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  1. #201
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    What he said.

  2. #202
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    lingcod, the difference between MD9 and the guys you've seen on TV is the guys on TV are trying to sell you something. MD9 isn't peddling a "Make Money in Real Estate" DVD. And it's not like he's telling people to go out and get a shitload of interest-only loans. He's just giving some advice.

  3. #203
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    I'm pretty sure MD9 isn't really telling us anything you can't get from watching 'Flip This/That House' on the DiscoveryHGTVTLCChannel on cable. Seems to me that he's just saying that there's good things to be had with a reasonable amount of sack, luck and good research. That doesn't seem too different from nearly any investment strategy.

    I think it's awesome MD9. If you've found your calling, run with it.

  4. #204
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    My cousin is 50 now, he started buying, reovating and renting properties in the Boston area when he got out of college. At one point he owned 36 properties. The market was good, he got sick of being a lnadlord, he sold them all, he hasn't had a job in 10 years now and he's rich. He watches his investments and pulls together little property development deals in his spare time, but mostly he coaches his kids' sports teams, sails his big ol' sailboat and skis.

  5. #205
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    That's great and all, and I'm sure there are many people out there like that. OTOH, I would bet that there's 2-3x as many people out there like this poor sap:

    Bad Times for Leo in SW FLA

  6. #206
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    LIngcod, hey nobody is putting a gun to anyone's head. We all come from different walks of life, MD9 is obviously a nice enough guy to share what he does for a living with us. Real estate is about numbers, him not bullshitting us, like the rest of the world, is of value. Obviously the guy does the grunt work, soemthing most of us would not do, and thus would not prevail as easily as he does. Additionally, using a 15yr is not only an alternative to just playing the appreciation game, but also stiffens up the equity requirements.

    Likewise, for the avergae schmuck like me, your words of caution are noted in this enviorment.

  7. #207
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    Quote Originally Posted by Tin Woodsman View Post
    That's great and all, and I'm sure there are many people out there like that. OTOH, I would bet that there's 2-3x as many people out there like this poor sap:

    Bad Times for Leo in SW FLA
    Uh... because that guy made the mistake of getting himself in over his head doesn't really indicate anything other than his own stupidity. All investing is a scary game. Markets are not friendly places.

    If someone were to lose their money playing something like blackjack in vegas where there roughly equal odds over time, people don't feel sorry for them. I don't understand the 'woe is the borrower' sentiment.

    Buyer beware. The value of good research is unquantifiable.

  8. #208
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    Quote Originally Posted by Tin Woodsman View Post
    That's great and all, and I'm sure there are many people out there like that. OTOH, I would bet that there's 2-3x as many people out there like this poor sap:

    Bad Times for Leo in SW FLA



    I'm a particpant in the SW FLA RE market and know this area fairly well.

    The guy in that story is typical, and the lesson is applicable of any investment, which is, "know the market".

    What MD9 is doing is completely different. He's buying undervalued properties and through his own sweat, bringing them to market value.

    People like the guy in the story are very common down here. They don't have the skills to do "fixer uppers" and instead invest in new construction. and hope market appreciation bails them out. This worked well for about three years, but not anymore.

    If you look at the numbers, MD9 has a positive cash flow off his properties. He's not depending on appreciation at resale for his profits. Sure the R.O.I. may not be great measured against the acquisition cost. However he did the bulk of the work himself to bring them to market value. This means no increase to the acquisition basis.

    Unless I'm wrong, I believe his intent was to share something that has worked well for him. How many people do you know that hate their jobs or feel under challenged, under appreciated, or just feel that they were meant for more in life?

    If you have a good income and do what you want with your most valuable resource ( your time) Isn't that the real american dream?

  9. #209
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    Nicely said.

  10. #210
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    Quote Originally Posted by lingcod View Post
    MD9: The little dwarf pictures got me thinking: years and years ago, my dad, who did very well in the oilfield in the busts and the booms, and with nothing but his own uneducated, backwoods self confidence, always said, "if it's such a great idea, why are you telling me about it?"
    That's cool. Feel free to interpret my sharing of information however you will. I'm glad you think I'm headed for a fall (maybe due to skiing or drinking, but not due to work). In a few years we'll be able to look back at this thread and what's happened in the meantime. I don't "have it ALL figured out", but I do have this little niche figured out. When someone asked about commercial I think you'll see that I said "I don't know much about it". And I've always encouraged everyone to "do their homework".

    If this were an idea that needed patenting I'd obviously keep my mouth shut, but there's no shortage of homes in rough shape that need help. Hell, even if this were the ad biz (where I've earned the money to invest in Real Estate) there's no way I'd tell you who my client contacts were and what I'm charging and how I'm making money there. There are some businesses where that just doesn't work and you could risk future earnings.

