually. I guess the only way to find out if you can do it is to get the ball rolling and get a house under agreement. Another learning process. 
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#110
Posted: 1/26/2012 4:22:44 PM
2 family ... asking 139,000 

i'm offering 115,000 ... i'd take 125 or 130 

put 40 into it and sell it for 219 

that's what should happen ... now let's see what really happens 
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#111
Posted: 1/26/2012 5:09:59 PM
they are not auctions. it's like any sale they bank wants to get them off their books
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#112
Posted: 1/26/2012 6:30:13 PM
Detox you need to get your HM loan in place ahead of time. Nobody is going to accept your offer without proof you have the capacity to purchase. There are too many wannabe Carlton Sheets buyers out there. I bump buyers out all the time if their garbage is not perfectly in line, don't waste anybody's time or you will get a bad reputation in your area.

I sell REO listings in Los Angeles. I am the listing broker for multiple lenders. I also have a crap ton of investors I work with that use hard money and flipped a few myself. I also worked for Chase as a Sr. Asset manager for 12 years, basically I was the seller and have sold 1000's of REO listings over the years.

The collateral for hard money is the acquisition property, you need to get the deal at 50-60% LTV for them to give you the money and funds for construction depending on the lender.

Hard money is for quick flips, not long term purchases. Unless you can refi out which is not as easy as it used to be.

Homepath are Fannie listings, they cater to owner occupied buyers and non profits. Investors are their last priority when deciding on who buys their listings. Not saying you can't get a deal there but they don't want to sell to you unless you are going to live in the home.

Here is the faq for borrowers for one of the more legit hardmoney lenders in So Cali that I have worked with many times. Check out their site. They won't loan in your area but it will give you some insight into what HM lenders in your area will do for you.


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#113
Posted: 1/26/2012 9:57:06 PM
QUOTE Originally Posted by Nut_Flopper:

Detox you need to get your HM loan in place ahead of time. Nobody is going to accept your offer without proof you have the capacity to purchase. There are too many wannabe Carlton Sheets buyers out there. I bump buyers out all the time if their garbage is not perfectly in line, don't waste anybody's time or you will get a bad reputation in your area.

I sell REO listings in Los Angeles. I am the listing broker for multiple lenders. I also have a crap ton of investors I work with that use hard money and flipped a few myself. I also worked for Chase as a Sr. Asset manager for 12 years, basically I was the seller and have sold 1000's of REO listings over the years.

The collateral for hard money is the acquisition property, you need to get the deal at 50-60% LTV for them to give you the money and funds for construction depending on the lender.

Hard money is for quick flips, not long term purchases. Unless you can refi out which is not as easy as it used to be.

Homepath are Fannie listings, they cater to owner occupied buyers and non profits. Investors are their last priority when deciding on who buys their listings. Not saying you can't get a deal there but they don't want to sell to you unless you are going to live in the home.

Here is the faq for borrowers for one of the more legit hardmoney lenders in So Cali that I have worked with many times. Check out their site. They won't loan in your area but it will give you some insight into what HM lenders in your area will do for you.



I have proof of funds in place. That's what I was giving the guy tonight. Proof of funds, 1,000 deposit and signed the offer. 

This going to be a quick flip. He'll probably give me 4 months min and 9 months max. 

I'll use my house as collateral as well as the house i'm trying to purchase. 

The guy i'm using is legit. http://grossmanco.com/lending.html
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#114
Posted: 1/26/2012 10:19:55 PM
Thanks for the info Nut_ 
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#115
Posted: 1/30/2012 12:38:58 AM
Be easy and aprty are both right here. 

Be easy understands DEFLATION and what will happen to the housing market as whole it will go down in value. but 

Sparty is also right that their is area's where Real estate is a very good investment. 

thats why i said location is the #1 thing here. will people be moving into the area to  1) have renters  2) buy homes  basically demand. another thing is ROI of the properties sparty pointed out theirs places were u can grab a home for 20k and rent it for 500/month. if that area has a stable job market that shows signs of growth then that would be a good investment.  

I thought about detroit a few years ago with the same thing in mind renting to section 8 but detroit is in an absolute death spiral. stick to the areas YOU know well. 

detox whats the 2 family renting for each side ?? 
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#116
Posted: 1/30/2012 12:53:12 AM
QUOTE Originally Posted by papageorgio:

Be easy and aprty are both right here. 

Be easy understands DEFLATION and what will happen to the housing market as whole it will go down in value. but 

Sparty is also right that their is area's where Real estate is a very good investment. 

thats why i said location is the #1 thing here. will people be moving into the area to  1) have renters  2) buy homes  basically demand. another thing is ROI of the properties sparty pointed out theirs places were u can grab a home for 20k and rent it for 500/month. if that area has a stable job market that shows signs of growth then that would be a good investment.  

