Real Estate Crash thread

**FussyDutchman** · 05-07-2014, 07:01 PM

^

This is not the as prevalent as it used to be in the mid/late 2000's since guidelines were tightened significantly and 100% (or more) financing is all but gone. I'm curious how anyone was able to purchase 4 investment properties in the current market without putting down at least 15-20% so my guess is they must have had some skin in the properties. Based on the location, I'm sure they were condo/townhouses and more than likely bought on the cheap so the $ out of pocket could have been minimal and easily made worth it by the weekly/monthly (even if seasonal) rental income. FL has changed their foreclosure rules significantly since the crisis but the immense numbers of properties awaiting fc has backed up the courts at least 9-12 months last data I saw. Not a quick timeline by any means but compared to foreclosing on a property in NY or MA it is fast, you are looking at 16 to 24 mos. for those states and in NJ, a minimum of 24 mos.

**liv2ski** · 05-08-2014, 07:05 AM

^^^^When will states figure out Judicial foreclosure is slooooooow and allow the note holder to do a Trustee sale to get things going??? I know, the "robo signing" complaint. That doesn't matter to me, as the people still didn't make their payments, so their ass should hit the curb after 4-6 missed payments.

**MontuckyFried** · 05-08-2014, 08:52 AM

Originally Posted by Hugh Conway

why use incompetence when fraud's a better fit? Which bank?

First Horizon. A rep there told me yesterday that it is probably in limbo as it makes its way through bureaucratic purgatory on its way to becoming a FNMA property, and when that happens it will finally be on track to go up for sale. Sheesh. It's already been 5 years. Will probably take a couple more at least according to the bank (who is still not claiming it btw). By then the house is going to be toast from almost a decade of being beat up by Montana mountain winters, and the bank's not going to make anything on it. How stupid/incompetent are they? Or do they have some master strategy that I'm unaware of?

**Benny Profane** · 05-08-2014, 09:24 AM

Originally Posted by AustinFromSA

First Horizon. A rep there told me yesterday that it is probably in limbo as it makes its way through bureaucratic purgatory on its way to becoming a FNMA property, and when that happens it will finally be on track to go up for sale. Sheesh. It's already been 5 years. Will probably take a couple more at least according to the bank (who is still not claiming it btw). By then the house is going to be toast from almost a decade of being beat up by Montana mountain winters, and the bank's not going to make anything on it. How stupid/incompetent are they? Or do they have some master strategy that I'm unaware of?

The master strategy is to avoid the obvious solution until they really have to. Meanwhile, they all get their nice salaries and bonuses. It's been going on everywhere across America for years now, federally insured. Half of all foreclosures are occupied. Some people have been living rent free for three to four years now. If the banks and Fed and Treasury hadn't turned their heads away from this thing (all the while telling us everything is hunky dory) then our banking system and the world's would be nuked. We'd probably be in the mother of all depressions. We just experienced one of the, if not the greatest asset bubble and crash in the history of capitalism, and somehow everyone thinks the party will just continue with a little intermission.

If China crashes this year, the world is fucked again. Fake money only goes so far.

**cramer** · 05-09-2014, 12:25 AM

Originally Posted by AustinFromSA

True that. There's a foreclosure I've had my eye on for over a year now. Been abandoned for about 5 years now, so it's obviously in a state of serious disrepair. Being that title is one of my areas of expertise, I tracked down the owner of record, being a bank, who is also still paying the taxes on it. Oddest thing. They've had it for years, and it supposedly STILL isn't showing up in their inventory. They're paying the taxes and for some landscaping service on it, yet aren't claiming it. Jumped through a bunch of bureaucratic hoops to no avail. By the time they get around to listing it, it's going to be absolutely worthless and will probably just need to be bulldozed. Still worth it for the lot alone if I can get the right price on it. Wish they'd hurry up so SOMEBODY can possibly salvage the home, though. Followed up on it today and hoping to hear back from the bank about it, but certainly not betting on it.

Blows my mind that the banks don't even know what they have. I'm starting to think that adverse possession might be the way to go about this one. Time to put out a Craigslist ad to get some "tenants" (re: squatters) in there! Hehehe. If nothing else, it might finally get the bank's attention so they'll fess up to owning it so they can sell it to me, or ANYBODY for that matter. The whole thing's ridiculous.

Look at it from a banks perspective. Do we deal with our inventory first in CA or MT? Seems like a no brainer to me. Lets fix shit where there is money to be spent. Which they have done. We'll deal with the peon states when we have time. Its all about the bottom line and to think that they are going to concentrate on smaller population areas rather than the big population areas is retarded. Sucks if you live in the smaller states, doesnt suck if you live in one of the bigger ones. Pretty cut and dry.

**flyman683** · 05-09-2014, 02:17 AM

Originally Posted by cramer

Look at it from a banks perspective. Do we deal with our inventory first in CA or MT? Seems like a no brainer to me. Lets fix shit where there is money to be spent. Which they have done. We'll deal with the peon states when we have time. Its all about the bottom line and to think that they are going to concentrate on smaller population areas rather than the big population areas is retarded. Sucks if you live in the smaller states, doesnt suck if you live in one of the bigger ones. Pretty cut and dry.