    There are a lot of shitty landlords that let places go to waste, lazy home owners, elderly who can't handle the upkeep. Two houses I've bought were an inheritance to a family member and they wanted cash rather than a beat-up old house. Another two were from shitty landlords who slum lorded. They didn't put any money into the houses and didn't maintain the properties. They just worked the cashflow as hard as they could until they fell apart. These places need to be put back together and there's no shortage of them.

    My dad retired in his 40's and now mountain bikes most days in the summers and skis most days in the winters. While he was working towards an early retirement he told all of his friends about what he was doing, gave them books, etc... None of them took his advice. They all still work and none of them really hang out that much anymore. I'm sure he'd much rather have them up on the hill with him. Most of what I learned I learned from him and he's been willing to share info with anyone who's ever asked. I know of numerous maggots who've asked for his advice on financial matters.

  11. #211
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    http://www.nytimes.com/2006/10/03/ny...0ee&ei=5087%0A

    "While many of the highest home values were on the coasts, in places like Southern California and Manhattan, many of the biggest jumps in the percentage of people paying a burdensome amount of their income for housing occurred in the Midwest and in suburbs nationwide, making it clear that the housing squeeze has reached deep into the middle class."

    The world is perfect. Appreciate the details.

  12. #212
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    MD9 -

    I'm psyched that you've found a niche that works for you. Obviously, ,you do a lot of research supplemented with your own sweat - always a good formula for success in any business. That said, much of this discussion has focussed on the state of the housing market as a whole. I think it's fair to say that your particular niche in the location of the SLC metro isn't exactly typical. Sounds like your approach will be successful in even flat markets as you are creating the appreciation by yourself instead of relying on the market lift. I hope for your sake that you don't pull the trigger at the wrong time b/c it's likely you've never seen a real deep housing slump when nothing is selling. Sounds like you've got some cushion stemming from your success to date though, which is good. You know your gig better than I ever could, but just be careful - this market can turn on a dime b/c, though the real estate industry would like you to believe otherwise, consumer sentiment/psychology plays a HUGE role and can easily overhwlem the alleged "fundamentals".

    Your case is not typical, and a LOT of people are going to get hurt, some b/c they're stupid and greedy, and others b/c they just had bad timing.

  13. #213
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    Just got off the phone with a buddy who got a 4bdr house in 07043, multiple bids, payed over, has been watching the market for about 6 months here, kept losing out.

    So is he sucker?

  14. #214
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    94580 Bay Area California anecdotal:

    two houses directly across the street from me for sale. Both dumps. One is owned by a flipper. The other needs $50k work to be liveable and is currently occupied by retards.

    No one has even looked at these houses in almost two months. The flippers price has dropped $30k so far.

    Good houses continue to sell in the area.

  15. #215
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    Bernanke today:

    "The housing correction will take 1 point out of GDP".

    That's HUGE! The fed got what they wanted so this is good news. The bad thing, he said CORRECTION. That means lower prices ahead.

    Stocks and bonds are going to rally.

    Bernanke said it was "difficult to tell" how long the slump in construction would last, because both buyers and sellers have moved to the sidelines with uncertainty over prices. "It is a little difficult how the dynamics are going to play out," he said. "At the same time, I think there are some strong fundamental underpinnings that should help the housing market over the medium term, he said. These include: a good job market, strong income growth, demographics and continued low mortgage rates, he said. "Ultimately, the housing market is going to be supported by those factors," he said.
    Bernanke said there was limited evidence that weakness in the housing market was hurting other sectors.
    Last edited by 4matic; 10-04-2006 at 08:45 PM.

  16. #216
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    “I’m a subhuman jizz monkey”

    Thx mods. It’s an awesome signature.

  17. #217
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  18. #218
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    Quote Originally Posted by 4matic View Post
    I thought you'd be talking about this one:
    http://www.latimes.com/news/local/la...home-headlines
    Elvis has left the building

  19. #219
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    Quote Originally Posted by 4matic View Post
    Classic:

    But he also exemplifies the way in which real estate has become a spin factory of hedging and hype. Serin bought eight houses in eight months in four states with no money down. [with mediocre credit and no job]How, pray tell, did he do this? By his own admission, he applied for and got no-money-down, stated-income loans by inflating his income, sometimes getting primary residence loan rates by claiming he would live in the houses himself. The offers, he said, often had "cash back" clauses, in which he would get money back from the seller after closing, which the bank didn't know about. (This means that a bank, thinking that the sale price was higher, was actually financing not 100 percent of the loan but, say, 110 percent.)
    “I’m a subhuman jizz monkey”

    Thx mods. It’s an awesome signature.

  20. #220
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    Quote Originally Posted by 4matic View Post
    Holy crap. That's insane. It's amazing that kid pulled that many houses together on no real income in that amount of time. If he knew what he was doing he might have made a killing rather than be buried in debt and maybe on his way to jail.

