Real Estate Crash thread

**grrrr** · 10-09-2013, 03:53 PM

Originally Posted by liv2ski

Can you take a shorter term loan (like 10-15 years) and have it paid off prior to retirement? If no, consider paying as much as possible each month to pay down the debt as fast as possible while working. Then 6 months before retiring, refi the now lower loan balance over a longer term (15, 20 or 30 years) to have the payment as low as needed to have a comfortable retirement.

I've got something like that in mind. Plan to have it paid off in 9 years, then retire.

**mcsquared** · 10-09-2013, 03:54 PM

In most matters financial, hubris is eventually punished. This goes for both the muds and Bennys of the world.

**mud** · 10-09-2013, 04:27 PM

Originally Posted by 4matic

ATT currently yields 5.3% and there are REITS that yield more if real estate is your thing. Without capital appreciation and in a rising rate environment rental property returns are not that great and also illiquid. That's why residential real estate rental business has always been a mom and pop affair and why cash investment in real estate rental market is drying up.

Landlording is not pimp daddy business and historically provides low returns.

All depends on the market.

I grew up in a blue collar family and learned how to build and repair houses at an early age. The first property I bought was on an undeveloped beach that eventually was discovered by the masses. A $5K investment bought a $50K place that cash flowed and paid for my college. Now that place is paid for and is worth $850K and rents as a VSBO (edit VRBO) for $3,800 a week.

Eventually I moved out to CO in '92 to climb and ski and housing was still affordable. It was easy to pick up a job as a lead carpenter and make $35 to $45 an hour. I lived in my van down by the river and squirreled away enough cash to buy a place that I would fix up then rent out while living out of my van and climbing in Hueco, Joshua Tree, Yosemite and skiing in CO, NV, and Jackson. I did that for ten years, buying dumps then fixing them up to rent.

I'm not looking to sell anything, I buy and hold because historically housing always appreciates long-term, more than the Dow or the S&P 500. If you look at what the market is paying for rentals and it covers the mortgage plus a $100 or $200 bucks it may be worth buying and holding long term.

This isn't rocket science. Buy and hold.
Observe where people want to live and buy there.

**reganized** · 10-09-2013, 05:05 PM

Yeah 45% of gross pay is whacked!!!

Sent from my XT1080 using TGR Forums

**Benny Profane** · 10-09-2013, 07:33 PM

Originally Posted by mud

All depends on the market.

I grew up in a blue collar family and learned how to build and repair houses at an early age. The first property I bought was on an undeveloped beach that eventually was discovered by the masses. A $5K investment bought a $50K place that cash flowed and paid for my college. Now that place is paid for and is worth $850K and rents as a VSBO (edit VRBO) for $3,800 a week.

Eventually I moved out to CO in '92 to climb and ski and housing was still affordable. It was easy to pick up a job as a lead carpenter and make $35 to $45 an hour. I lived in my van down by the river and squirreled away enough cash to buy a place that I would fix up then rent out while living out of my van and climbing in Hueco, Joshua Tree, Yosemite and skiing in CO, NV, and Jackson. I did that for ten years, buying dumps then fixing them up to rent.

I'm not looking to sell anything, I buy and hold because historically housing always appreciates long-term, more than the Dow or the S&P 500. If you look at what the market is paying for rentals and it covers the mortgage plus a $100 or $200 bucks it may be worth buying and holding long term.

This isn't rocket science. Buy and hold.
Observe where people want to live and buy there.

Ah, so that's your problem. It's pretty simple. You know that 35-45 dollar an hour job you did? A Mexican has it now, much like the 35-45 dollar an hour some autoworker had that some Korean has, and the nearly six figure IT job an Indian is now doing over the internet. Now, how in the world will houses become more valuable after that? Maybe in some village in Mexico or an industrial city in Korea or China or a suburb of Mumbai, but not here. Makes no sense. Like 850000 houses on some beach that can't even get covered with insurance anymore.

Hugh Conway · 10-09-2013, 08:05 PM

Originally Posted by mud

Observe where people want to live and buy there.