That may be true to some extent, but from experience, property (including some I own) in $500/sq ft "gold coast" NJ is still sitting after 5 years... Efforts for short sales, DILs, and even petitioning to speed up foreclosure procedures notwithstanding.

Even just with the taxes banks have been covering it doesn't make sense for them to keep holding... outside of a combination of being so large they don't know what they own, incentives being disconnected between servicers vs actual note holders, and fear of taking the loss now that is.

So it ain't just Montana.

**schuss** · 05-09-2014, 05:17 AM

Originally Posted by cramer

Look at it from a banks perspective. Do we deal with our inventory first in CA or MT? Seems like a no brainer to me. Lets fix shit where there is money to be spent. Which they have done. We'll deal with the peon states when we have time. Its all about the bottom line and to think that they are going to concentrate on smaller population areas rather than the big population areas is retarded. Sucks if you live in the smaller states, doesnt suck if you live in one of the bigger ones. Pretty cut and dry.

Eh, if they had any level of their shit together, they'd take offers on things just to get it off their books. You also want to be pushing every channel you can. CA courts backed up? Do another state. This is just laziness.

**MontuckyFried** · 05-10-2014, 12:25 PM

Originally Posted by schuss

Eh, if they had any level of their shit together, they'd take offers on things just to get it off their books.

No matter how much or how little Montana is on these companies' radars, that's what surprises me. Last summer, I was prepared to make an offer. When I FINALLY got a hold of a rep back then who maintained they didn't own it (so, the bank's paying property taxes just for fun?), I told them that they (the bank) were already in trouble for not paying HOA dues in a timely manner, that the house was falling apart, yadda yadda yadda, and that I wanted to help them out. The response? The lady said, and I quote, "We're big boys and girls here at First Horizon. We don't need your help," and then hung up on me. Woh. Wasn't expecting THAT response. I guess the banks aren't trying THAT hard to work on getting rid of their supposed burdens. Really odd, this whole foreclosed inventory business. The banks obviously don't care about the issue THAT much or they'd be a bit more motivated to sell, let alone simply admit what they even own! I think Benny's theory is correct.

**Kevo** · 05-10-2014, 01:49 PM

There is a ton of new construction condos being put in my little corner of Boulder. I think they will all be rentals.

The last major condo projects couldn't be sold, so they were all turned into rentals. Hopefully it brings prices down on rentals, but not sure that a couple hundred units will make a dent in a town of 60,000 renters.

This is also a fun time of year to watch the cycle of graduate school graduations on Facebook. Newly minted lawyers being really stoked in grad day photos, then one by one over the next few months falling into depression over lack of job opportunities.

The economy sure as hell is not what it used to be back in 2006 and 2007. No one with 150k in student loan debt making 35k is buying a house anytime soon. For so many younger people, the recovery just never happened.

**Benny Profane** · 05-12-2014, 07:01 AM

More on that trailer park thing. Some good money to be made off the poor.

http://www.washingtonpost.com/busine...d71-f0feafdd13

**hitek79** · 05-17-2014, 11:40 PM

I'm curious how these houses in Cali are getting financed when they're getting bid up that quickly. Are there never appraisal issues? I closed on my house last week, and luckily I had a cash buyer. I really don't know if my house would have appraised for what my realtor suggested I list it for if they were getting conventional financing.

**4matic** · 05-17-2014, 11:58 PM

Originally Posted by hitek79

I'm curious how these houses in Cali are getting financed when they're getting bid up that quickly. Are there never appraisal issues? I closed on my house last week, and luckily I had a cash buyer. I really don't know if my house would have appraised for what my realtor suggested I list it for if they were getting conventional financing.

The house I sold last summer appraised for less than bid. I suppose banks would finance anything with enough money down. Low appraisal cost me $17k.

**liv2ski** · 05-18-2014, 12:33 AM

Originally Posted by hitek79

I'm curious how these houses in Cali are getting financed when they're getting bid up that quickly. Are there never appraisal issues? I closed on my house last week, and luckily I had a cash buyer. I really don't know if my house would have appraised for what my realtor suggested I list it for if they were getting conventional financing.

The buyers have to bring in the difference between the sales price and the low appraisal or the seller is going to have to lower their price. Same as it ever has been.

**cramer** · 06-04-2014, 12:14 AM

Originally Posted by hitek79

I'm curious how these houses in Cali are getting financed when they're getting bid up that quickly. Are there never appraisal issues? I closed on my house last week, and luckily I had a cash buyer. I really don't know if my house would have appraised for what my realtor suggested I list it for if they were getting conventional financing.