  21. #221
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    This is a cool thread. My dad invested in real estate for along time and recently cashed it all in and retired. He allways tried to get me interested in it but I was too distracted by other things. Now though, I am old enough to understand what he was trying to tell me back in my 20's when I was too busy fucking off. I bought a condo 6 years ago and it has almost trippled in value. I just bought my first house and used equity to put down a nice down payment. So I am going to rent the condo and break even and hope for more appreciation and rents to increase,while I live in my new house. In 5 years I will see where both properties are at and hopefully do it again. They are both in a nice area of So Cal and there is no more construction happening. There is no more land to build on so in theory value can only go up. I guess if you play your cards right with real estate eventually you can retire with a nice lump in your back pocket. I hope I can do the same as my dad

  22. #222
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    ...........................
    Quote Originally Posted by LA Daily News
    Foreclosure activity climbing fast
    Level increases 72% in Los Angeles County
    BY GREGORY J. WILCOX, Staff Writer
    Article Last Updated:10/18/2006 08:48:42 PM PDT

    Foreclosure activity surged across the state in the third quarter, soaring 72 percent in Los Angeles County and 105 percent in Southern California as sales plunged and appreciation flattened, an industry tracker said Wednesday.

    Lenders issued 26,705 default notices to homeowners statewide in the July through September period, up an annual 111.8 percent, said La Jolla-based DataQuick Information Systems. Activity increased 28.3 percent from the second quarter.

    Third quarter activity was the highest since lenders sent 30,225 default notices in the 2002 first quarter.

    Default notices are the first step in the foreclosure process and are recorded at the county recorders offices. They are typically sent out when a homeowner falls three months or more behind in their payments.

    DataQuick began tracking this statistic in 1992.

    Activity hit a low during the 2004 third quarter when 12,145 default notices were recorded. They peaked in the 1996 first quarter at 59,897 notices.

    Despite the surge, the third quarter is still below the quarterly average of 32,653 notices, the company said.

    The report noted that:

    Third quarter foreclosure activity in Los Angeles County was the highest since the 2003 fourth quarter when 5,830 default notices were issued. The quarterly average is 11,003 notices.

    Ventura County's activity hit the highest level since 695 default notices were issued in the first quarter of 2002. The county average is 682 notices.

    The activity level across the six county region was the highest since 16,229 notices in the first quarter of 2003. The Southern California average is 23,074 notices.

    During the third quarter the number of foreclosures soared 362.1 percent to 3,424 properties statewide. They increased 76.9 percent from the second quarter.

    Foreclosure activity rises when homeowners owe more on their property than it is worth, according to prevailing values.

    If they encounter financial trouble and can't sell the property for more than its worth a foreclosure can result.

    Most homeowners reverse the foreclosure process.

    But about 19 percent of homeowners who found themselves in default earlier in the year actually lost their homes to foreclosure in the third quarter. A year ago only 6 percent did, DataQuick said.

    "When prices are flat, or going down, fewer homeowners in financial distress are able to use their homes to bail themselves out of trouble," Marshall Prentice, DataQuick's president, said in a statement.

    Statewide, the annual price increase hit a high of 22.8 percent during the second quarter of 2004. Since then it's fallen to 3.7 percent during the third quarter.

    Defaults were least likely in Marin, Napa and San Francisco counties and the highest in Fresno, Merced and Riverside counties, DataQuick said.

    While the percentage increases were large across the state in the third quarter they are coming up from very low levels, said DataQuick analyst Andrew LaPage.

    "We're still climbing back to something close to normal activity and if we get back there and it continues to rise at a rapid pace then we will start to look at other things," he said.

    That would include job losses.

    But so far both the state and regional economies remain sound.

    "Other industries are performing well, ironically, including nonresidential real estate," said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. "And employment is still growing."
    I've concluded that DJSapp was never DJSapp, and Not DJSapp is also not DJSapp, so that means he's telling the truth now and he was lying before.

  23. #223
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    So where's all the money going?

    Dow, baby. No maintenance costs or tenants in my 401k. 'Bout time for a little bull action.

    The world is perfect. Appreciate the details.

  24. #224
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    http://www.nytimes.com/2006/10/20/re...e/20ski.1.html

    "In her multiyear search for a mountain retreat, Anne Bodine-Cresci saw prices in Stowe, Vt., rise higher than the mountaintops. Her quest was framed by an increasing number of million-dollar-plus homes, pricey fixer-uppers and a limited supply of new listings. “Some places,” Ms. Cresci said, “were going for a lot more than they probably should have.”"

    The world is perfect. Appreciate the details.

  25. #225
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    It's interesting to see people's opinions based on where they live. Case in point, what I'm seeing in Park City is vastly different than what md9 is seeing in the valley. Of course, we've tended to trend closer to the coasts as most of the people buying here are coming from there and doing 1031's.

    Very interesting thread though.

    btw, md9 has his shit together and I wouldn't worry about him getting too far over extended or over confidant in his dealings based on the conversations I've had with him.

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