"ride the wave". California is filled with similar people who thought they were the shit prior to 2006. Ain't nothing going to change here - you are convinced you know where people want to live (apparently, because 20 years ago you wanted to live there) - me, I know I don't know shit other than the Front Range is a dump. The continued desire of people on TGR to leave the Front Range suggests I'm not alone in thinking it's a dump but maybe there is some inexhaustible supply of uncreative east coast trustafarians who can't get their shit together enough to live somewhere else.

now you'll swing your dick and insert some gif, because you are you. Suhweet. As the bullshit thread turns.

**frorider** · 10-09-2013, 08:21 PM

http://m.us.wsj.com/articles/a/SB100...?mg=reno64-wsj

**Zedsdead** · 10-09-2013, 08:21 PM

brand new $700K mcmansions going up on my way to work. big houses built cheap, tiny lots, within spitting distance of each other with no yards, right off a busy, noisy 5 lane retail strip. Who the hell buys these things? For that kind of dough you could have a really nice house on acreage just a few miles out.

**Benny Profane** · 10-09-2013, 08:27 PM

If they're brand new, the builder is offering excellent financing and incentives. Builders are cash rich.

And, some people like to live that way. Neighborhoods and kids playing and all that. Hell, I live in a place that is zoned probably minimum 2-3 acres in many places, and I rarely if ever see people outside on my many road rides. They're all inside watching TV and surfing the web in climate controlled comfort. What do they need a yard for? Their kitchens are the size of a lot of apartments. They sit there and eat while they watch TV and surf the internet.

**cramer** · 10-09-2013, 09:15 PM

Originally Posted by Hugh Conway

"ride the wave". California is filled with similar people who thought they were the shit prior to 2006. Ain't nothing going to change here - you are convinced you know where people want to live (apparently, because 20 years ago you wanted to live there) - me, I know I don't know shit other than the Front Range is a dump. The continued desire of people on TGR to leave the Front Range suggests I'm not alone in thinking it's a dump but maybe there is some inexhaustible supply of uncreative east coast trustafarians who can't get their shit together enough to live somewhere else.

now you'll swing your dick and insert some gif, because you are you. Suhweet. As the bullshit thread turns.

What do you have against CA? You're quickly overtaking Benny as the bitter dick of the month.

**cramer** · 10-09-2013, 09:26 PM

Originally Posted by Benny Profane

Ah, so that's your problem. It's pretty simple. You know that 35-45 dollar an hour job you did? A Mexican has it now, much like the 35-45 dollar an hour some autoworker had that some Korean has, and the nearly six figure IT job an Indian is now doing over the internet. Now, how in the world will houses become more valuable after that? Maybe in some village in Mexico or an industrial city in Korea or China or a suburb of Mumbai, but not here. Makes no sense. Like 850000 houses on some beach that can't even get covered with insurance anymore.

That six figure IT job isn't overseas anymore. Most big companies brought anything important back in house over the last few years. See Tesla for the auto workers. They be getting paid. Mexican's get paid just as much as any one else you racist ass. My last IT boss was mexican you dick, hehe. Hell even apple is opening up a manufacturing plant in the US now. I call bullshit on that point.

**Benny Profane** · 10-10-2013, 06:12 AM

Originally Posted by cramer

That six figure IT job isn't overseas anymore. Most big companies brought anything important back in house over the last few years. See Tesla for the auto workers. They be getting paid. Mexican's get paid just as much as any one else you racist ass. My last IT boss was mexican you dick, hehe. Hell even apple is opening up a manufacturing plant in the US now. I call bullshit on that point.

Sometimes I have some hope that I will wake up and find most people around me better informed about the world around them. Just a little. But, after I read this or turn on the news, those hopes are dashed.

**liv2ski** · 10-10-2013, 07:59 AM

Originally Posted by frorider

http://m.us.wsj.com/articles/a/SB100...?mg=reno64-wsj

Link didn't work for me?

**Benny Profane** · 10-10-2013, 09:17 AM

Originally Posted by frorider

http://m.us.wsj.com/articles/a/SB100...?mg=reno64-wsj

Pay site. Do the Google paste thing, liv.