My brother in law ran into just that. It came in under. They had to renegotiate, and now he's going to have PMI for not coming in at 20% on the house he's buying due to having to lower the sales price by 10K. (he's got shit he needs to do to the house, blinds, washer dryer, etc, thus no bueno on 20%) Buyer also had to come in with 10K cash. They meet in the middle of the 20K under value appraisal. Buyer wanted he house, he wants his new house and he's got money, so he's like fuck it, lets just do it. He just didnt want to start that process over again. Which I agreed. He'll end up not finding a house. Its tough down here right now...With values going through the roof, nobody wants to sell because they are trying to sell at "peak" and everyone wants to buy before they get priced out. My other brother in law, who i had posted back in the beginning of this thread who short sold his shit back in 2007 or 2008. Back in the market and making a pretty penny. Probably north of 200K a year as a family. He's been out bidded like 6 times. He's overbidding and losing. With him, its Karma though. Thats what he gets for taking on a loan he couldnt afford back in the day and bouncing. Even making that money, he's about to get prices out of the market he's looking in.

**cramer** · 06-04-2014, 12:28 AM

Who on here use to harp on me about zillow? Well, you're all idiots.
Zestimate
$321,666
+$18,435 Last 30 days

How does zillow come up with these #'s you ask. The fucking comps...Anyone whose ever bought a property and looked at their appraisal, its all about the comps.

Well looky here, they are going by comps

http://www.zillow.com/homes/comps/68034668_zpid

You can conveniently sort them by date sold. Almost as good as MLS. Dirty rotten bastards! Shaming me into a hole for using zillow.

I was like, what, 20K in a month, wtf. Ok, these dicks were right. Zillow is worthless. Until i dug a little deeper. I'm not sure if they added that feature recently or not. But there you have it. You can't argue with the facts. Seems like a legit tool to me.

**liv2ski** · 06-04-2014, 07:39 AM

Zillow is only as good as the comps it has to work with. In areas that are predominately track homes with lots of turn over, it works. In an area of custom homes and or little turnover, it could be way off, for better or worse. It is a helpful tool to use when shopping, but for sure do your homework and just don't depend on zillow.

I have been following Lake Tahoe property values for a few years now and with the summer selling season here, I am really curious if all the overpriced crap on the market can sell or will we finally start to see a down turn in prices.

**Shredhead** · 06-04-2014, 08:06 AM

Originally Posted by hitek79

I'm curious how these houses in Cali are getting financed when they're getting bid up that quickly.

Most buyer are paying cash.

Liv2ski nailed it with Zillow. It's just a guideline. If your property is unique, I wouldn't trust it's value.

**Danno** · 06-04-2014, 01:19 PM

zillow has no way of knowing whether you have granite counters and a remodeled interior or whether you have original 1965 interiors. It's a tool, and it provides good easily accessible info to the masses. But I would not use it as my measure of a house's worth, because it's looking at comps, and I can do that too. And I can look at the interior.

**cramer** · 06-04-2014, 11:48 PM

Originally Posted by liv2ski

Zillow is only as good as the comps it has to work with. In areas that are predominately track homes with lots of turn over, it works. In an area of custom homes and or little turnover, it could be way off, for better or worse. It is a helpful tool to use when shopping, but for sure do your homework and just don't depend on zillow.

I have been following Lake Tahoe property values for a few years now and with the summer selling season here, I am really curious if all the overpriced crap on the market can sell or will we finally start to see a down turn in prices.

Oh i fully understand that. My point is i was pointed at with fingers and laughed at, shamed, pretty much ridiculed for looking at zillow as a tool. You make a great point as did danno and shred. All those comps that sold, none had new floors, granite, etc like i do. I'm in the track home, so its a good tool for me to get some kind of ball park on how the housing market is doing in my area. I was looking at it to see what my house is worth and for that, i think its a good tool to know that hey, your housing value is rising or falling. Tahoe, shit, its a worthless tool. I'd imagine every home up there is custom. I know a lot of the ones we've rented over the years were. I couldn't fathom how you appraise one of those places.

**Spats** · 06-17-2014, 08:45 PM

Originally Posted by liv2ski

I have been following Lake Tahoe property values for a few years now and with the summer selling season here, I am really curious if all the overpriced crap on the market can sell or will we finally start to see a down turn in prices.

The low end (under $250-300K) seems to be moving, high end just sits there as usual.

**liv2ski** · 06-17-2014, 09:17 PM

Odd thing is Spats, 2 years ago there were lots of homes on the market I would have bought if the wife had been on board. Now not so much. Like I said, it will be interesting to see if the $500k-$700k crap can sell without some big mark downs. From following overall sales, business looks good in Tahoe. I guess the Bay area buyers feel good about life again.

Hugh Conway · 06-17-2014, 09:40 PM

from across the pond, it's 2 of my favorite things combining. Crowd sourced housing investment! Become a landlord starting at $850. We buy the home, renovate, and rent. You handover the cash. What could go wrong!
http://www.crowd2let.com/

**liv2ski** · 06-18-2014, 05:39 PM

Shit Hugh, what could be easier??? Find the math fuck up.

"To keep the math’s simple we will say in this example that 110 people eventually crowdfund the investment with £1,000 each, ie the £110,000 full package price. An SPV is created for the 110 landlords as described in How It Works.

The property is refurbished then let at £625 per calendar month and each of the 100 investors receives £5.50 per calendar month in rent or £66 per annum after deducting our 10% plus VAT management fee. The return is of course proportional to the initial investment, ie if an investor had invested £5,000 in this property they would receive £27.50 per month in rent.

This is a 6% annual yield on each £1,000 net cash investment".