I thought about detroit a few years ago with the same thing in mind renting to section 8 but detroit is in an absolute death spiral. stick to the areas YOU know well. 

detox whats the 2 family renting for each side ?? 

it's empty now because it's a foreclosure but it would get 1000 per unit after a rehab .... 

i'm still waiting to get an answer/counter on my offer ... 



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#117
Posted: 1/30/2012 9:58:13 AM
Be easy understands DEFLATION and what will happen to the housing market as whole it will go down in value

Not just with the housing market, but in all markets that are effected by accessibility to credit

The most important factor in investing is the time value of money (interest rate), in order to compare alternative investments.  The question anyone should be asking as it regards to where the housing market is heading, is Where are Interest Rates heading,,,,?

NOt many people can fathom a housing market where interest rates are rising, because for as long as I've been alive, rates have been falling

People seem to forget ALL the money that the gov has thrown at housing so far, the plans to throw money at it in the near future (another Trillion in fed buying bonds that back the mort debt), because if they would take this into consideration, they'd be asking what happens when that ends

I know that there will be a new pool of potential buyers, from the people that are a couple years removed from their foreclosures at the beginning of this mess. Don't count on them to prop up prices.  I also know that new home construction continues to drag along the bottom, and some claim that will lead to a supply problem moving forward with our demographics. None of this matters, because the only thing that can drive prices back upwards would be rising incomes AND simultaneous access to more credit (debt).  We are a nation drowning in private debt. It is called saturation, and until it clears the books, nowhere to go but down.

happy infesting
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#118
Posted: 1/30/2012 6:19:28 PM
^^ yup couldnt agree more.

but theirs is still opportunities in certain areas even with that back drop to make good investments. 



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#119
Posted: 1/30/2012 6:25:16 PM
QUOTE Originally Posted by I_Need_A_Detox:

2 family ... asking 139,000 

i'm offering 115,000 ... i'd take 125 or 130 

put 40 into it and sell it for 219 

that's what should happen ... now let's see what really happens 

and you say after rehab it will get 1000 a side ?? Im sorry but its not worth 200k or even 150k, i would offer 80k if it needed to be rehabbed. i learned a lot about the landlord business and you want a property thats costs 100k to rent for 2k a month. theirs more than just mortgage payments, insurance and property tax that will eat into that 2k. maintance, advertising, screening costs, lawyers fees if you have to boot a mofo for not paying, all these things equal headaches. 
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#120
Posted: 1/30/2012 11:29:06 PM
QUOTE Originally Posted by papageorgio:


and you say after rehab it will get 1000 a side ?? Im sorry but its not worth 200k or even 150k, i would offer 80k if it needed to be rehabbed. i learned a lot about the landlord business and you want a property thats costs 100k to rent for 2k a month. theirs more than just mortgage payments, insurance and property tax that will eat into that 2k. maintance, advertising, screening costs, lawyers fees if you have to boot a mofo for not paying, all these things equal headaches. 



I've owned a 2 family, 3 family and now a 2 family that I live in. 

I'm going to flip this 2 family that I put the offer in on.  

How do you know what it's worth? 

"I'd offer 80k" ... that would be pointless. 




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#121
Posted: 1/30/2012 11:58:56 PM
QUOTE Originally Posted by papageorgio:


and you say after rehab it will get 1000 a side ?? Im sorry but its not worth 200k or even 150k, i would offer 80k if it needed to be rehabbed. i learned a lot about the landlord business and you want a property thats costs 100k to rent for 2k a month. theirs more than just mortgage payments, insurance and property tax that will eat into that 2k. maintance, advertising, screening costs, lawyers fees if you have to boot a mofo for not paying, all these things equal headaches. 

what a stupid friggin comment. 



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#122
Posted: 1/31/2012 5:26:03 PM
los angeles real estate is doomed... they need to build a football stadium to lure people to move there. thats their "last ditch effort"

the porn industry is quickly making an exit
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#123
Posted: 2/7/2012 9:25:16 PM
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#124
Posted: 2/15/2012 2:39:02 AM
The market has changed around here. It's hard to find good buys right now imo. 

I'm stuck. 

My guess would be that the banks are holding back foreclosures for the winter ... and they'll start leaking them out more in the spring. 

Sparty, how is it where you're looking? 

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#125
Posted: 2/15/2012 2:47:41 AM
I almost need the equity in the house i live in to add to the money that i have to flip a house right. Using hard money cuts in to the profit too much. 

Do I sell my house and rent .... That's kind of risky ... 
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