Hard to believe that Deutsche is participating after how they got burned with the bubble MBS before the crash, but I guess a Muppet is a Muppet is a Muppet.

**shirk** · 10-10-2013, 10:55 AM

Originally Posted by cramer

See Tesla for the auto workers. They be getting paid.

I don't know about Tesla, but I do know that Honda's Canadian auto plants are doing a major restructure on wages. They've dropped the wage for new hires and now it's going to take 10 years to get up to what is called "full line rate" ie the top wage for a production line worker previously I think it was two years. That top line rate is also going to be lower than what the pre-restructured employees are making. Basically it's a two tier system till all the old workers retire.

They have also for the first time contracted out all line side parts delivery to a supplier. A whole department is basically gone. Lower wage workers now doing what was top auto worker pay.

This will have ripple effect down to the Tier 1 and Tier 2 suppliers as they adjust wages.

Now having worked in the auto industry for a number of years I'll be the first to say that they were almost all overpaid for their jobs, doesn't change the fact that wages are being driven down.

**cramer** · 10-11-2013, 12:42 AM

Sometimes I have some hope that I will wake up and find most people around me better informed about the world around them. Just a little. But, after I read this or turn on the news, those hopes are dashed.

Oh if we could all have it figured out like you dude. I don't watch the news anymore, do you? For one, i get home at like 6:30. Cook dinner for the wife and kid. Harrass my 7 year old girl to go take a shower etc.

I'm curious on how i live in one of the more populated areas in the US, have held a job for 14 years at 1 company that has laid off and hired probablly 200K+ people that i'm not informed on the world around them? Do elaborate. I'll let you know the worldwide company i worked for before that.

**H0G** · 10-11-2013, 10:48 AM

Originally Posted by Benny Profane

Sometimes I have some hope that I will wake up and find most people around me better informed about the world around them. Just a little. But, after I read this or turn on the news, those hopes are dashed.

You give the US population too much credit. Our intelligence is not on a bell curve. It is skewed to the left with outliers on the right bringing it up.

Ignorance must be bliss...

**Zedsdead** · 10-11-2013, 04:36 PM

Originally Posted by cramer

I'm curious on how i live in one of the more populated areas in the US, have held a job for 14 years at 1 company that has laid off and hired probablly 200K+ people that i'm not informed on the world around them? Do elaborate. I'll let you know the worldwide company i worked for before that.

That reads like English but makes no sense.

**cramer** · 10-12-2013, 12:51 AM

Originally Posted by Zedsdead

That reads like English but makes no sense.

lol! I think i was trying to say thanks for your insight Benny, but... thumbs up on your addition to the thread. I'm not sure what point i was trying to make either.

Either way, carry on..

**frorider** · 10-12-2013, 08:03 AM

We could emulate China's approach to pumping up the demand side on real estate.

**Benny Profane** · 10-12-2013, 06:34 PM

Originally Posted by frorider

We could emulate China's approach to pumping up the demand side on real estate.

Such a bizarre, strange place. I find the place fascinating. It entered my bucket list of places to visit a long time ago, but, I doubt it. It's like the whole fucking country is some boomtown silver mining frenzy from our history on some vast, immense scale that only history will figure out. All of those US treasury bonds, or, I guess, the full faith and credit of some sort of market of Us, America, has turned into a crazy casino over on the other side of the world. You know, drill a hole deep enough............

**Benny Profane** · 10-14-2013, 04:57 PM

Holy crapola. I just saw this on my TV:

http://nbr.com/2013/10/14/government...d-dream-house/

Motherfucker. This is what I mean when I am just disgusted as I go through life with morons around me who are so unaware of the world and how they fit in it. This fat fuck doesn't quite get that a no money down no insurance loan (they don't mention the rate, but, I'll bet it's real fucking low, considering) is a gift from Keynesian heaven, a remnant of a ghost of a political gift that somebody who sucked up to FDR thought up to get the Okie vote way back when. And he's fucking outraged that him and his multiplying fat fuck brood won't be sleeping in their own beds for maybe a month or so. No permanent address for the pizza guy to remember. No room for the large screen. No kitchen full of crappy food, always stocked. Good lord. And you and I pay for this shit.